Respecting the rule of law

Those familiar with the country’s summer capital, Baguio, know that Camp John Hay, that charming mountain estate, is among its popular destinations.

Here, one can stay in pine-scented log cabin homes, enjoy the fairways and – for the kids – ride those quaint and colorful horses for half an hour or so.

Unfortunately, this popular Baguio abode for locals and visitors alike is caught in the middle of a tug-of-war between the Sobrepeña-led Camp John Hay Development Corp. (CJHDevCo) and the BCDA.

For those who aren’t familiar with what happened, BCDA has gained control of the estate following a Supreme Court decision last year that upheld an arbitral ruling in its favor. BCDA, the lessor of the property, took CJHDevCo to arbitration for supposed violations of their lease agreement.

Early this year, a Baguio Regional Trial Court upheld the Supreme Court ruling. As such, BCDA has taken over the facilities covered by the decision.

However, what was supposed to be an orderly transition has grown into a dizzying legal battle with a noisy PR campaign.

I couldn’t help but notice articles in recent months in different newspapers about various stakeholders posing challenges to the takeover and stories calling for the sanctity of contracts to be honored.

As for CJHDevCo, it has been openly appealing to BCDA to fully recognize, protect and honor the rights of the third-party homeowners, unit owners and golf club members of Camp John Hay.

“We just want their rights respected. Respect their rights. These are people who invested in the PPP (public-private partnership) project in the ’90s,” CJHDevCo chairman and CEO Robert John Sobrepeña said in March.

He earlier talked to The STAR, reiterating the company’s hope that the rights of Camp John Hay stakeholders would be honored.

But many sublessees had long been seeking CJHDevCo’s attention, complaining that the company failed to deliver its promised developments. Some of the sublessees also have no clear contracts – only legal headaches.

In fact, the Baguio City Public Information Office announced in a recent social media post the schedule of a town hall meeting with the Department of Justice, the NBI and the sub-lessees “regarding the investigation of the alleged fraudulent acts and misrepresentations of CJHDevCo, its stockholders, directors, officers and employees concerning Camp John Hay properties.”

Early this month, Korean nationals filed a civil case against CJHDevCo seeking damages over their sublease deals that had been voided after the company’s original lease with the government was nullified.

They are also seeking a court order to freeze CJHDevCo’s assets at Forest Lodge within Camp John Hay – the subject of the disputed sublease contracts.

Government contracts

CJHDevCo has warned that the court’s decision and the continuing legal battle could affect investor confidence as it would reflect how the government upholds the sanctity of contracts.

To a certain extent, this is true. I am sure that investors must be so frustrated now over the ongoing tug-of-war. They are caught in the crossfire and their only fault was investing in Camp John Hay.

This is an inevitable offshoot of the court’s decision, and I hope that BCDA will find a workable solution for this, which could involve compensating the affected stakeholders.

But then again, how can BCDA move forward with this if some sublease contracts with CJHDevCo are problematic to begin with?

According to John Hay Management Corp., some sublessees entered into lease contracts with CJHDevCo for 50 years “in spite of the latter’s lease agreement with the BCDA for only 25 years.”

What I see here is that CJHDevCo has left a trail of legal headaches to Camp John Hay stakeholders and now, with the court’s decision, has run out of legal remedies. Thus, it is bringing its case to the court of public opinion. Perhaps, it is hoping that President Marcos, who has, in the past, made many populist decisions, will intervene.

The court, however, has already made its ruling after years of legal battle and it must be respected.

Real investor confidence is also built on respecting court decisions and ending decades of non-compliance.

Clearly, CJHDevCo wants public sympathy, but in the first place, the company itself failed to deliver on its obligations, according to the Supreme Court.

As for BCDA, it did what any responsible government agency should do – acting on the court’s decision and protecting public property.

The Pangilinan-led Landco Pacific Corp. has been tasked to handle the interim management of Camp John Hay’s legacy hotels to assist the government in the property’s transition to a new private partner (The STAR, Jan. 7, 2025).

Landco has a track record of developing leisure estates. I am sure that with the hospitality company in charge of interim management, Camp John Hay’s hotels will surely improve.

Moving forward, I hope the issues surrounding Camp John Hay are resolved soon and in an orderly manner.

Government agencies like BCDA must learn its lesson. It must make sure that they enter into long-term arrangements with companies that are capable of delivering what is stipulated in the contracts, have a track record of good governance and those that value transparency.

I also hope the stakeholders, especially the hapless sublessees and taxpayers, get more than tedious legal headaches and blame-shifting.

As for Camp John Hay, named after the American statesman John Milton Hay, I believe that it deserves to be the distinctly charming place it once was, before it became so commercialized.

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Email: [email protected]. Follow her on X @eyesgonzales. Column archives at EyesWideOpen on FB.