June 24, 2024

■  Hanna C. Lacsamana

Will the Supreme Court decision voiding the more than two-decade lease agreement between Bases Conversion and Development Authority and developer Camp John Hay Development Corp. over CJH pave the way for the city government to collect what it has long been owed?

City officials are trying to figure out ways to collect the long-standing unpaid shares of the city from the lease rental over CJH reservation and where do the city’s interests now lie after the SC upheld the arbitral ruling of the Regional Trial Court that annulled the BCDA-CJHDevco lease agreement due to mutual breaches of the contract and ordering the latter to vacate the leased premises and for BCDA to refund over P1.4 billion the developer paid as rental.

The city is entitled to 25 percent of the rentals over the leased premises, by virtue of Sections 9 and 10 of Resolution 362, s. 1994 which contains the 19 conditions of the city for the development of the former air station that has been placed under the management of BCDA.

Based on its press statement, the SC en banc granted the petition for review on certiorari filed by BCDA assailing the rulings of the Court of Appeals which had reversed the RTC’s confirmation of the arbitral ruling.

It also denied the petition for certiorari filed by CJHDevco challenging the rulings of the Commission on Audit for dismissing its money claim arising from the arbitral ruling.

The case stemmed from a complaint filed by CJHDevco against BCDA in arbitration with the Philippine Dispute Resolution Center, Inc., which found both parties were guilty of breaches of their obligations under the agreement, thus its mutual rescission was warranted, and ordered mutual restitution.

During an inquiry on the city council’s May 27 session, City Treasurer Alex Cabarrubias said the city stands to receive a total of P1,056,251,723, which represents 25 percent of the total payment of the developer to BCDA up to 2016.

He said the contract between BCDA and CJHDevco stated the developer will pay BCDA P425,001,378 for the first five years, and P150 million a year for the succeeding years.

Cabarrubias said the last time BCDA paid the city was in 2011, totalling more than P238M, which placed its indebtedness to the city based on the contract at P817,631,255.

The city received payment six times, the first three in the form of projects worth P10M; P44,568,167, and P30,898,000, respectively; and three checks for P50M on Feb. 11, 2004; P50M on Sept. 3, 2008; and P60M on May 27, 2011.

He told the council the city wrote BCDA in June 29, 2023 reminding it of its liabilities under the 19 conditions and not based on its contract with CJHDevco.

He was recently instructed by the city mayor to send a follow-up letter, which is currently with the City Legal Office.

Councilor Fred Bagbagen then asked: With the SC decision concurring with the arbitral ruling of the RTC where BCDA will return P1.4 billion and CJHDevCo will return the 247-hectare leased premises it occupied with all improvements, how will it affect the city’s collectibles from BCDA?

Once the contract is finally voided as if it did not exist, Councilor Lourdes Tabanda also asked about its effect on the claims and prior payments made to the city.

City Legal Officer Atty. Althea Alberto said the office cannot comment as it has yet to see the decision, but it is the reiteration of the arbitral ruling and their belief based on the SC press statement that the parties are restored to the position that they were in prior to entering into a contract.

“And if all the rentals are to be returned, the city will not be able to get legally any share because the 19 conditions state 25 percent of the rentals. If there are no rentals, do we still have a right to collect and shall we return or reimburse whatever we received?” Tabanda said, and further asked whether it would be too late for the city to intervene in the case?

Alberto said since the decision has not been published yet, it might be premature for the office to give an opinion if the city can still intervene at this point.

“We understand that the city has also an interest in this case, so if there are remedies for us, we will look into it,” she said.

Atty. Leticia Clemente, city budget officer and chair of the Local Finance Committee, said there should be a re-computation and a reconciliation of the amount owed the city, as it would seem that the city’s basis may not be the basis of BCDA and CJHDevCo.

“It necessitates reconciliation with BCDA considering in 2008, they revised the lease agreement with the CJHDevCo,” Clemente said.

Cabarrubias said in a meeting with BCDA in 2021, the city was told that it may be required to return the P238M if BCDA returns the P1.4B to CJHDevco, but not in cash but in the form of an advance payment if there will be another rental agreement.

Vice Mayor Faustino Olowan said they should address the lack of intervention on the part of the city government in the BCDA-CJHDevco case.

“Why did the city not intervene in that case? Parang ang lumalabas, nagbayaran lang ang BCDA at CJHDevco, pero anong mapapala ng city sa desisyon na ‘yon? Mukhang wala, dahil hindi tayo nag-intervene. The case was filed in 2010. Anong ginawa ng officials natin? We never intervened, nasa sidelines lang tayo, nanonood lang. What should we do now, as officials of the city?” Olowan said.

He added several resolutions were approved by the city council for the CLO to collect by sending demand letters to BCDA and that they owe the public for not filing a case against BCDA.

The city council has resolved to invite representatives from BCDA, its implementing arm John Hay Management Corporation, CJHDevco, Office of the Government Corporate Counsel which handles the BCDA, and other concerned agencies to its session on June 17 to discuss its obligations to the city and the implications of the SC ruling to the performance of such obligations.

The CTO was also requested to provide the council all documents pertaining to unpaid BCDA obligations to the city for further study and guidance in coming up with appropriate action.