Pre Execution Conference PDF

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Republic of the Philippines

Regional Trial Court
FirstZludicial Region
Branch 6
Baguio (::ity
CAMP JOHN HAY DEVELOPMENT

CORPORATION,
Petitioner,
- versus CIVIL CASE NO. 7651-R
BASES CONVERSION DEVELOPMENT

AUTHORITY,
Respondent,
x x
TRANSCRIPT
of the Stenographic Notes
taken During the Pre-Execution in the
above-entitled case on April 17, 2015
at 2:30 o'clock in the afternoon
PRESENT:
Hon. Cecilia Corazon D. Archog Presiding Judge
Atty. Linda Montes-Loloy Clerk of Court VI/
Ex-Officio Sheriff
Venus Pagel Legal Researcher
Jean Gonzales Stenographer HI
Venus Sa ,lid Stenographer ill
CAMP JOHN HAY DEV. CO.:
Atty. Gilbert Reyes
Atty. Dino Tamayo
Atty. Justin Mendoza
Atty. Ferdinand T. Santos
Mr. Alfredo Yrtiquez
BASES CONVERSION DEV. AUTHORITY:

Atty. Eloysa G. Sicarn
Atty. Love Joy Cecilia C. Brillantes
Atty. Daryl C. Aldana
Atty. Peter Paul r Flores
Atty. Michelle Regala-Niebres
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VENUS PAGEL:
Civil Case No. 7651-R for Pre-execution conference.
JUDGE CECILIA CORAZON D. ARCHOG:

Alright, for the pre-execution conference, it was suggested
that the Judge should be involved. It should have only
been the Ex-Officio Sheriff. From both parties, I like to ask
first the petitioner, how do you intend to... what are your
suggestions?
ATTY. GILBERT REYES:

Your Honor, in so far as the petitioner is concerned, the
order to vacate maybe implemented. Your Honor, it's too
hard for us almost seven (7) hectares, for the most part,
act of vacating will be symbolic, our only concern right
now, your Honor, is that, as intimated in the order of the
Court, with. respect to third parties, their rights ought to be
respected as per the rules on obligations and contract,
your Honor.
COURT:
Third parties! Are there third parties involved?

There are, your Honor.
COURT:
That is the claim of the petitioner. Okay, one by one.
BCDA you respond.
,
ATTY. ELOYSA G. SlCAM:

May we know first the word symbolic?
COURT:
Yes, what do you. mean by symbolic turnover?

As we intimated to the court the previous hearing, it simply
involves the withdrawal of all the security personnel of
/AY
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Camp John Hay Development Company, the vacation of

the offices presently pccupied within the leased premises
by administrative sales marketing personnel, they will
gather and walk out of the camp.
/wry. ELOYSA G. SICAM:

The judgment, your Honor, is for the turnover of all new
constru.ction. and permanent improvements in the camp
during the term of the lease. So we don't see how, just
removing the security personnel, marching out of the
people in the offices leav?ng would be a turn-over of
possession. The buildings as enumerated in fact in. Annex
"G" orthe petitioner, these are the improvements or
constructions that are subject of the lease.
COURT:
Wait.
ATTY. ELOYSA G. SICAM:

Yes, your Honor.
COURT:
So, the order is to literally vacate?

Yes, your Honor,
COURT;
It's for the respondent.
ATTY. ELOYSA G. SWAM:

Yes, your Honor.
COURT-
Maybe we should identify .first the third parties being
claimed or being mentioned by the petitioner. Who are
your third parties?
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AT'TY. GILBERT REYES:

Your Honor, in here ; as Annexed to the petition for
confirmation. of judgment we submitted a comprehensive
list, attached to the petition as Annex "G".
COURT:
Alright, para maklaro ha!, the Order of the court clearly
said, the rights and obligations will be governed by the
law on obligations and contract. So, what is the contract
that brought these third parties to the scenario?
A7"111. GILBERT RE YES:

Principally, your Honor, the characteristic of the contract is
a sub-lease.
COURT:
Sub-lease, so, that is clear, that the contract is a sub-
lease. So the third parties as listed in Annex "G", these
vested right holders and sub-lessees are governed by sub-
lease contracts.
A7TY. GILBERT REYES:

Your Honor, actually as regards them, the operative one,
since the contract, the principal contract between the
parties was the original lease agreement which the
Arbitral Tribunal ordered rescinded and ordered that
effected the rn.utual restitution, the rules on obligations
and contract applicable will be 1385. Article 1385 which
expressly excludes properties in. the possession of third
parties. They are not to be covered by mutual restitution.
COURT:
That is what petitioner's position is? How about the
respondent?

Our position is that, this is included in the lease
agreement. The original lease agreement of 1996 includes
all their certain. properties included in the lease agreement.
And the lease agreement also covers all the subsequent or
new improvements or permanent constructions built during
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the term 'of the lease. That is the whole point, your Honor
of the lease.
The government would lease that 247 hectare property to

the petitioner. In turn, they are supposed to pay rent for
_,the use and development. And at the end of the term of
the lease, all of these improvements will revert back to the
government. That's the term of the lease. And then with
the decision of the Arbitral Tribunal, they said mutual
restitution, all the properties, all the improvements go back
to the government including all new improvement and
constructions. And then, there is a payment of the rentals
that they paid. And since it's a sub-lease, it is governed
by the civil code provision on sub-lease as well as the
jurisprudence that the Supreme Court has laid down on
sub-lease, which is that, sub-lessees derive their rights
from the lessee. So that, any judgment of eviction against
the lessee is binding on the sub-lessees. So that they also,
must turn-over the possession. to the respondent, your
Honor.
COURT:
So how could that be symbolic? How could the order of
the Arbitral Tribunal directing the petitioner to vacate,
how can that be complied symbolically?
A7TYY. GILBERT REYES:

Well, your Honor; in so _far as the properties that are
occupied right now by third parties, . as we have
mentioned, that's excluded under Article 7385. And
therefore, it is deemed vacated when the rest of the leased
premises which have not been developed and are
essentially either in the managed forest area or in the
areas that are developable under the Master Development
Plan. So when we withdraw from these, including security
and administrative personnel, leaving only those that are
occupied by third parties who bought or invested in these
properties with the consent of the .BCDA, then the
judgment to vacate has been complied with. effectively.
A7TY. ELOYSA G. SICAM:

But your Honor, it's really sub-lease and that is the whole
purpose of the lease. Whatever they had developed,
whatever was put-up there, that's supposed to go back to
the government at the end of the lease. Arid now, that the
/At
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lease has been terminated, it is supposed to go back to the

government. And this was not, it should have been raised
in. the Arbitration. proceedings and that was your position,
and that it's not. It's very clear your Honor in the decision,
that all new improvements arid constructions during the
term of the lease.
COURT:
Taking for granted, that is the correct interpretation, the
interpretation of the respondent. So what would you do
with the existing tenants?

Your Honor, the possession will go to the government, to
the State, so the possession will be with BCDA.
COURT:
How about the existing operations? You mean, if the writ
will be implemented, all operations inside Camp John. Hay
would stop?
ELOYSA G. SICAM:
it would be managed by BCDA and John Hay
.Management Corporation, your . Honor.
COURT:
You take over the operation?
A TTY. ELOYSA G. SICAM:

Yes, your Honor.

How about the third parties?
ATTY. P. 3LOYSA 0. SICAM:

No, those buildings_ the third parties, they paid money to
petitioner in order to stay in those places, right? So in
order to stay, like the cottages they bought from the
petitioner, so now, if the petitioner who's liable to them
under the civil code and as interpreted by the Supreme
Adu
Court because, there is no privity of contracts between the
BCDA and these .ub-lessees, your Honor. So the
possession of everything, all the new improvements will go
back or revert to BCDA. BCDA and john Hay
ligancigernent will manage operations and if the third
parties wish to talk to BCDA about remaining or to
continue in the continuation of staying, they can.. do so. It's
possession supposed to be with BCDA now, the BCDA will
take care grit.
ATTY. GILBERT .REYES:

Your Honor, we would just like to call the attention here
that in. so far as the amount and investments paid by
these third parties who acted upon the consent of the
BCDA to invest in Camp John Hay, the ruling of the
tribunal is also very illustrative. The tribunal said, the
monies and benefits, these are payments made by third
parties already received by complainant will compensate it
for whatever interest maybe due from respondent's used
of complainant's money. That means, in so far as the
money of the investing public is concerned, "ang
nagbenefit po doon", would be BCDA. Because the
tribunal declared that it is the way it is. And in turn, the
improvements that were built at the cost of the developer,
the petitioner in this case need not be reimbursed, since
we're both in good faith, the rule on. leases means that we
should have been reimbursed. The tribunal said, no more,
that will now be applied towards the payment of
reasonable rental for the 18 years when the lease has
been in actual legal operation. So the third parties all here
dealt during that period when. the lease agreement was in.
full force and effect.
COURT:
Here, we have to consider here that the third parties that
you are referring to, were brought into the situation
because of the sub-lease that they entered with the
petitioner.

With the consent of the BCDA, your Honor, our contracts
for those developments specifically properties
intended for sub-lease. Actually ., in the master
development plan, that was a developmental obligation.
AA/
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It's not like we could have complied with. the lease

agreement without making those and selling.,.
COURT:
The problem here is, in the dispositive portion of the award
it's your problem. because it's not the Court that heard this
case, it said, all improvements. It did not say, except, it
did not make a specific exception on those that are being
held by sub-lessees or vested right holders. "Iliala."
ATTY. GILBERT RE YES:

It didn't say your Honor, as far as practicable, we believe
that is precisely the situation. When there is an operative
fact that takes place while the lease agreement of both
parties involving third parties who dealt, with both in good
faith. Those transactions have to be respected, your
Honor. It's not .just as simple as saying, that they are not
parties to the arbitration, • because they did deal at the
instance of both. parties. This is not just Camp John Hay
asking the public to invest. The whole purpose of the PBB
was for both the government and the public to entice
investment in Camp John Hay and Baguio City, and that
is what happened, these people invested. And according
to the decision, that investment was used by BCDA to pay
its obligation, to pay as interest. So it seems to us your
Honor, that it would be unfair if now that they will
contend, that unless separate and new agreements are
entered into with BCDA, they will be evicted.
ATTY. ELOY SA G. SICAM:

Your Honor, if I may, there also we should not forget, that
under the lease agreement, petitioner was also supposed
to pay BCDA rentals for the use in staying there. So it's
not true that B(.7.7DA made all these money from petitioners
for their development. in fact, they, our claim before the
arbitration was P3.4 billion in. back rentals, which was
denied by the Arbitrai Tribunal. So it was, return all the
new improvements and the constructions and then in turn,
just return. rentals and no back 'rentals. So, it's not true
that they are saying that BCDA made a. lot of money on
that, because in truth, it is the

I did not say that your Honor.
t4iA
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.ATTY. ELOYSA G. SICA M:

You said that the public invested in the camp and then
that would benefit now BCDA. But the thing is, it's not the
entire obligation that they paid, they actually owed the
back rentals of P3.4 billion.
ATTY. GILBERT .REYES:

Anyway, what I'm quoting is in the judgment award,
maybe the court can just try'to appreciate...
COURT:
You know, the court has already made a position. It is not
for this court to interpret what is not stated in the
dispositive portion. At this point of the proceedings, what
the Court did, and in fact did, was to confirm but it
appears that you have different interpretations,
interpreting what is not stated in the dispositive portion,
ATTYY. GILBERT REYES:

Only, your Honor, with respect to how it affects third
parties, because what seems to have escaped the clear
attention here, your Honor is that, the public is also in
good faith. The BCDA and GM Dev. Co. are part of that
submission and as in the order of the Court, both in good
faith. Now the third parties are also in good faith. Just
like the two other parties, BCDA and Camp John Hay Dev.
Co., if they can be evicted, as if under the law, they were
not in good faith, that they are in bad faith and therefore
can be evicted. Because all the citations and
jurisprudence on the matter of sub-lease, these relates to
cases where the lessor is innocent. In this case, that's not
the case. That is why the execution here is .sui generic.
The lessee and the lessor were both declared as having

breached. Unlike in the cases cited, the lessor was
essentially innocent and was only asking that the bad
faith. or breach of the lessee be visited upon the sub-
lessee. That's not the situation here, your Honor, because,
otherwise, a party who is in good faith, just like the John.
Hay and BCDA will be the one penalized for the breaches
of both parties. Your Honor, its not just only CIJH Dev.
Co., which u.)as found to be in. breach.. The BCDA itself
was found to be in breach. So it cannot pretend to be
Ace
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an innocent or a victim, because in this particular case, we

are just trying to contend and in balance interest of the
parties
COURT:
So, let us clarify. The position of the petitioner is that, the
areas to be vacated will exempt those that are being held
by third parties referring to the vested right holders, as
enumerated under Annex "G''. So that's the position of the
petitioner. Respondent's position is everything.

lf we were to _follow, your Honor, their interpretation, then,
nothing will go to BCDA. There's no new improvement or
construction that will go to .BCDA. And that is totally
contrary to the letter and the spirit of the decision of the
Arbitral Tribunal.

If title passes it on, then. it is different, that's 247 hectares,
your Honor. We had been paying rentals, the improvement
was used to pay not just on the structure that were built,
but on the entire 247 hectares. So the statement of the
tribunal that the improvements made by the complainant
on the properly will compensate the respondent from
complainant's use of the leased property in the meantime,
actually relates to everything and that is why we argue
that in. the solomonic solution of the Tribunal whether we
will agree it or not, your Honor, is quite different matter,
is simply that one set of assets off sets a liability, because
of the nature of the mutual breach. fin.ding of the Tribunal.
COURT:
That's your interpretation, but the Court does not agree
also with your interpretation.
,9 TTY. ELOYSA G. SICAM:

May we know from the petitioner your Honor, under their
interpretation, what particular improvements are they
going to turn over to BCDA? Which one, may we know?
Which ones, may we know? In your Annex aG' which one
are you turning over?
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/41 TTY, GILBERT RE YES:

Subject to the third party leases, the manor, the lodge, the
cabins, because it's in the possession of the third
parties....
COU R7
The Court would like to be clarified. So if Annex 'Cr is
excluded, what improvements ., %to" (The Judge pin-
pointed the map prepared by Berm) what is being
referred to then in the finaraward as the leased property.
Does that not refer to the 247 hectares? And what are the
improvements here that are included then.?

Other than the condolels and the houses, the roads.
COURT-
clarify that, but as far as the award states, it did not
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say so, that this Annex 'KG' should be excluded. Why did
you not bring that out in. the Arbitral Tribunal?
A ivy GILBERT RE YES:

Your Honor, because precisely, the nature of arbitration is
purely consensual. We had actually raised that. But the
response of the Arbitral panel was that, they are not
patties to the Arbitration Clause, which is between BCDA
and Cifl Dev. Co., l suspect your Honor, that is the
essential reason why they actually because it entered
into our discussions during the presentation of evidence
and in the argumentation in the memorials. That was a
matter that WC'S raised. But we are now estopped, we are
confronted with and we so nor end ... with the Court's
situation right now, because, while we would have
wanted the Tribunal to say something about the nature of
the tribunals jurisdiction, what it. says, no one can change
it, we cannot even ask for a consideration or clarification.
ATTY. ELOYSA 0. SICAM:

.And. it is stated, all new improvements and all permanent
improvements.
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ATTY, GILBERT REYES:

As ,far as practicable, „that's what it says, that what they
told us.
ATTY..ELOYSA G. SICAM:
It did not say, except, for so and so.

As far as practicable.
ATTY. ELOYSA G. SlCAM:

That is their interpretation, your Honor. But if under that
scenario that they are saying, nothing is going to be
turned-over. We have your Honor, we prepared a map,
based on their Annex 'Cr" of the camp. If petitioner may
point out, which ones, which parts here they will be
turned-over to BCDA under your interpretation.,

Yes, okay, everything in green, So that's more than 90%,
"lahat yann. (Atty. Gilbert Reyes, pin pointed in the
map of the the portion of the properties to be turned-
over to BCDAJ.
This is the part of the leased area. Now the exclusions

would be the Clubhouse. The golf course was a
requirement under the Master Development Plan. We have
no choice about that. We were told to develop that and
sell securities, that is what the BCDA wanted. That's not
what we wanted. The BMA made a lease stipulation that
the golf course has to re-develop and sold securities and
so that's all we did. So the only thing left there, is plain
rights, that's it, exclusive plain. rights. So with. respect to
those that were sold to in.dividuals or corporations, those
were those that are highlighted here that now bear either
houses or in , the case of the manor and the lodge ; these
are hotel complexes. The other areas are actually just
conunercial short term bases. These are not long term
basis, the Mile High and the small other commercial
establishments within and the Ayala area bore the
consent of the BCDA expressly and so with the Gerry. So
that mean* the Ayala was sub-leased with your consent.
So we're turning that over to. The Gerry areas were also
consented to by BCDA.
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COURT:
Let's clarify. So, according to the petitioner, what will be
vacated or turned-over are the green portions in the map?

Yes, your Honor, more than 240 hectares.
ATTY. ELOYSA. G. SICAM:

That was the land, excluding the improvements and
construction.
ATTY. GILBERT SICAM:

And then, with respect to the improvement, they will be,
they are actually transferred to you subject to the vested
rights of the third parties who dealt, who were also in
good faith.
COURT:
Supposedly we are exploring ways and means here,
cannot .BCDA. just continue with the contracts that the
existing vested holders had already entered into?
ATTY. ELOYSA G. SWAM:

Our problem there, is, some of the sub-lessees, they
already paid for the whole thing in advance up front. For
example, a cottage, they paid P7 million. And that was
already paid to petitioner. So if we let • that person stay, it
won't be in good and tenantable condition anymore. We
cannot do anything with. that building or that cottage
anymore, because they already paid the money up front to
petitioner. In fact, what we are saying under the Supreme
Court rulings on sub-leases. It is right if you say, the
lessor and the lessee, that contract is different from the
contract of the lessee and the sub-lessor. If you're saying
that the lessor was in. had faith., it is only the lessee that
can. recover from. the lessor. And then, whatever the
lessee recouers from the lessor, that's where the sub-
lessees will get whatever damages, you know....
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COURT:
Did not the Arbitral Tribunal say that since both were in
bad faith, the bad faith of each other cancelled each
other's bad faith? So, both parties now are to be treated
as in good faith. So there's no bad faith.

Yes, so that's why they have to return, to us all the new
improvements, all the constructions and we just return to
them the rentals. But because it is a sub-lease, the sub-
lessee's right derives from the right of the lessee. Now the
lessee no longer has any right to stay on the property,
because according to the award, they have to vacate
including all new constructions and permanent
improvements. Your Honor, the BCDA is willing to talk to
the individual sub-lessees. a
COURT:
About, what?
ATM ELOYSA 0. SICAM:

About, they'll stay or not. That is already on a case to
case basis between those third persons and BCDA. We
are open. In fact, even before the decision came out, there
were notices in the newspaper, saying that anyone who
wants to be clarified or who wants information can talk to
BCDA. That's why, we are notifying the public that there
was a pending dispute between Dev Co and BCDA.
Precisely, to tell them that something is happening. So, we
have no problem, your Honor, about talking one on one
with the individual sub-lessees. But for petitioner to
impose on us, that these contracts are in violate, that is
not acceptable to BCDA, because otherwise, it is an empty
decision and empty award, we cannot use that property
anymore because they already paid up front. Nothing will
be paid to BCDA anymore.
Am. GILBERT REYES:

Only for the time being, your Honor. The advanced leased
that my Companera was referring to was paid by the
investors when they came in. The one who took that
advanced leased was actually BCDA, because that money
was used to pay for their obligation to pay interest under
Ate 214.t.
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the judgment award, therefore, they benefitted from these

so called advance leases of the individual locators. "Yon
po ang sabi, matinaw na.man All monies and benefits
already received by complainant will compensate it for
whatever interest may be due from the respondent's use of
_the complainant's money. Your Honor, its seems to us...
COURT:
What interest?

Interest on the money, because the money they deal is
P 1.4 billion.
.
COURT:
On the amount that will be returned?

Instead of paying interest, the Tribunal's resolution. was
don't pay interest anymore. And the monies and benefits
you received from the public compensates you for that.
Now BCDA is saying, no we want to get rid of that
because these lessees did not pay.
ATTY. ELOYSA G SICAM:

No, no, no, no, no,
TTY GILBERT RE2YES:

It precisely benefitted BCDA. It discharge their maybe...
'just wait until I finish paftera." So it is used to
discharge the obligation to pay interest. On our part, we
lost the right to get reimbursement for the improvements,
the actual cost of the improvements, your Honor, so good
faith, the third parties, sought to be disenfranchised were
also in good faith. Since sudden decision declared BCDA
and Camp John Hay in good faith, this is something that
has to be recognized. And then, the third parties are they
in good faith or in bad faith? They were also in good faith.
So, no one in bad faith here, your Honor, no none,
including the third parties.
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ATTY. ELOYSA G. SICA M:

Your Honor, may I say also in that portion which counsel
Reyes is saying.
ATTY. DINO TAMAYO;

I just want to add something your Honor. If BCDA says
that the sub-lessee should run after CJH Dev. Co. then this
particular sentence in the decision, saying that, the monies
and benefits already received by CM Dev. Co. Will
compensate it for whatever interest may due for. BCDA's
use of the money will be diluted and ..„
COURT:
You were saying, wait, wait.
ATTY. DINO TAMAYO:

Because now, "yang nakuha ng Dev. Co., dapat na
interest, kailangan pang -ibalik".
COURT:
Was the tribunal made aware that there were
constructions, there were sub-lessees?

Yes, your Honor.
COURT:
They are aware that there are sub-lessees?
.ATTY. GILBERT REYES:

Yes, your Honor.
COURT:
Did you also filrnish the Tribunal 9f the list contained in
your Annex "G"?

No, your Honor.
17
ti
No, your Honor.

But your Honor, another thing of BCDA knowing about
these people, CJEIMC asked them before, may we have
copies of the contracts of these people who you're sub-
leasing , so that we may know and they refused to give us
copies of the contracts. They said it's confidential. So,
some of these in. fact surprised to C.IH and these are the
names that are appearing, that's not entirely true.
COURT:
At this point in time, can you give the BCDA the contracts
of Annex "G"?
ATTY. GILBERT' REYES:

That will be explained...

That's alright.
COURT:
Yes. Because, that would be the basis of their rights.

Yes, your Honor, during the Arbitration. proceedings, they
obtained copies, the BCDA.
ATTY. ELOYSA SICAM:

Not cr ll.
ATTY GILBERT REYES:

Which one don't you have?
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Then it says, not all qk these are here and cannot be used
in other proceedings, so that is their condition, your Honor.
COURT:
Petitioner is saying, that you obtained copies of some of
the contracts. Maybe you could check, you could counter
check that with. Annex "G"

We have the list, not all were given to us. And there was a
provision that we cannot use those documents outside the
PDRCI. That's why if they want to waive that
confidentiality of everything that we got in PDRCI, then we
can use it.
COURT:
We will use it for execution proceedings only.
ATTY ,. GILBERT REYES:

For this Court, yes. For no other purposes if you want to
use it, and no other purpose, because we have to ask
individual buyers and investors' consent. This one protects
their interest, so it's in. the nature of self-help for them.
COURT:
So, what are you turning-over? The roads, the paved
roads...
A'TTY GILBERT REYES:

Electricity, the water, water lines, sanitary lines...
AIT'Y. ELOYSA G. SICAM:

No, no, that's nothing. it says your Honor, may I read on
the last, page 267, it also said, the monies and benefits
already received by complainant will compensate it for
whatever interest maybe due to respondent's use of
complainant's money. But the last sentences, the
improvements made by complainant on. the property will
compensate respondent for complainant's used of the
leased property in. the meantime. So that use was from
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1996, your Honor. And then, out of that period, the only
paid about P1 .4 billion in rent and they still owed P3.4.
So, if what's gonna. be turned over to the government is
only the road, the green parks, that is not compensating
the government for the use of these 247 hectare property.

Title passes to you now. Let's not confused, yong
benefits...
ATTY. ELOYSA S1CAM:

As to that, may .1 say your Honor. This one, it's the ones
with privity of contracts is the lessor and the lessee, BCDA
and petitioner. And it's clear that a judgment of eviction
against the lessee affects his sub-lessee. So, if the lessee
is the one in bad faith towards his sub-lessee or if its at
fault, not necessarily in. bad faith, then the sub-lessee will
recover the damage from the lessee. That is the ruling of
the Supreme Court. It does not dilute from this, but that is
precisely the purpose. The Supreme Court said, a
judgment of eviction against a lessee affects his sub-
.
lessee, even if the latter are not sued in the ejectment

case. This is so, because a sub-lessee can invoke no right
superior to that a sub-lessor. The moment the later is duly
ousted from. the premises, the former has no leg to stand
on.. The sub-lessee's right if any, is to demand reparation
for damages from his sub-lessor should the latter be at
fault, When we say at fault, it's toward the sub-lessee not
.
the lessor. The sub-lessees can only assert such right of

possession. as could have been granted them by their sub-
lessor. The right of possession depending entirely upon
that of the latter and any damages that the lessee gets
from the sub-lessor, that is where the sub-lessees will get
their reparation, your Honor.
COURT:
Without taking sides. if' l were to go with your line of
reasoning, the rights of the third parties will be respected
without necessarily agreeing with. you. So, how do you
See this to be implemented? So, what will happen to the
third parties? They will continue to stay in Camp John
Hay and under what terms and conditions will they
continue to stay in, John. Hay? Since this contract of lease
between BCDA and petitioner already rescinded. TI-Lere
20
is no lease contract anymore to talk about. So what are

they?

Under the terms of the sub-lease..
COURT:
What are these persons?

Your Honor, basically under the original terms upon which
they invested at both the BCDA and CJH Dev. Co.
Instigation.. So, when these came in, they signed the
agreements with the consent of the BCDA, so they should
be allowed to stay only for that period only. And this is
not only without precedent.
COURT:
What period are we...

2046.
COURT:
Until 2046.
A7'7'Y. GILBERT REYES:

Yes your Honor. And this is not without precedent.
COURT:
Tey will not pay any more lease?
Arry GILBERT REYES:

Yes, your Honor, because actually their money was used
to pay the rent, the interest obligation of the BCDA.
COURT:
The court is just clarifying.
21
A'ITY. GILBERT REYES:

Yes, your Honor.
COURT:
The court is just clarifying, proposals, interpretations of
both parties, so they will be there as what?

Your Honor, as continuing sub-lessee, occupants.
COURT
Sub-lessee, of what?

BCDA your Honor.
COURT:
So, BCDA will now be the lessor?

Yes, your Honor.
COURT:
And they will be the lessee, whose term of lease will
expire in 2046?

Yes your Honor. not without precedent, your Honor. The
BCDA did the same in Mimosa, so that was actually what
happened. BCDA took over but they respected.
COURT:
At any rate, you were saying that you can deal with the
individual sub-lessees on. a case to case basis.
22
ATTY. ELOYSA SICAM:

Yes, your Honor.
COURT:
So there is a possibility, maybe„.
A7TY. ELOYSA
Your .Honor,. after possession has been restored. After the
service of the Writs, after the Writs has been served on
them. We can talk to the slib-lessees on a case to case
basis.

Why should the Writ be served on them, they're not ...
ATTY. .ELOYSA G. SICA.M:

Because they are sub-lessees. your Honor.

No, we need to be consistent, whether they are party or
not. If they're not, why they should be served with the
Writ of Execution?
COURT
We all agree that they are there, because of a sub-lease
agreement with petitioner. That is the only thing clear
here.
A7TY. GILBERT REY ES:

Yes your Honor.
COURT:
Annex "G", the listings in Annex "G". Their possession is
by virtue of a sub-lease agreement with petitioner. The
positions of both parties are opposed to each other. I
thought, we would be talking about how to execute the
Writ on at least a peacefizI manner. But, if that is the
interpretation. of the petitioner and the interpretation
likewise of respondent is different, the court will just
Atria
23
adhere to the wordings of the award as is. If you have

separate interpretatleris, the court cannot interpret it.
ATTY. FERDINAND SANTOS:

Your Honor, may 1 speak
COURT:
Yes.
ATTY. FERDINAND SANTOS:.

Your Honor, actually, the past few days, there were big
efforts to find a solution. to this without even having
consulting to the implementation of th.e Writ of Execution.
Maybe, if parties can still be given a .few days to continue
these dialogues and talks, so that if possible they can still
try to find the solution...
COURT:
Why don't you involve if the Court will grant you. And
if the court will withhold first the implementation of the
Writ, why don't you involve those listed sub-lessees?

They are approximately 1,600 your Honor, it will be
chaotic.

And also regarding the Writ, the suggestion about few
days, if that is the position and definitely, there's nothing
to talk about on our side, your Honor.
COURT:
Okay, on the matter of the amount that BCDA is directed
to return, the court would like to know if, you have that
aniourit ready?
ATTY. ELOYSA G. S1CAM:

Yes we have the money ready your Honor. Because in
fact ... out of the GOCC's remittance to the government,
BCDA is number 5, the amount of dividends turned-over
24
to the National Treasury. BCDA has that money, your

Honor. ti
ATTY. PETER PAUL FLORb.,'S:

_Your Honor, the BCDA present Head directed our Finance
to even set upon us to our account to make sure....
A.rry. E.LOYSA G. SICAM:

For payment, to pay the judgment, to pay what is stated.
Our concern only is the Supreme Court Circular A.M. No.
10-2000. The money is there. This is in compliance with
the requisites. There's just that the government auditing
law, PD No. 1445, about COA 's approval. But the money is
there. We can, the Honorable Court, in. the Writ stated
that .BCDA can choose which property or account will be
used by the Sheriff.
COURT:
May I know how can you obtain a LOA approval?
ATTY. ELOYSA G. SICAM•

It's actually the petitioner that has to obtain. it, it's the
claimant, all money claims against the Government must
be filed with the Commission on Audit which must act
upon it within 60 days. It• the claimant, your Honor. But
the money is there.
A TTY. GILBERT REYES:

I■lo, you are the one who will obtain, it. The obligation is
going to pay, so you have to get those requisite approvals
to make the payment valid. Otherwise, you will just pass
it on...
ELOYSA G. S1CAM:
Actually, it's just an. administrative thing.
Am'. GILBERT REYES:

We are not government, you're the only one who will act..
kte7u4,
25

Under PD No. 1445, itys the claimant, so that is the law.

We will join you and assist you, but please take the
initiative to make your payment possible.

We can help you but its still be...

Your Honor, if that PD is not applicable, because since
then. the the abitrat law has taken effect. In the arbitral
law, no one can. change the decision. Not even the courts,
and therefore not even COA.

Well the law is written into every agreement...

Law versus law, 1 mean that is basically...
COURT:
At any rate, this is an .Administrative Circular that only
directs the parties.
ATTY. ELOYSA C. SICAM:

We're just raising it, we're just pointing it now, we're
telling the court, that the money is there and we can set it
aside. I'm sorry, it has been set aside for payment.
COURT:
it has been set aside. What petitioner's saying is, you
help them. You help each. other.
.4 TTY. GILBERT REYES:

We will help them, your Honor. I suppose, there's no
serious disagreement
21
COI1RT:
It's serious, because it's a money claim against the
government.
ATTY ELOYSA SICAM:

It's P1.4 billion pesos, its money.
COURT:
Does it come under contemplation of money claim when it
is judgment to return? It's not an award?

But its payment of money claim.

It's not applicable your Honor, plus it arises from
arbitration. which is always final.
COURT:
Maybe you have to look into that? Will it be possible for
the Court to direct the deposit of the amount in. the court's
custody?
ATTY. ELOYSA SWAM:

It will be the escrow account in the name of the court. Yes,
your Honor.
COURT:
So that it will be the court that will release it to the
petitioner when. there is compliance with everything?
ATTY. LINDA MONTES-LOLOY:

Considering that there is an. Administrative Circular, then,
1 think it will be exempted ,from government commission.

Your Honor, whether escrow or deposited with the Court,
our only reservation. then. is that for as long as until it has
/At'
27
actually in hand, it's not paid, so it may be an. escrow in

the funds undeniably available, but as long as it has not
yet been paid the judgment obligation has not been
discharged.
COURT:
That will be the work of the Sheriff.
A7TY. ELOYSA G. SICAM•

Yes, your Honor, it's the Sheriffs work, We were only
answering the court's question if the money is there.
COURT:
The reason why the court suggested that is to allay fears
that maybe the BCDA does not have that amount.
ATTY. ELOYSA. G. SiCA.M:

We do„.
COURT:
So if indeed there is an amount, then there should be proof
and if it is deposited in the Court, then at least it will be
easier for the sheriff to make payments when required.
YOu coordinate with them because its the sheriff who will
implement it just the same.' Anymore?
ATTY. .ELOYSA G. SWAM":

May we see the Writ? is the Writ of Execution.... it's there?
We have a question about the fees, the execution fees,
because in this part of the Writ, it says, you are also
commanded to demand .„ demand from the vacation and
demand from BCDA payment and then it says, together
with the twilit' fees for service of this writ of execution. In
this part, how come the petitioner has no fees assessed
against it?
COURT:
It does not involve money.
28

It's the entry fee.
COURT:
So who pays the entry fee?

Both, your Honor,

We have a question, your Honor._ And then anything
that has to d.o with the implementation your Honor, is that
to he discussed with.. theSheriff? Our concern also for
example in the manor and the suites, .BCDA has 26 units
which are subject of the Malversation case, they were fully
furnished to BCDA. So we're worried about it the term,
might be vandalism... 1 am just echoing .from experience of
our clients because also, BCDA occupies log homes in. the
Voice of America area, their electricity was cut during holy
week.

.Because they did not pay, they slwuld pay.... We gave
several notices.

It's actually an act of harassment, I think that is
unfair, it's from BCDA 's experience.
COU RT:
26 units?

26 units. They're identified. We know which ones, they're
fully filmished.
cot IRT•
YOu could as well padlock it.
29

So can we padlock it,,,your Honor?
MR. AL.PRE.D0 YNJQUEZ:

Your Honor, I wish to project something. The hotel units
were actually fully furnished, it is currently being used by
hotel .... and have been generating income.
ATTY. ELOYSA G. S1CAM:

Just to put my client at pjace, your Honor. May we at
least have people inspect it and at least take photos of the
interior and take inventories.
MR. ALFREDO YIVIQUEZ•

As a matter of fact your Honor, the BCDA has received
income, the rental ilicome for these units for the last couple
f years.

That is subject of the malversation case. What we're
talking about is...
COURT:
That shows how deep your distrust for each other is.
ATTY. .ELOYSA G. SICA

As the suggestion of the Court, we can padlock it.
COURT:
What was your agreement with...

There's a lease back, your Honor.

Because of the judgment of the Arbitral Tribunal.
A4,7
30
A7TY. GILBERT REYES:

The lease back is different. In fact the Dal said, it's valid.
You teased it back. Maw nga artg nag lease back e.
- ATTY. ELOYSA G. SICAM:

No.... what are you going to lease now?
A rry. GILBERT REYES:

Well, you lease it back so that you could earn and
participate in the revenues and you participated in it
regularly.
ATTY. ELOYSA SWAM:

But you did not pay the profit but that is different... we are
not going to deal with that anymore Your Honor. Just to
say that now there is an award, and we have units, we
are concerned about the integrity of the units and their
furnishings Your Honor.
MR. ALFREDO YIVIQUEO

Your Honor, from year 2008 until 2012, the BCDA has four
(4) board of directors in. our board and they availed of the
premises of the units Your Honor.
ATTY. .ELOYSA a SICAM:

Your Honor, we are now talking about 20.15„ we are
moving forward from the decision and now that there is an
order of execution, our concern is the integrity of those
units Your Honor.
COURT:
What the Court can only say is that, you came to court to
force you to enter into arbitration„ and then now that there
is an. arbitration„ award, you respect it because this is
what you wanted.

So Your Honor, the third party is kanya. kanya po. 13ahala
na ho.
/tte
31

It's the sheriff. It 's up for the sheriff.
COURT:
It is clear that they are there because of the sub-lease
agreement. If you would claim Article 1385, independent
of the provisions on sub-lease, I would not want to pre-
empt anything here. So the Court simply said, their rights
shall be governed by the laws on contract. Now it is clear
that what you are referring-to as contract is the sub-lease
contract. So it is the sub-lease contract that will govern.
The taws on. contracts pertaining to lease.
You were requesting for more time?

Yes Your Honor.
COURT:
How much time do you. need?
ATTY. FF,RDINAND SANTOS:

Until the end of next week Your Honor.
COURT:
So another week?

Yes Your Honor,
COURT:
What will you talk about?

The third parties Your Honor, we will possibly resolve....
2w, LI
32
COURT:
Lees not refer to them , as third parties. You refer to them
as sub-lessees.
ATTY.ELOYSA G. SICAM:
We will talk. to them individually. But we have nothing to
talk about, this is their position... there's nothing more to
talk about them, Your Honor.

You're declining the offer to talk?

We will talk to the sub-lessees on our own.
COURT:
Who heads the legal department of BCDA?
ATTY. ELOYSA G, SICAM:

Atty. Flores Your Honor.
COURT:
What is your thought on the matter? On the proposals?
Arry. GILBERT FLORES:

Well Your Honor, aside ,from what- we informed them
earlier, our problem is that, if we do not secure the full
execution, since they are public officers and they may be
if they do not secure the full execution of the order of
the court, they can be accused of being, of exercising
partiality of discretion. for which they may,...
COURT:
They are only asking for one (1) week.
ATTY. ELOYSA SICAM:

If their position is the same, it's their outline.
'11
33
COURT:
May be something wilt happen
ATTY. ELOYSA G. SICA M

-Your Honor, in fact what 1 have told them earlier is that
their posffion...,...if only to let them know and to tell them
that we have to comply with the decision of the court. And
in this, we have to comply with end of course, insofar as
to..... is concerned, its government instrumentality, that's
obligated to comply and to secure the compliance of the
decision of the Court.

Well Your Honor with regards to the of Atty. Flores
already and we were not left, that's why the execution
was made, we were not really left with the impression that
this is to say,...... as Atty. Sicarn seems to imply now.
ATTY. .ELOYSA G. S1CAM:

Based on. what Atty. Flores told me earlier also and after
talking with. my client extensively .prior to this pre-
execution Your Honor, we prepared this. We also thought
Your Honor, that it would be regarding the implementation
but if that is their position, there is nothing more really
Your Honor to talk about, but u.,e are grateful.
COURT:
Yes, the pre-execution would have been... the Court was
also expecting that we will be talking about... perhaps
executing it with.out necessarily telling the sheriff to be in
the premises.
ATTY. ELOYSA G. S1CA M:

If that is their interpretation of the way the Tribunal rule,
which is different from the dispositive portion then Your
Honor, there is really nothing left to talk about. Let the
Office of the Sheriff do its job.
ATTY . GILBERT REYES:

In that recourse, you continue to reject the right of the third
parties.
34
ATTY: .ELOYSA G. SICAM:

No, we do not reject them. That's not true.
ATTY GILBERT REYES:

Then may we know that you will not reject them?

No we will enforce the Court's Order. We're not saying
that, we're disregarding evdry word or say, we gonna talk
to them individually. We're not gonna talk to petitioner
anymore Your Honor, because really petitioner has nothing
to say anymore. We litigated since 1996 and then it has
been. litigated and finally arbitrated. We will talk to the
individual third parties but we will not talk to the
petitioner about it, because that's their position., Your
Honor.
COURT:
So you are still open?
ATTY. .ELOYSA G. SICAM:

To the third parties coming to us, yes.
COURT:
Directly coming to you?
A TTY. ELOYSA G. SICAM:

Yes Your Honor.
COURT:
Without directly passing through the petitioner?

Yes Your Honor. There is ,..MMC over here in. Baguio, they
can go to .BCDA 's head office and/or to the Court. Our
offices were open for the third parties but for petitioner, f
think there is nothing more to talk about Your Honor.
35
COURT:
It might also be a good idea, if you wouldn't want to
involve the petitioner on talks with. the sub lessees, it could
-
also be a good idea for BCDA to talk first with them

..before...
ATTY. ELOYSA. G. SICAM:

We are doing that your Honor.
COURT:
If you could put-up a period?

We've been talking to them eversince the decision came to
us, we also called meetings that were published and so
we talked to the ones who came to us. So really, the
clients wants to enforce the Arbitral awards, that's
respondents' position Your Honor. And once its enforced,
we'll just talk to the individuals on a case to case basis.

We're back to the same start where we will not consider
vacating until the third parties.... rights respected and
back to your position...
Arry. ELOYSA a SICAM:

I don't appreciate Atty. Reyes putting words in my mouth.
didn't say that.

Or you don't want to talk about it anymore?
ATTY. ELOYSA CL SICAM:

Next time, gonna talk to petitioner. if that's your position,
that is not what is stated in the decision, in the award. I
just want the award.
COURT:
36
Okay. Atty. Loloy, you coordinate with them because it's

the sheriff who will implement it just the same. Thank you
everybody. Conference is adjourned.
========
CERTIFICATION
THIS IS TO CERTIFY that the foregoing is a true and

correct transcript of stenographic notes taken to the best of our
knowledge and ability, consisting of thirty four (36) pages.
A4,1
VENUS D UID
Court St -.nographer
RTC, OCC, Baguio City

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1

Republic of the Philippines

CAMP JOHN HAY DEVELOPMENT

- versus CIVIL CASE NO. 7651-R

BASES CONVERSION DEVELOPMENT

BASES CONVERSION DEV. AUTHORITY:

JUDGE CECILIA CORAZON D. ARCHOG:

ATTY. GILBERT REYES:

ATTY. GILBERT REYES:

ATTY. ELOYSA G. SlCAM:

ATTY. GILBERT REYES:

Camp John Hay Development Company, the vacation of

/wry. ELOYSA G. SICAM:

ATTY. ELOYSA G. SICAM:

ATTY. ELOYSA G. SICAM:

ATTY. ELOYSA G. SWAM:

AT'TY. GILBERT REYES:

A7"111. GILBERT RE YES:

A7TY. GILBERT REYES:

ATTY. ELOYSA G. SICAM:

The government would lease that 247 hectare property to

A7TYY. GILBERT REYES:

A7TY. ELOYSA G. SICAM:

lease has been terminated, it is supposed to go back to the

ATTY. ELOYSA G. SICAM:

A TTY. ELOYSA G. SICAM:

ATTY. GILBERT REYES:

ATTY. P. 3LOYSA 0. SICAM:

ATTY. GILBERT .REYES:

ATTY. GILBERT REYES:

It's not like we could have complied with. the lease

ATTY. GILBERT RE YES:

ATTY. ELOY SA G. SICAM:

ATTY. GILBERT RE YES:

.ATTY. ELOYSA G. SICA M:

ATTY. GILBERT .REYES:

ATTYY. GILBERT REYES:

The lessee and the lessor were both declared as having

an innocent or a victim, because in this particular case, we

ATTY. ELOYSA G. SICAM:

ATTY. GILBERT REYES:

,9 TTY. ELOYSA G. SICAM:

/41 TTY, GILBERT RE YES:

ATTY. GILBERT RE YES:

A ivy GILBERT RE YES:

ATTY. ELOYSA 0. SICAM:

ATTY, GILBERT REYES:

ATTY. GILBERT REYES:

ATTY. ELOYSA G. SlCAM:

ATTY. GILBERT REYES:

This is the part of the leased area. Now the exclusions

ATTY. GILBERT RE YES:

ATTY. ELOYSA. G. SICAM:

ATTY. GILBERT SICAM:

ATTY. ELOYSA G. SWAM:

ATTY. ELOYSA G. SICAM:

ATM ELOYSA 0. SICAM:

Am. GILBERT REYES:

the judgment award, therefore, they benefitted from these

ATTY. GILBERT REYES:

ATTY. GILBERT REYES:

ATTY. ELOYSA G SICAM:

TTY GILBERT RE2YES: