CA stopped eviction of over 1,600 investors in Camp John Hay

The Court of Appeals on Friday stopped the eviction of more than 1,600 third party investors and private developers of Camp John Hay Development Corporation (CJHDEVCO) from the 247-hectare former American recreational facility unless the Bases Conversion and Development Authority (BCDA) fully comply with the arbitral tribunal’s order to pay the company P1.4 billion.

CJHDEVCO, in its petition, sought to stop the implementation of the Writ of Execution and Notice to Vacate issued by Judge Cecilia Corazon S. Dulay-Archog of Baguio City RTC Branch against the Camp John Hay developer and the third parties occupying the leased property.

In a 67-page decision, the appeals court’s former Special Fifth Division through Associate Justice Noel Tijam said “the instant petition for certiorari is granted. Accordingly, public respondents are ordered to cease and desist from enforcing the Writ of Execution dated April 14, 2015 and Notice to Vacate dated April 20, 2015 against petitioner CJH Development Corporation until it is fully paid of the amount of P1,421,096,052 as indicated in the Arbitral Award,” the CA ruled.

The appeals court said CJHDEVCO will only vacate the area upon payment of its claim worth P1,421,096,052.

However, the appeals court prohibited CJHDEVCO from entering into new contracts with third party investors “and/or perform any action that would contravene the tenor of the arbitral award before receipt of its payment.”

The appellate court also ruled in favor of the third party investors and intervenors Camp John Hay Golf Club, Inc.; CAP-John Hay Trade and Cultural Center, Inc.; Creative Era Limited; Francor Inc. et. al.; and restrained the Baguio City court and the BCDA from enforcing its eviction orders against “third parties occupying the leased premises until their respective rights and interests are determined under compulsory arbitration or as may be adjudicated by the regular courts.”

The appellate court directed the BCDA “to respect and not to disturb the various contracts of the Third Parties occupying the leased premises,” as well as “to assist in the processing of the claim of petitioner CJH Development Corporation filed with the Commission on Audit, who must act within 60 days, pursuant to existing laws.”

The appellate court held that the Baguio RTC committed grave abuse of discretion in enforcing the arbitral award against third parties occupying the leased property.

The appeals court said the arbitral decision  merely settled the dispute between CJHDEVCO and BCDA. “These third parties invested their hard earned money in the said buildings and improvements in good faith and acquired the same for value. The third parties acted in good faith investing their money in the improvements and acquired the same prior to the existence of the dispute between CJHDEVCO and BCDA and prior to the commencement of the arbitration,” the appeals court said.

The appeals court added that rights of the third party investors were violated “when public respondents sought to enforce and execute the final Arbitral Award against them.”

However, the appellate court directed the third parties “to submit themselves to arbitration with BCDA pursuant to the provisions of the Original Lease Agreement which are equally binding on the third parties and existing laws and jurisprudence.”

“In the alternative, if the parties refuse to submit to compulsory arbitration, they should immediately litigate their respective rights and obligations before the regular courts,” the CA declared.

Associate Justices Myra Garcia-Fernandez and Victoria Isabel Paredes concurred with the ruling.

The petitioner-intervenors sought refuge from the appellate court after the BCDA included Camp John Hay tenants in the implementation of the Baguio RTC orders.

They argued that the final arbitration award issued by the Philippine Dispute Resolution Center  Inc. (PDRCI) is binding only between the BCDA and CJHDEVCO, who are the parties in the case and not on the third party investors.

On May 12, 2015, CJHDEVCO filed a petition for certiorari and prohibition with urgent applications for the issuance of a TRO and/or a writ of preliminary injunction against the implementation of the Writ of Execution and the Notice to Vacate issued by the Baguio City RTC.

Prior to this, the PDRCI arbitral tribunal rendered the final award, rescinding the  lease agreement between BCDA and CJHDEVCO due to mutual breach of the parties.

In the said final award, petitioner was ordered to vacate the leased property and to promptly deliver the same to BCDA.

On the other hand, the BCDA was ordered to return to CJHDEVCO the amount of P1,421,096,052, representing the total rentals paid by the latter.

On March 6, 2015, CJHDEVCO filed its verified petition for confirmation of final award before the Baguio RTC, which the latter confirmed in toto on March 27, 2015.

However, the Baguio City RTC and BCDA included the third parties in the implementation of the notice to vacate, prompting the CJHDEVCO to seek redress from the appeals court.