Gov’t can’t be that cruel HIDDEN AGENDA…

Just when many thought that any remaining uncertainty will be put to rest, a recent ruling of the Baguio City regional trial court may have added to the confusion.

Baguio RTC Judge Corazon Dulay-Archog has confirmed the Feb. 11 ruling the arbitral tribunal that voided the 1996 lease agreement between the Bases Conversion and Development Authority (BCDA) and developer Camp John Hay Development Corp. (CJHDevco) to develop the more than 200-hectare Camp John Hay property.

The order required CJHDevco to vacate the leased area and BCDA to reimburse the former around P1.42-billion in rents paid to the government.

But the original lease agreement allowed CJHDevco to enter into sub-leases and a number of agreements with businesses and individuals. There are those who bought hotel rooms and home lots for a lease period of 25 years, renewable for another 25 years.

Judge Archog said that “as to the list of sublessees (tenants) and/or vested rights holders, they will be governed by the law on obligations and contracts.”

Well, Book IV on Obligations and Contracts of the Civil Code of the Philippines consists of 1,114 articles (Arts. 11562270) and when you have a number of lawyers and parties trying to interpret what the court meant, there will be so many interpretations, a number of which will be conflicting.

CJHDevco beiieves that Archog’s order guarantees that subleases and other contracts are protected by law, and that they are not required to vacate Camp John Hay along with the developer.

The company cites Art. 1385 of the Civil Code which states that a contract’s rescission may not affect the object of the contract when it is legally in the possession of third persons who did not act in bad faith.

But then, BCDA has a different opinion. BCDA head Arnel Casanova said that a since a sublease is dependent on the original lease, when the mother lease is voided, so are the subcontracts.

Well, what may be said as definite at the moment is the fact that when the parties entered into their respective contracts of leases, they were in good faith. And so it would be very harsh and unfair, especially for government, to simply drive away businesses and individuals, who in good faith, invested and built.

Our country and the government are fast earning a

reputation of being unreliable when it comes to its promises. And that is bad for business.

Businesses want predictability and certainty. Their projections and plans are based on a number of assumptions, one of which is that any contract entered into with government or a sovereign and its agencies is “sacrosanct.”

In fact, no less than our Constitution provides for the non-impairment of contracts, which we know can yield only when there is a legitimate exercise by the State of its police power.

The government yields so much power, and so we have all these rights under the Bill of Rights of the Constitution to protect us from abuses by people who are supposed to protect us under the parens patriae (parent of the fatherland) principle.

One Asean country, which unfortunately has grown leaps and bounds in terms of attracting foreign investments, vowed to make its investment policy firm and sound. So what it did is to set aside funds so that any investor who may suffer from a change in policies as a result of a judicial decision can resort to this fund for some form of restitution or relief.

I have taught investment law for a number of years and I can say for a fact that our investment laws, policies and incentives are all over the place.

Our government has to speak with one voice. We need a president who can put his foot down and say with all conviction that this is were we want to go and this is how we will do it.

For comments, suggestions, and observations, e-mail at maryannreyesphilstar@gmail.com