John Hay contract rescinded, not voided

(This is a continuation of our column last Friday, May 8, on the bullying by the BCDA of investors in Camp John Hay.)

INVESTORS, LOCATORS, homeowners and sublessees in Camp John Hay are being threatened with eviction by the Bases Conversion and Development Authority (BCDA) under Arnel Casanova if they do not sign an unjust, unethical and illegal deed of assignment, or pay, again, for the properties they already own. They wrote to President Aquino and to Baguio City Mayor Mauricio Domogan, asking for help. The latter answered that they are right in not signing the deed of assignment and that third-party subleases in the former American camp are valid and should be respected, Here are excerpts from the letter to President Aquino:

“Dear Mr. President:

“We, the Residents and Investors to homes/condominiums/businesses in Camp John Hay who have fully paid for our right to enjoy and stay in our properties in CJH until October 2046 and who have built houses there and who were never involved in the dispute between the BCDA and the Camp John Hay Development Corp. (CJH DevCo) to develop the former US Army Camp as a tourist destination, are sorry to trespass upon your valuable time to ask for your personal intervention and kind help to find a mutually acceptable way to resolve our problem with the BCDA, a government entity under the Office of the President.

“Mr. President, we are not demanding anything but rather we are asking for your help and for you to meet with (CJH’s) 1,600+ investors and homeowners at Malacañang at your earliest convenience in the interest of Justice and Fairness. We are innocent investors who responded to the call of the government to invest in its PPP project in Baguio and dealt in all good faith with the BCDA’s appointed private developer.

“On April 25, 2015, many of us were mortified, embarrassed and shocked to read a full page ad (in a newspaper) placed by BCDA, of a Notice to Vacate our fully paid homes without compensation which included our names and addresses. We bought our homes in good faith from the BCDA developer…. We are not a party to or involved in the dispute between

BCDA and its duly appointed developer…. We have, therefore, never been heard by any Arbitration Tribunal or Court. And yet, an office under your control and supervision (BCDA) has publicly demanded that we abandon our hard-earned investments in CJH and turn over our homes and properties to them without regard to our investments.”

(The letter then narrated the long dispute between the BCDA and CJH DevCo culminating in the decision of the arbitration tribunal ordering the BCDA to refund to CJH DevCo the P1.4-billion rent that the latter had paid, and for the developer to return the camp to the BCDA.)

“In meetings between the homeowners and the BCDA, the homeowners asked many questions and provided proof of ownership. In addition, some wrote letters asking (more) questions to the BCDA. We regret to inform you that we did not receive the courtesy of a reply. Instead we were collectively greeted with a paid advertisement announcing that the government is not going to honor our investments which we must now abandon. This notwithstanding our having dealt with the government’s duly appointed developer of Camp John Hay in good faith.

“The Arbitral Decision declares that both BCDA and CJH DevCo (violated the contract). How is it then that we, who dealt… with both in good faith as investors in CJH are now left holding the bag as the penalized party?…

“We thus seek your help, our beloved President, in getting replies and in mediating between the BCDA and us. Very simply, we only ask that the BCDA unconditionally honor and respect the terms under which we invested in Camp John Hay. We ask only that the BCDA allow us to enjoy the benefits of our having answered the government’s call for support of its premier PPP project in Baguio.

“And there is precedent for this in Clark Air Base where the BCDA respected the vested rights of the private investing public in Mimosa.”

(The letter then revealed the unfair terms of the deed of assignment that the BCDA is forcing them to sign. These were already discussed in the previous column.)

“Mr. President, we are hopeful and pray that you will not allow this situation to worsen in the hands of an investor-belligerent BCDA.”

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By the way, I heard over the radio BCDA chief Arnel Casanova claiming that he and the BCDA “won” in the case decided by the arbitration tribunal. That is false.

The tribunal declared the BCDA in breach of the contract and ordered it to refund the P1.4-billion rent that CJH DevCo had paid. In addition, the tribunal declared that the BCDA has no right to collect the P3 billion it was asking from the BCDA. Is that winning the case? On the contrary, he lost not only the case but also P4.4 billion that should have gone to the AFP Modernization Program.

I also want to clarify that the lease contract was “rescinded,” not “voided” by the arbitration tribunal. To “void” means it took no legal effect from the very beginning. But to “rescind” means it was valid in the beginning, then cancelled in the end and everything in-between are valid. Hence buyers in good faith are protected by law. Had the contract been “voided,” acts in-between would also have been void.