Congress tackles Camp John Hay rent dispute

BAGUIO CITY –The city government has not lost yet its right to P850 million which the Bases Conversion and Development Authority owes for the operation of Camp John Hay.

This, according to Rep. Nicasio M. Aliping Jr. who brought this matter before Congress to see if there was remedy to the claim of Baguio for the amount in the wake of decision of Philippine Dispute Resolution Center, Inc. in legal battle between the BCDA and Sobrepena-led Camp John Hay Development Corp.

The PDRCI ruled CJHDevCo should vacate its leased area in John Hay and return it to the control of BCDA.

However, the BCDA was also ordered to reimburse CJHDevCo P1.42 billion which represents lease rentals paid by the latter to BCDA.

“If the city will not act immediately, it stands to lose P850 million under this deal,” Aliping said.

Baguio Mayor Mauricio Domogan earlier said, “With the decision of PDRCI, we could no longer collect our share amounting to P850 million. The city of Baguio is the biggest loser in this decision.”

However, Aliping,  on interpellation to ABAKADA Party list Rep. Jonathan dela Cruz’s privilege speech on the matter – asked if it would still be possible for BCDA to satisfy its obligation to the city in light of the PDRCI decision.

“The City of Baguio was robbed of its share in the lease rentals as a result of the decision of the PDRCI,” Aliping told Congress.

Aliping asked if it was still possible to force the BCDA to remit the 25% share of the city by automatically deducting the amount from the P1.42 billion which BCDA is supposed to reimburse CJHDevCo.

Dela Cruz suggested a trust fund be created immediately where the P850 million could be deposited while the BCDA has not released the amount to CJHDevCo.

The proposed trust fund would hold the amount until final resolution on Aliping’s request could be decided upon by a competent court.

“Hopefully this will answer the desire of Baguio City to collect what is due it from the long legal battle which ensued between BCDA and CJHDevCotheis past decade,” Aliping said.

Earlier this month, the PDRCI, chaired by Mario Valderama and composed of co-arbitrators Teodoro Kalaw IV and Rogelio Nicandro., issued a decision ordering CJHDevCo to vacate Camp John Hay and return the property to BCDA.

The order for CJHDevCo to vacate the property was unanimous.

The committee’s decision directing BCDA to pay CJHDevCo P1.4 billion, however, this was not unanimous and the dissenting opinion stated that the latter must pay the government P2.4 billion instead.

In the separate opinion, co-arbitrator Kalaw said the CJHDevCo has acknowledged that it owes the government P2.4 billion.

In 1996, the BCDA entered into a lease agreement with CJHDevCo for a portion of the John Hay Special Economic Zone.

Under the agreement, CJHDevCo was authorized to lease, develop, operate and manage the property for 25 years or until October 2021.

Locators in Camp John Hay covered by the lease agreement have to enter into sublease agreements with CJHDevCo, which in turn collects the payments for the use of the property.

Meanwhile, Caloocan City 2nd District Rep. Edgar R. Erice pushed in Congress a  probe of Sobrepena group and its connection to the “mismanaged” College Assurance Plan and other government contracts it acquired, like the “questionable” Metro Rail Transit 3 (MRT 3) project.

“Maybe we need to look deeper into the Sobrepena group,” Erice said.

This, as the city council committee on laws will confer with Domogan and city legal officer Melchor Carlos Rabanes to firm up the city’s position and course of action in face of the probability of the city’s non-collection of its share from the Camp John Hay lease rental as a result of the arbitral court decision on the case between the BCDA and CJHDevCo.

The aldermen last week adapted Councilor Faustino Olowan’s suggestion tasking laws committee chair Councilor Richard Carino and member Councilors Elmer Datuin and Fred Bagbagen to consult with the city executive to address the dire situation of the city and referred the decision to the city legal office to render an opinion on the courses of action that the city can take.

 In the ruling dated Feb. 11, the Philippine Dispute Resolution Center Inc., finding “mutual breach” of the agreement by both parties, rescinded the original and derivative lease agreements and ordered the CJHDevCo to cede the leased premises to BCDA while in turn directing the BCDA to return to the CJHDevCo the rental payments it made totaling P1,421,096,052 and further  cleared CJHDevCo from its liability to pay its arrears amounting to P3.3 billion.

“With the latest ruling of the Arbitration Tribunal on the feud between BCDA and CJHDevCo, it is perceived that the city might lose its rightful share from the operation of the Camp John Hay,” Councilor Leandro Yangot Jr. noted in his proposed resolution which seeks to task the city legal office to take legal actions so the city can collect its rightful share following the decision.

“Considering that the lease contract of CJHDevCo was terminated through ‘rescission’ and not ‘expiration,’ the city government has to take all the necessary legal actions in asserting its right over the development done by the CJHDevCo which includes, among others, the possibility of petitioning for 25 percent of the assets which CJHDevCo would relinquish to the BCDA, should a regional trial court confirms the arbiters’ ruling,” Yangot said.

JHMC chairman of the board Silvestre Afable Jr., in a letter to the mayor, confirmed that in ruling for the turn-over of the whole leased premises to the BCDA, the arbitral court stated that “it should be ‘inclusive of all new constructions and permanent improvements introduced during the term of the Lease as reckoned from the execution of the Original Lease Agreement’ or October 19, 1996 ‘in good and tenantable condition.’”

Domogan earlier also brought up the possibility of the city seeking share from the assets to be turned over to the BCDA but said the city’s decision and consequent action will have to wait until the ruling is finalized. – With a report from Aileen P. Refuerzo