Mary Ann LL. Reyes | The Philippine Star | June 28, 2015

Just last month, Camp John Hay Development Corp. (CJHDevCo) sent to Baguio City Mayor Mauricio Domogan what can be interpreted as a desperate call for help.

CJHDevCo had complained to the mayor about an incident in which the Bases Conversion and Development Authority (BCDA) allegedly commandeered a portion of Camp John Hay (CJH) with some 20 armed guards in tow, in apparent violation of standing orders from the Regional Trial Court (RTC) and the ruling of an arbitral tribunal of the Philippine Dispute Resolution Center Inc. (PDRCI) designed for the peaceful settlement of a long-running legal standoff.

CJHDevCo specifically asked the mayor to direct the Baguio City police to abide by their sworn duty as law enforcers to be fair and just, to ensure that no violent act, illegal occupation, confrontational scenario that may cause injury or loss of life will occur.

As for the alleged electricity theft and BCDA’s refusal to settle its delinquent power bills, CJHDevCo executive vice president Shean Bedi wrote John Hay Management Corp. last June 16, complaining about the refusal of BCDA/JHMC to settle the outstanding balance of their electricity bills amounting to P213,008.37 as of February 2015. CJHDevCo discovered a jumper cable installed in the electric meter for Voice of America Unit No. 5 which it removed, only to find out that it was reinstalled.

According to CJHDevCo, BCDA had refused to settle its delinquent electricity bills for five VOA cottages occupied by its officers, prompting the private partner to cut off power from these facilities. But rather than settle its overdue bills, BCDA allegedly resorted to electricity theft by installing jumpers at the five VOA cottages to re-connect these to the main power line. (One of these cottages is reportedly being used by Casanova himself.)

These are just but a few examples of how government, through one of its agencies, can turn off prospective as well as existing investors and turn to naught efforts by no less than President Aquino to promote Public-Private Partnerships.

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Earlier, CJHDevCo twice put up tarpaulins explaining the temporary restraining order (TRO) that had been issued by the RTC to stop BCDA from forcibly evicting CJH’s sub-locators or third-party investors not covered by the arbitration case, but BCDA guards tore these down.

Given the police inaction on these incidents, there is suspicion that the law enforcers are in cahoots with the BCDA and its subsidiary JHMC or are probably being pressured to look the other way in the face of such illicit acts by a state-run firm.

CJHDevCo has for 18 years been the developer-private partner of BCDA, a state-run firm supposedly in-charge of enticing investors to bankroll the conversion of former military installations like CJH and BGC into special economic zones (SEZs) as a sort of post-Cold War peace dividend.

Chronic feuding between BCDA and CJHDevCo at CJH, owing in large part to the lessor’s serial violations of its original lease deal or memorandum of agreement (MOA) and revised memorandums (RMOAs) with CJHDevCo, culminated in a two-year arbitration case that culminated last February with the Philippine Dispute Resolution Center Inc. (PDRCI)’s rescission of the 18-year-old lease agreement and orders for the lessee to vacate the SEZ and for BCDA to return P1.42 billion in rental payments to CJHDevCo.

On April 14, the Baguio RTC handed out a writ of execution to implement the PDRCI decision, which required BCDA to return P1.42 billion in rent already paid, in exchange for CJHDevCo’s withdrawal from, and turn over of facilities and improvements at the 247-hectare property it has been leasing at CJH.

But rather than end the long-running feud, PDRCI’s arbitral ruling and its subsequent affirmation by the Baguio RTC only led to further turmoil as the BCDA refused to pay CJHDevCo and, worse, wants CJH’s 1,631 sub-lessees evicted from SEZ even if they are third-party investors “in good faith” who are protected by law from such arbitration cases or legal disputes between lessors and their principal lessees.

While BCDA had deposited the amount in an escrow account at the Development Bank of the Philippines in the name of the Baguio RTC, CJHDevco said this is not in compliance with the PDRCI ruling as the directive naturally requires the lessor to give the refund in cash or in check directly to the lessee.

Meanwhile, former Chief Justice Artemio Panganiban no less has stressed in a recent newspaper column that, “as innocent bystanders who were not parties to the arbitration, (third-party CJH investors) should not be penalized and deprived of what they had paid for in good faith.”

He added: “While the arbitral decision may have settled the dispute between the two parties, it did not touch on the rights and obligations of the investors, locators and condominium owners in Camp John Hay who were not parties to the arbitration. But, in good faith, they paid CJHDevCo for their rights over the homes, condominiums, golf club shares and other improvements built thereon by the developer… Their payments cannot just dissipate into nothingness. Surely, the BCDA which was adjudged to take over Camp John Hay should treat them reasonably, equitably and fairly. After all, when they contracted with CJHDevCo, the lease agreement between the two parties was still valid and existing. It became invalid only after it was rescinded by the arbitral tribunal last February.”

Business groups like the European Chamber of Commerce in the Philippines (ECCP) have observed that despite the successive ratings upgrades that have propped up the Philippines as Asia’s newest economic star, most investors have opted to bypass it and park their money elsewhere in the region because of the government’s proclivity for ignoring the sanctity of contracts or for changing business rules midstream.

BCDA’s belligerent attitude is not helping.