By Ducky Paredes on January 08, 2015
A REGIIONAL Trial Court has again slapped down yet another legal fiasco before the yearend — the Bases Conversion and Development Authority (BCDA)’s “selective prosecution” estafa case against Robert John Sobrepeña of the Camp John Hay Development Corp. in Baguio City.
Judge Pedro Gutierrez of Pasay City RTC Branch 119 upheld his Sept. 3 decision that BCDA president Arnel Paciano Casanova failed to establish probable cause in an estafa charge against Chairman Sobrepeña of CJHDevco. Casanova accused Sobrepeña of making false representations when the developer said that CJHDevco was incapable of paying rentals for its 247-hectare holding at the John Hay Special Economic Zone (JHSEZ) in 1998.
In his decision, Gutierrez said: “BCDA agreed to restructure the debt under the lease. The accused (Sobrepeña) cannot be held liable for CJHDevco’s failure to pay those rentals.
“This case was filed with the DOJ (Department of Justice) after a lapse of 14 years when the obligation was incurred in 1998. This violated the Bill of Rights under our Constitution for accused to have a speedy trial and due process of law.”
The Judge also said that the DOJ “made a palpable error of selective prosecution” in filing this case against Sobrepeña without including all the members of CJHDevco’s Board of Directors.
In fact, CJHDevco’s decision to file an arbitration case against its lessor before the Philippine Dispute Resolution Center Inc. (PDRCI) in 2012 was prompted by BCDA’s repeated violations of the original Memorandum of Agreement (MOA) and Revised MOAs (RMOAs).
In 1998, when BCDA was headed by now Public Works and Highways Secretary Rogelio, BCDA approved CJHDevco’s payment-deferral request on the understanding and recognition that its private partner had encountered financial difficulties largely because of BCDA’s repeated MOA and RMOA breaches.
BCDA has suffered a number of court setbacks on the Casanova watch of Casanova, whose obsession seems to be that of engaging private developer-partners in legal battles, which, at best, has to be at cross purposes with BCDA’s reason for being, which is to promote investments in former military bases that have been turned into growth hubs.
BCDA’s unwarranted acts of belligerence against its own private partners—namely CJHDevco at the John Hay Special Economic Zone (JHSEZ) in Baguio City and SM Land Inc. (SMLI) at Taguig’s Bonifacio Global City (BGC) – dampens investor confidence in PPP projects and other big-ticket joint ventures with the government, despite the successive credit upgrades of the Philippine economy as Asia’s new growth haven.
Apart from losing cases it filed against CJHDevco at the RTC and Court of Appeals (CA) and against SMLI at the Supreme Court, Casanova also has a probable court battle with the Manila North Tollways Corp. over BCDA’s surprise move to subject the MNTC’s Subic-Tarlac-Clark Expressway (SCTEX) to a price challenge despite the thrice-negotiated operation and maintenance (O&M) deal under the Aquino presidency that the past Administration approved in 2009.
Despite MNTC’s submission of a much better offer at the end of the third negotiations that ended in 2013, BCDA decided nonetheless to go back to square one by offering the O&M deal to competitive bidding last month.
Worse, BCDA announced the SCTEX price challenge without first informing MNTC and discussing the Terms of Reference (TOR) for this planned auction, in gross violation of the Business and Operating Agreement (BOA) that the parties signed in 2011.
Screwing BCDA’s private partners and its other stakeholders may be Casanova’s life-goal, judging by his hostile behavior towards MNTC, SMLI, CJHDevco and even seemingly harmless active and retired military officers residing in a portion of the former Fort Bonifacio army camp at BGC.
In 2012, BCDA tried to forcibly demolish the homes of retired and active military personnel residing in a portion of the Diplomatic and Consular Area in Bonifacio South.
However, the structures were outside BCDA’s jurisdiction since the area was not part of JUSMAG but were part of the Diplomatic and Consular Area, outside of BCDA control.
Later, Casanova and heavily armed security men went to the site of SM Aura (across the Ayala-owned Market! Market! Mall) just a week before SM’s grand opening where members of the international press saw harassed SM staff and security stop all activities because Casanoiva claimed that the land was supposedly under BCDA’s right of way.
Again, Casanova was wrong.
First of all, the gun ban by the Commission on Elections (Comelec) was still in force at that time, so Casanova’s goons had no business parading their firearms while harassing their SM counterparts.
Secondly, the contested area legally falls under SM’s jurisdiction, as it had been leased to the company by, and obtained the proper permits from, the local government of Taguig City.
Casanova should have been haled to court for violating the Comelec’s gun ban and terrorizing the SM Aura staff with his gun-toting thugs in tow.
Last year, the Court of Appeals (CA) upheld the earlier decision by the Baguio City RTC ordering BCDA to settle its longstanding dispute with CJHDevco over the lease and development of a JHSEZ property.
In a 14-page decision penned by Associate Justice Victoria Isabel Paredes, the CA’s Special 11th Division affirmed the July 13, 2012 order by Baguio RTC Judge Cecilia Corazon Archog ordering the BCDA to submit itself to arbitration proceedings to resolve its financial dispute with CJHDevco.
The appellate court, in stressing the SC’s policy favoring arbitration as an alternative method of dispute resolution, declared that: “Finally, the records of the case reveal that the factual allegations of the parties already refer to the merits of the controversy between them, which is the alleged breach of their RMOA (Restructuring Memorandum of Agreement). These issues are best threshed out in the appropriate arbitration proceedings.”
Meanwhile, the Supreme Court permanently ordered the BCDA last Aug. 13 to abide by its original agreement with SMLI on a Swiss or competitive challenge for the development of the 33-hectare Bonifacio South Pointe property at BGC.
This SC order made permanent the Temporary Restraining Order (TRO) that it issued in January 2013 after SMLI filed a petition for certiorari, prohibition and mandamus against BCDA for reneging on its commitment to carry out a competitive challenge on SMLI’s unsolicited proposal by arbitrarily deciding to hold a public bidding instead for this property in BGC.
The SC ruling written by Associate Justice Presbitero Velasco Jr., ordered the BCDA to go ahead with the Swiss challenge as petitioned by SMLI:
“To permit BCDA to suddenly cancel the procurement process and strip SMLI of its earlier-enumerated rights as an original proponent at this point – after the former has already benefited from SMLI’s proposal through the acquisition of information and ideas for the development of the subject property – would unjustly enrich the agency through the efforts of petitioner.”
BCDA and CJHDevco are awaiting the resolution of their case at the Philippine Dispute Resolution Center Inc., which is expected to hand out its decision any time now.
But rather than simply wait for PDRCI to announce its verdict–and in violation of the repeated appeals by Congress and Baguio’s elective officials for both parties to settle their differences amicably, Casanova once again mounted a vile media offensive against CJHDevco in an obvious scheme to influence or preempt the decision during 2014’s last quarter.
Contrary to BCDA’s claims about CJHDevco’s alleged MOA/RMOA breaches, the PDRCI arbitration case was actually about at least 10 lease contract violations by BCDA:
Delay in the release of the ECC (without which not even groundbreaking could be done) until two (2) years into the project;
Delay in the turnover of 32 hectares of the leased area (done only in May 2000);
Failure to deliver some 79% of the 18-hectare developable footprint of the leased property;
Failure to immediately demolish pre-1996 existing structures within the leased property at JHSEZ (completed only in 2003);
Supreme Court’s withdrawal of the tax and duty incentives within the leased JHSEZ area as warranted by BCDA;
Failure to secure approval by the Commission on Audit (COA) for the BCDA-CJHDevco MOA) dated July 14, 2000;
Delay in the issuance of the implementing rules and regulations (IRR) for the JHSEZ; (accomplished only in 2000);
Delay in securing a MOA with the Bureau of Customs (BOC);
Failure to work on the lifting of the local ban on the processing and issuance of all developmental, building and tree-cutting permits within JHSEZ from August 2004 to 2007; and
Non-creation of the mandated One Stop Action Center (OSAC) to process and issue all national and local developmental permits and other permits needed by CJHDevco and its locators.
The supposed P3.4-billion in unpaid rentals is only in Casanova’s imagination because CJHDevco:
Is actually up to date in its payments–based on the actual implementation (or lack of it) of the 1999 MOA and the subsequent revisions (RMOAs)–and
Has already invested P5 billion-plus in developmental and operational costs plus interest expenses in its leased JHSEZ property.
This P3.4-billion claim is illusory as it represents accumulated suspended rentals payments during the five-year period (2003-2007) when BCDA was in breach of contract after the Supreme Court revoked the SEZ status of Camp John Hay, resulting to complete stoppage of all construction and development work, and suspension of all building permits inside Camp John Hay, thereby barring CJHDevco from proceeding with site development.
But despite the BCDA’s continuous, successive and repeated MOA/RMOA breaches, CJHDevco–in a sign of good faith–has thus far remitted P1.4 billion, or 40% of its dues to the government, even as Casanova’s Office has only delivered 21% of its commitments under the 1999 MOA, enabling the firm to develop just four of 25 hectares.
The lease agreement was signed in 1996 when CJHDevco agreed to develop the JHSEZ after the highest bidder (Manuela Land Corp.) opted not to pursue the project after winning the auction.
(CJHDevco was the second-highest bidder in that pubic bidding, while Ayala Corp. was the third highest one.)
Three revisions or RMOAs have governed this project owing to the BCDA’s repeated transgressions of its accords with CJHDevco..
CJHDevco took the correct legal steps in 2012 in rescinding the 3rd RMOA and turned to PDRCI arbitration in 2012 as a last recourse.
This was also because of calls by the House special committee on bases conversion and Baguio’s elective officials for the parties to end their feud that prevented the city from getting its 25% share of JHSEZ rental payments.
CJHDevco filed a P14.44-billion damage claim against BCDA at the PDRCI for its financial losses arising from the OSAC fiasco and the rest of the agency’s repeated RMOA violations.