SM stands by reclamation deal with Pasay gov’t

Henry Sy’s SM Land Inc. said it would remain committed to the 300-hectare joint venture reclamation deal with Pasay City even after the city council had a change of heart.

SM Land said in a statement yesterday that “legal remedies” were available amid an emerging disagreement between the Pasay City government and its city council which, in a surprise move, decided to recall its resolutions allegedly because of deficiencies in the bidding process.

“We don’t want to delve on … why the City Council is now belatedly withdrawing its support. But frankly, they were ill-advised,” said Dave L. Rafael, SM Land senior vice president. “We have a perfected and legally binding contract which was duly ratified by the city council. The council cannot just unilaterally cancel this contract by issuing another resolution recalling its previous resolutions without due process and in violation of the constitutional rights of [SM Land].”

SM Land noted that legal options were not yet being considered, citing its long relationship with officials of the Pasay City government. SM Land, a unit of SM Prime Holdings, is the developer of the Mall of Asia complex located in the city.

“[SM Land] is not even considering such a remedy at the moment as it wants to put a premium on the productive relationship it has developed and built with the Pasay City government and the council over the last 17 years,” its statement showed.

The unraveling situation again brings to the fore investors’ concerns about the sanctity of contracts in the country as the joint venture agreement between the city government and SM Land was a “valid and binding” agreement, it said.

The Pasay City government and its PPP selection committee, in a separate statement Thursday, stood by its decision to enter into the joint venture agreement with SM Land for the massive unsolicited reclamation deal valued at P54.5 billion.

“The recall was done by the City Council without giving SM Land Inc. the opportunity to explain and/or defend itself in a hearing,” the city government statement showed. “Moreover, the recall … was hastily conducted without due regard to the rights of those concerned nor for the legal and moral implications of such an action.”