On 11 February 2015, the arbitral tribunal issued its Award in the arbitration between CJH Development Corporation (“CJHDevCo”) and the Bases Conversion and Development Authority (“BCDA”).

 

In the Award, the BCDA was ordered to return to CJHDevCo approximately Php1.42 Billion in rentals that it had paid to the BCDA. In turn, CJHDevCo was directed to vacate the Leased Property and turn it over to the BCDA with all improvements that CJHDevCO had introduced therein during the term of the lease. BCDA was found to be in breach and CJHDevCo was absolved of liability for the supposed Php3.3 Billion in back rentals that the BCDA had claimed against CJHDevCo.

We are pleased that the arbitral tribunal dismissed the BCDA’s claim for back rentals which we have always maintained were never due. We are also grateful that the substantial rentals the company paid in the course of over more than a decade, were ordered returned to CJHDevCo. Be that as it may, we are currently studying our legal options.

In the meantime, neither party can implement the Award, without an order confirming the same and a writ of execution being issued by the court. Please note that the writ of preliminary injunction enjoining the BCDA from taking over Camp John Hay remains in full force and effect unless the court orders otherwise.

Rest assured that the rights and interests of sub-lessees and sub- locators in Camp John Hay will continue to- be respected and protected. The BCDA consented to all sub-leases within the camp when it expressly gave, in the lease agreement itself, CJHDevCo the right to sub-lease various areas and real estate inventory therein. Indeed, the lease contract between BCDA and CJHDevCo obligated the latter to build structures precisely for subletting to third parties. The BCDA is also fully aware that the various properties inside the camp were sub-let to various third parties in good faith. The BCDA is, in fact, in possession of the various contracts covering these properties and has never raised any objection to them. Moreover, we understand that the directive in the arbitral award that CJHDevCo turn over all improvements in Camp John Hay to the BCDA (which, as discussed, cannot yet be implemented), necessarily carries with it the attendant directive that any rights pertaining to said improvements also be delivered to, and honored by, the BCDA.

We trust that, even with the issuance of the Award, the parties will act in good faith and with due regard for the rights and interests of innocent third parties who are not involved in the dispute between CJHDevCo and the BCDA.