May 24, 2024

■  Rimaliza A. Opiña 

UP FOR TURNOVER? — The areas where these two hotels stand are part of the 247-hectare property leased to Camp John Hay Dev’t. Corp., which was ordered by the Supreme Court to be turned over to the Bases Conversion Development Authority, which oversees former U.S. military bases turned into recreational and tourism zones. — Ompong Tan

The Supreme Court has upheld the ruling of the Regional Trial Court Branch 6 in Baguio that affirmed the 2015 final award of arbitration by the Philippine Dispute Resolution Center Inc. (PDRCI) between the Bases Conversion and Development Authority (BCDA) and Camp John Hay Development Corporation (CJDevCo).

The arbitral ruling has ordered mutual rescission of the lease contract between the BCDA and the CJHDevCo and mutual restitution due to breaches in the contract committed by both parties.

The same arbitral ruling has ordered the BCDA to refund the P1,421,096,052 rent that CJHDevCo. has previously paid. 

As spelled out in their 1996 contract, developer CJHDevCo, upon termination of the contract has to turn over, including all improvements within the 247-hectare leased area, to the BCDA.

The PDRCI decision was supposed to be implemented on the same year with the RTC issuing a writ of execution and a notice to vacate to CJHDevCo and its sub-lessees but this was stalled after the CJHDevCo filed at the RTC a very urgent omnibus motion asking that the notice to vacate should exclude CJHDevCo sub-lessees.

Before the RTC could issue a resolution on the omnibus motion, CJHDevCo filed at the Court of Appeals (CA) for certiorari and prohibition. The sub-lessees also filed a separate petition-in-intervention.

The CA nullified the notice to vacate and writ of execution.

The BCDA in turn, assailed the CA’s decision, and filed a petition for review on certiorari before the SC.

In a decision dated April 3, 2024, penned by Justice Japar B. Dimaampao, the SC en banc granted the BCDA petition.

The SC said CJHDevCo’s filing of petition for certiorari at the CA was premature as it did not wait for the RTC’s decision on its omnibus motion. The SC said the CA hastily acted on CJHDevCo’s petition and already ruled on the merits on the proceedings that had yet to be decided at the RTC.

The SC also said the CA’s modification of PDRCI’s decision and which was affirmed by the RTC is invalid.

Citing Section 40 of the Alternative Dispute Resolution Act, and Rule 11.9 of Special Rules of Court on Alternative Dispute Resolution, the SC said an arbitral award, when confirmed at the RTC, cannot be modified. 

The SC said the CA even added additional obligations to be undertaken by BCDA, which was not included in the final arbitral award.

“In the present case, without a showing that any of the grounds to modify the award exist or that the same amounts to a violation of an overriding public policy, the RTC was thus correct in confirming the final award.

On the contrary, the CA failed to abide by the rules of arbitration when it rendered its challenged rulings,” the SC said.

The SC added, nowhere in the final award did it mention that CJHDevCo may vacate the premises, only upon receipt of BCDA’s payment of the P1.4B.

“In requiring the BCDA to fulfill the conditions outside of the final award, the CA made its own findings of fact and provided its own legal interpretation of the parties’ obligations. This is clearly beyond the power of the CA,” the SC said.

The SC also ruled on the CJHDevCo petition for the implementation of its money claims with the Commission on Audit. 

The SC said the COA did not commit grave abuse of discretion as alleged by the CJHDevCo when the COA denied the developer’s money claims, pending decision of the arbitration proceedings.

The SC said the COA was merely following its mandate of ensuring public funds are used judiciously.

“The jurisdiction of the COA over final money judgments rendered by the courts pertains only to the execution stage. The COA’s authority lies in ensuring that public funds are not diverted from their legally appropriated purpose to answer for such money judgments, consistent with its task to guarantee that the enforcement of these final money judgments shall be in accord with auditing laws,” the SC said.

CJHDevCo has yet to issue a statement regarding the SC decision.

The BCDA Public Affairs Department, meanwhile, said the SC decision will finally allow them to recover the leased property and use it for the full interest and benefit of the government and the Filipino people.