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John Hay firm asked to post P736-m bond

By Manila Standard Today | Posted on July 23, 2012 | 12:01am

The Bases Conversion and Development Authority welcomed the decision of the Baguio Regional Trial Court ordering Camp John Hay Development Corp. to post a P736-million bond to put in effect the writ of preliminary injunction filed by the John Hay lessee.

With the order, the court rejected the P31-million offer made by CJHDevco to prevent a government takeover of its leased properties in John Hay, and upheld the original amount of the bond to protect government’s interest.

BCDA president and chief executive Arnel Paciano Casanova said the court order confirmed the validity of the arbitration clause in the contract and directed both parties to observe the provision. It did not touch on the merits of the case.

“The arbitration clause in our contract does not in any way impinge upon or prevent the BCDA from exercising its rights,” Casanova said.

He added there was nothing in the order of the court that said BCDA could not exercise remedies under the contract and existing laws.

Casanova said the same court order also directed CJHDevco to post a P736-million bond to avail of injunctive relief. Without that, there will be no injunctive relief that would be extended to CJHDevco, he said.

“What is clear is that this is not a victory for CJHDevco but a victory of BCDA because they are required to post a bond,” Casanova said. “Once CJHDevco posts the bond, it will demonstrate that they have the financial capability to pay its lease obligations.”

CJHDevco’s outstanding obligations to the government stood at P3 billion as of June 2012. Payment of the bond will contradict CJHDevco’s earlier claim that financial losses prevented it from settling its lease obligation.

“We are doubtful that CJHDevco will post the bond as it would likely betray itself,” Casanova said.

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