Gov’t to lose billions over reversal of ruling on John Hay case, SC told

The luxurious Manor at Camp John Hay. INQUIRER file photo

THE government will lose billions following the Court of Appeals’ decision that stopped the turn over of the 247-hectare parcel of land at the John Hay Special Economic Zone (JHSEZ) in Baguio City and its developments to the Bases Conversion Development Authority (BCDA).

In its 148-page appeal to the Supreme Court, BCDA said the Court of Appeals committed grave abuse of discretion in issuing the ruling penned by Associate Justice Noel Tijam.

The appeals court, in its July 31 ruling reversed and modified a decision of the Arbitral Tribunal of the Philippine Dispute Resolution Center last February that ordered the private CJH Development Corporation (CJHDevCo) to vacate Camp John Hay and deliver leased property including new constructions and permanent improvements to BCDA.

It also ordered BCDA to return P1.42 billion in rentals to CJHDevCo subject to proper processes by the Commission on Audit (COA).

The Baguio Regional Trial Court issued a decision for the final award to make the tribunal decision binding, executory and non-appealable and a writ of execution.

But CJHDevCo took the case to the appeals court and secured a restraining order.

Tijam also ruled that sub-lessees should not be evicted, contrary to the admission of Camp John Hay that its contractual relationship with the so-called “third parties” was a sublease.

BCDA said the CJHDevCo may have misled sub-lessees into believing that they were not affected by the final award.

The BCDA said since the start of the lease of government property to CJHDevCo, from 1998 to 2000, CJHDevCo fraudulently paid more than P1.274 billion as dividends and advances to its stockholders, affiliates but told BCDA that it was financially incapacitated to defer rental payments of at least P1.275 billion during the same period.

They also told the high court that the appeals court went beyond its “limited jurisdiction” when it imposed additional obligations to them such as assisting in the processing of CJHDevCo’s claim with the COA and the order not to disturb various contracts with third parties.

BCDA pointed out that the appeals court duty is only to “resolving only errors of jurisdiction.”

BCDA head for legal services lawyer Peter Paul Andrew Flores said based on the merits of the case, they are confident that the high court will rule on their favor.

He said that if the appeals court decision will be enforced, the government will not benefit because the sub-lessees have already paid their lease to CJHDevCo until 2046.

The structures will be worthless by the time these are turned over to the BCDA in 2046 as the useable life of a building is only about 50 years, he said.

“Government has not earned anything from the Camp John Hay lease since 1997 and government will not earn anything while Mr. Sobrepeña continues to exploit and profit from the use of government property until 2046. Where is the justice in that,” Flores said.