>> Wednesday, January 30, 2013
BAGUIO CITY -- A local court denied a motion to dissolve the writ of preliminary injunction filed by the State-owned Bases Conversion and Development Authority since the P736.33 million bond posted by the Camp John Hay Development Corporation to prevent a takeover of the 246-hectare John Hay Special Economic Zone (JHSEZ) from its possession since the bond posted by the latter was sufficient.’
The conflict stemmed from a notice of termination issued by BCDA to CJHDevCo unilaterally terminating the 50-year old lease contract over the 246-hectare JHSEZ because of the developer’s failure to settle its accumulated lease rentals amounting to P3 billion tracing back since the signing of the lease agreement in October 1997.
“The court in the approval of the injunction bond filed found that the bond was sufficient in amount, and that the surety corporation succeeded to justify after compliance by the petitioner with the posting of the injunction bond in the amount of P736,328,465.50, the writ of preliminary injunction was issued,” Judge Cecilia Corazon S. Dulay-Archog of the city’s Regional Trial Court Branch 6 stated in her order dated December 21, 2012.
In its motion to dissolve the writ of preliminary injunction issued by the court on August 23, 2012, BCDA argued that Liberty Insurance Corporation is an “insufficient” surety corporation under Section 7, Rule 58 of the Rules of Court which provides that “the party filing a bond in accordance with the provisions of this rule shall forthwith serve a copy of such bond on the other party, who may except to the sufficiency of the bond, or of the surety corporation or sureties thereon. If the applicant’s is found to be insufficient in amount, or of the surety or sureties thereon fail to justify, and a bond sufficient in amount with sufficient sureties approved after justification is not filed for with, the injunction shall be dissolved.”
Since its net assets are allegedly insufficient to cover petitioner’s injunction bond in the amount of P736.33 million, BCDA casted doubt on Liberty Insurance Corporation’s financial position and on its ability to secure the performance of CJHDevCo’s bond considering that per the surety’s audited financial statements for the year ending Dec.31, 2011, its total assets amounted only to P326,242,935 while its total liabilities amounted to P212,424,471.00.
H67owever, CJHDevCo argued that Liberty Insurance Corporation is a duly accredited and authorized bonding company by the Office of the Court Administrator and that the Supreme Court’s accreditation of the said insurance corporation allows it to transact business involving surety bonds for civil cases from August 1, 2012 to January 31, 2013.
In denying the motion to dissolve the injunction bond, Judge Archog pointed out the injunction was purposely required so that it shall answer for damages that BCDA may sustain by reason of the issuance of the writ of preliminary injunction, if later on the court decides that the petitioner was not entitled thereto.
“The court in the exercise of its sound discretion found that the issuance of the writ of preliminary injunction was proper. The propriety of the grant of injunctive writ was based on the orders dated April 27 and June 29, 2012 which directed CJHDevCo’s application for a writ of preliminary injunction is granted in part upon the posting by the corporation and the approval by this court of a bond in the amount of P736,328,465.50 executed to BCDA to the effect that petitioner will pay the amount to BCDA for the damages it may sustain by reason of this injunction of this court should finally decide that CJHDevCo is not entitled to it,” the 3-page order of Archog stated.
For the duration of the case before the court until a decision is reached, Judge Archog explained BCDA, its subsidiaries, officials, employees, agents and other third parties, are restrained from committing any act tending to raise control and/or possession of the leased property.
For its part, CJHDevCo had repeatedly stated that it does not owe BCDA that much in accumulated lease rentals considering that it was not able to pursue its desired development because of the failure of BCDA to deliver the actual number of land area to be fully developed and utilized for the establishment of a world-class tourism center and multi-use watershed.