SC upholds order for firm to vacate John Hay ecozone

The Supreme Court (SC) has upheld an arbitral ruling ordering the Camp John Hay Development Corporation to vacate a portion of the John Hay Special Economic Zone (John Hay SEZ) that it leased from the Bases Conversion and Development Authority (BCDA).

The SC en banc granted the petition filed by the BCDA assailing the Court of Appeals (CA) rulings, which reversed the ruling of a regional trial court’s confirmation of the arbitral ruling.

Following the transformation of Camp John Hay into an SEZ, the lease and development of a 247-hectare portion was awarded to the corporation.

BCDA then entered into a lease agreement with the corporation and its lessees for the use, management, and operation of the leased property. 

Under the agreement, the BCDA shall remain as the owner of the leased property while the corporation shall own the improvements it will introduce. At the end of the agreement, the corporation is obligated to transfer the ownership of the improvements to the BCDA.

Following disputes on respective obligations under the agreement, the corporation filed a complaint in arbitration against the BCDA with the Philippine Dispute Resolution Center, Inc. (PDRCI). 

In its ruling, the PDRCI found that both parties were guilty of breaches of their obligations under the agreement and ordered mutual restitution. It ordered the corporation to return the leased property and improvement to the BCDA while the BCDA was ordered to refund the corporation.

When the order became final and executory, the RTC issued a writ of execution and ordered the corporation and its sub-lessees to vacate the property. 

For its part, the corporation filed an omnibus motion for the notice to vacate to be enforced only on itself and not on its sub-lessees.

Before the RTC could rule on the motion, the corporation then filed a petition for certiorari and prohibition before the CA. 

For its part, the Supreme Court said that the petition filed before the CA was premature.

“By granting [the] petitions for certiorari and prohibition, the CA, in effect, already ruled on the merits of the proceedings still pending before the RTC,” it said.

Further, the High Court found that the CA failed to abide by the rules of arbitration when it rendered the rulings. The SC said the CA also modified the final award.

“In requiring the BCDA to fulfill the conditions outside of the Final Award, the CA made its own findings of fact and provided its own legal interpretation of the parties’ obligations. This is clearly beyond the power of the CA,” the SC said.

“As the RTC did not commit grave abuse of discretion in issuing the Order confirming the Final Award, the CA rulings modifying the Final Award are invalid,” it added.

The Court also denied the petition for certiorari filed by the corporation that challenged the ruling of the Commission on Audit for dismissing its money claim arising from the arbitral ruling.

GMA News Online has sought comment from CJH but has yet to receive a response as of posting time.—LDF, GMA Integrated News