CA: Lapu-Lapu can’t stop reclamation deal

Lapu-Lapu City government is still prevented from withdrawing from a contract it entered with a developer of a reclamation project signed 20 years ago.

This after the Court of Appeals in Cebu has upheld the status quo order issued by the court that stopped the city from terminating its contract of reclamation and development with Asian Construction and Development Corp. (Asiakonstruct) or its assignee, Lapu-Lapu Holdings Corp.

On March 20, 1998, Asiakonstruct and the city government, represented by thenmayor Ernest Weigel, forged a contract for the reclamation and development of foreshore land along the Magellan Bay of Mactan Island.

A notice to proceed was issued by Weigel on March 30 of that same year.

To ensure its completion, Asiakonstruct assigned the contract of reclamation and development to Lapu-Lapu Holdings. This was approved by the city government on July 21, 1999.

However, in 2004, Lapu-Lapu City, through City Attorney Vincent Joseph Lim, wrote a letter to Asiakonstruct, stating that their contract had been mooted based on a Supreme Court decision entitled “Chavez V. PEA.”

Lapu-Lapu Holdings Corp., however, filed a petition for declaratory relief before the court against Lapu-Lapu City, claiming it has rights under the subject contract executed between the city and Asiakonstruct. On April 1, 2014, the trial court granted the issuance of a writ of preliminary injunction ordering the city, represented by Mayor Paz Radaza, from terminating the contract.

The city moved for reconsideration of the trial’s court order but was denied. Thus, it filed a petition before the appellate court.

But Associate Justice Pablito Perez of the CA 11th division, in his decision, denied the petition for certiorari filed by the city, citing lack of merit.

“Verily, Lapu-Lapu Holdings was able to sufficiently establish its contractual right to be preserved. If the injunction is lifted, there is a likelihood of irreparable harm considering that LapuLapu City made an award to Salug Valey of the same reclamation project,” read the 11-page decision.

The decision likewise stated that the status quo must be preserved until the merits of the case can be fully heard. The CA upheld the trial’s court ruling of the issuance of a writ of preliminary injunction.

“It likewise appears that there is a substantial controversy between the parties and one of them is committing an act or threatening the immediate commission of an act that will cause irreparable injury or destroy the status quo of the controversy before a full hearing can be had on the main case,” the decision read.