Corporate Securities Info

Standoff at Camp John Hay

Like ants caught in a fight between two elephants.

This is the situation the locators and sub-lessees of John Hay Special Economic Zone find themselves at present in the ongoing dispute between the Bases Conversion and Development Authority (BCDA) and Camp John Hay Development Corp. (CJHDevco) over control of the former American military station.


An arbitration panel earlier ruled that both parties violated the 1996 agreement that required CJHDevco to convert 247 hectares of the area into a tourism estate.

The arbiters ordered CJHDevco to return to the government the leased premises, including new constructions and permanent improvements made during the lease, in good and tenantable condition, except for reasonable wear and tear.


At the same time, BCDA was directed to reimburse CJHDevco P1.42 billion which represents the rent it paid for the use of the leased areas.

Under the Arbitration Law, the ruling cannot be enforced unless confirmed by the Baguio court that earlier ordered the parties to enter into arbitration to resolve their dispute.


Although both parties have sought confirmation of the award, they tacked conditions to their action. BCDA wants the premises turned over before reimbursing CJHDevco the rentals it paid.

CJHDevco, for its part, is asking that it be paid first before making the turnover and that the court appoint an administrator to supervise the property’s reversion to BCDA.

In the exchange of barbs between the parties, the interests of the locators and sub-lessees have taken a back seat. The status of their lease contracts is a big question mark.

CJHDevco insists the contracts should be honored by BCDA since it knew about them and did not interpose any objection. BCDA is averse to that idea because of CJHDevco’s alleged refusal, on grounds of confidentiality, to give them copies of the contracts when requested.


With the prospects of CJHDevco and BCDA agreeing on a satisfactory solution to this issue quite dim, the locators and sub-lessees are practically on their own in protecting their rights in the lease contracts they entered in good faith with CJHDevco.

Leaving the fate of their investments to the main protagonists in the dispute would be risky. CJHDevco just wants to get its money and run. BCDA can’t wait to get its hands on the premises.

Both parties are engaged in a game of one-upmanship that may result in the investors becoming collateral damage when the dust settles.

Judicial relief

The investors’ relief for their predicament rests with the Baguio court that has the final word on the arbitration award.

The court can modify or set aside the award for reasons of, among others, fraud or evident partiality. It is doubtful though if it will do that because neither party has alleged any of the grounds that would justify such action.

Consistent with its broad judicial powers and to put to rest the issues that led to the arbitration, the court can determine the manner or procedure of implementing the arbiters’ ruling taking into consideration the prevailing circumstances and incidents in the leased premises.

Time and again, the Supreme Court has called on the lower courts to resolve all issues involved in cases filed before them that are within their jurisdiction to minimize or avoid further litigation.

In the interest of justice and to put closure to this four-year-old case, the Baguio court can take cognizance of the issue involving the status or treatment of the investors’ contracts with CJHDevco when BCDA takes over the areas.

For this purpose, the locators and sub-lessees can collectively file a “motion for intervention” with the court as it decides on whether or not to confirm the arbitration award.


The Rules of Court allow “a person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court” to intervene, after prior permission, in a pending case.

If the court believes the intervention will not delay or prejudice the adjudication of the rights of the original parties, the request for intervention will be granted.

The contracts between CJHDevco and the investors are material to the premises that CJHDevco has been ordered to return to the government. The structures built by the investors form part of the new constructions and improvements made during the lease.

Besides, the issue involved is simple: Is BCDA obliged to honor the contracts?

The hearing on this matter will not unduly delay the confirmation of the award. No lengthy presentation of evidence is needed to resolve it. The contracts can speak for themselves.

Were they signed in good faith by the parties? Are their terms and conditions reasonable and consistent to all similarly situated locators or sub-lessees?

To allay BCDA’s concern that irregularities attended the signing of these contracts which CJHDevco refused to give copies to the former, the court can order their production and examination.

If CJHDevco refuses, the court can cite it for contempt or hold the release of the P1.42 billion reimbursement until it complies with its order.

It’s wishful thinking for the investors to expect CJHDevco to carry the fight to protect their interests.

The people behind CJHDevco are the same people behind preneed company College Assurance Plan that went bankrupt in 2006 and left thousands of parents and students financially stranded.

For comments, send your e-mail to “[email protected]

Subscribe to Inquirer Business Newsletter
Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: BCDA, Camp John Hay, CJHDevco, John Hay Special Economic Zone
For feedback, complaints, or inquiries, contact us.

© Copyright 1997-2020 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.