Multi-million lease rental tiff: BCDA, John Hay lessee arbitration by year end

BAGUIO CITY -- The  state-owned  Bases Conversion and Development Authority (BCDA) said it is  ready  to  start  arbitration  proceedings  with  Camp  John  Hay Development  Corp.,  the  John  Hay  developer  that  has accumulated over P3-billion in rental arrears to the government.

According  to BCDA  president  and chief executive officer Arnel Casanova, BCDA has submitted the issues of termination of the lease agreement and the collection  of CJHDevCo’s debt in lease payments for arbitration before the Philippine Dispute Resolution Center Inc. (PDRCI). 

This is pursuant to the court’s order for BCDA to arbitrate.

“BCDA adheres to the rule of law. Since the court orders us to  go  into arbitration, we will abide by that. We welcome the arbitration proceedings  as  it  will  allow  us to recover what is properly due to the government,”  Casanova said.

The  BCDA  expects  proceedings to take place within the year.

This  does  not mean that BCDA will cease to seek redress from and avail of proper remedies against any unlawful business practice that has taken place in areas over which it exercises authority. 

“BCDA remains steadfast in its commitment  to  promote  a  healthy  business  environment for the Filipino people.  It remains  faithful to its mandate, and it will not hesitate to pursue  criminal  and  administrative  actions  against  any person that is rendering its efforts nugatory.  Criminal and administrative actions, to be sure, cannot be subject of arbitration,” Casanova added.

In  the  past  few  months,  BCDA  filed estafa and malversation complaints against CJHDevCo before the Department of Justice (DOJ). In  its latest estafa complaint, BCDA charged CJHDevCo’s Board of Directors and officials in the years 1998 to 2000, led by its Chairman Robert John L. Sobrepeña,  with  having  misled  BCDA  into  believing  that  CJHDevCo was financially  incapable  of  meeting  its  obligations to the government and therefore  needed  to  defer  its  outstanding rental.

This representation, however,  was  belied  by  the  records.  CJHDevCo declared cash dividends totalling P928 million in the years 1998, 1999, and 2000, the same years it was  claiming  financial  incapability in paying its P1.275 billion rentals
arrears.

“CJHDevCo has committed false pretenses and fraudulent acts, and should be held liable for estafa under Article 315 (2)(a) of the Revised Penal Code,” the BCDA complaint read.

The  BCDA  also  filed  52  counts  of  malversation  against  the Board of Directors and officials of CJHDevCo and its subsidiary, Camp John Hay Hotel Corporation  (CJH  Hotels) for their refusal to return to BCDA its 26 hotel units  located in Camp John Hay Manor and Camp John Hay Suites, and to give BCDA  an  accounting  of the revenues earned by them from the operations of the  26  rooms. CJH DevCo and CJH Hotels are alleged to be in possession of the  26 units since 2008 and, as stated in the Complaint, are continuing to earn  from  these units without giving the government proper liquidation of public  funds- revenues that they have earned from the use and lease of the 26 units.

“On  May  16,  BCDA terminated the lease agreement  dated  Oct.  19,  1996  and  the  restructuring memorandum of agreement dated  July  1,  2008  with CJHDevCo due to the latter’s material and incurable breaches,” a BCDA press statement said.