Caught in the crossfire

In April of last year, the Supreme Court upheld the arbitral ruling that ordered CJH Development Corp. (CJH DevCo) to vacate a portion of the John Hay Special Economic Zone it leased from the Bases Conversion Development Authority (BCDA).

- MARY ANN LL. REYES

The SC granted the petition for review on certiorari filed by BCDA assailing the Court of Appeal (CA)'s decision reversing the Regional Trial Court's confirmation of the arbitral ruling. It also denied the petition for certiorari filed by CJH DevCo challenging the Commission on Audit's dismissal of the company's money claim arising from the arbitral body's decision.

As explained by the High Tribunal, it all started when BCDA leased to CJH DevCo a 247-hectare portion of Camp John Hay. The lease agreement allowed CJH DevCo the use, management and operation of the leased property and to sublease the property to third persons.

CJH Devco later on complained that BCDA had not been complying with its obligations under the lease agreement so it filed against BCDA a complaint in arbitration with the Philippine Dispute Resolution Center Inc. (PDRCI), which found that both parties were guilty of breaching their obligations and thus, a mutual rescission was warranted. The PDRCI ordered the parties to revert their original position prior to the execution of the agreement "as far as practicable."

CJH DevCo was specifically ordered to return to BCDA the leased property and any improvements made thereon while BCDA was required to refund to CJH DevCo the rent which the latter had already paid amounting to P1.42 billion.