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John Hay arbitration awaited as firm pays P736M in bond

/ 09:55 PM August 25, 2012

BAGUIO CITY—The developer of Camp John Hay has posted a P736.3-million bond to fulfill the requirement of a court injunction against John Hay’s administrator, the Bases Conversion and Development Authority (BCDA), but both parties have yet to sit down for mediation as the court has directed.

Lawyer Manuel Ubarra, spokesperson and vice president for litigation of the Camp John Hay Development Corporation (CJHDevco), said on Saturday that the Philippine Dispute Resolution Center has not yet notified the parties as to when it will start deliberating on their feud.

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Baguio Judge Cecilia Corazon Archog directed both parties to submit to arbitration in a July 13 ruling.

Archog, the fourth judge to handle the dispute between CJHDevco and BCDA this year, also directed CJHDevco to pay the bond attached to the preliminary injunction issued on April 27 by Baguio Judge Cleto Villacorta III.

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Ubarra said the injunction preserves the status quo and will prevent BCDA from acting against the developer during the arbitration, including any attempt to award the John Hay project to a new investor.

CJHDevco assumed the John Hay project in 1996 after the winning bidder, Manuela Lands, backed out. The developer negotiated several lease restructuring deals with BCDA after it lost its financial benefits following a 2003 Supreme Court ruling that nullified John Hay’s tax incentives. The incentives were restored by a new law.

But in December last year, CJHDevco rescinded the 2008 restructuring memorandum of agreement (RMOA) over government’s contractual breaches, and had filed a petition for arbitration at the Philippine Dispute Resolution Center in January.

On May 15, the BCDA board of directors terminated the John Hay lease contract, after declaring that CJHDevco defaulted on its P3-billion rental obligations. It also issued a notice of eviction to the developer.

Ubarra said the company’s arbitration complaint dwells on the government’s failure to issue all of CJHDevco’s development permits within a 30-day period, including tree-cutting permits, as prescribed by the rescinded RMOA.

The arbitration, however, will no longer discuss what CJHDevco had paid BCDA under a dacion en pago transaction which is part of the rescinded 2008 RMOA, he said.

Dacion en pago is a transaction where an indebted party settles its obligations by turning over pieces of properties to its debtor. Vincent Cabreza, Inquirer Northern Luzon

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TAGS: Bases Conversion and Development Authority, BCDA, Camp John Hay Development Corp., Camp John Hay dispute, CJHDevco, News, Regions
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