Arbitration panel formed to resolve John Hay feud

BAGUIO CITY—The developer of Camp John Hay on Friday said it is forming an arbitration panel as it awaits an order from the Philippine Dispute Resolution Center (PDRC) to start a court-imposed mediation with the Bases Conversion and Development Authority (BCDA).

The BCDA and Camp John Hay Development Corp. (CJHDevco) had been engaged in a public feud over the John Hay development contract until Baguio Judge Cecilia Corazon Dulay-Archog on July 13 directed them to submit to arbitration.

CJHDevco had rescinded a restructured lease agreement in 2011 to pursue arbitration, triggering the feud, which culminated in several lawsuits and a contract termination notice issued in May by the BCDA.

At a Friday news conference, lawyer Manuel Ubarra, CJHDevco vice president for litigation and spokesperson, said the arbitration clause of the John Hay lease contract requires both parties to establish a negotiating panel that will appear in PDRC sessions.

Ubarra also announced that the firm will pay a P736-million injunction bond required by the court when it restrained the  BCDA from undertaking any attempt to take over the former American rest and recreation baseland.

In a July 22 statement, BCDA president Arnel Paciano Casanova said posting the bond “may contradict earlier claims that financial losses prevented  [CJHDevco] from settling its lease obligation.”

“Once CJHDevco posts the bond, it will demonstrate that it has the financial capability to pay its lease obligations … We are doubtful that CJHDevco will post the bond as it would likely betray itself, since it has claimed financial losses as reason for defaulting on its obligations,” Casanova said.

Alfredo Yñiquez III, CJHDevco executive vice president and chief operating officer, said arbitration could commence in August.

“If the BCDA does not file a motion for reconsideration [contesting Archog’s July 13 ruling], then we could speed up the process of arbitration,” Ubarra said.

Yñiguez said the arbitration process coincides with the official launching of The Suites on Sept. 1. He said The Suites was started in 2003 when CJHDevco lost its tax benefits owing to a Supreme Court ruling that nullified the fiscal incentives offered by the John Hay Special Economic Zone.

This situation ignited an earlier contractual dispute between CJHDevco and the BCDA, which led to the termination of the lease in 2005. The dispute was resolved through a renegotiated lease agreement in 2008. Vincent Cabreza, Inquirer Northern Luzon