Court junks case vs. Hanafil, SBMA | SubicNewsLink

30 June 2009

Court junks case vs. Hanafil, SBMA

The forcible entry charge filed by the former operator of the Subic Bay golf course against its successor, the Hanafil Golf and Tour Inc. (Hanafil), and the Subic Bay Metropolitan Authority (SBMA) has been dismissed by a court in Olongapo City.

Judge Rosemary Bautista, presiding judge of Branch 3 of the Municipal Trial Court in Cities (MTCC-3), threw out the case filed by the Universal International Group Development Corp. (UIGDC) after concluding that the Taiwanese-owned firm has engaged in forum shopping.

Bautista signed the order clearing Hanafil and the SBMA of charges of forcible entry on June 18, according to Hanafil president and CEO Benjamin John Defensor III.

In effect, the court “recognized the right of the SBMA to terminate its lease development agreement [LDA] with the UIGDC, thereby making it clear that Hanafil is the new rightful lessee of the property,” Defensor explained.

In dismissing the case filed by the UIGDC, the court noted that the complainant had filed different cases in different courts against the SBMA and Hanafil.

According to Judge Bautista, evidence submitted by the parties indicated that the UIGDC has initiated three separate actions before different courts.

These included a petition for certiorari with prayer for preliminary mandatory injunction and temporary restraining order (TRO) filed in April 2008 before the Court of Appeals (CA); the forcible entry case filed in May 2008 before the MTCC-3 in Olongapo; and the case for breach of contract and damages, annulment of lease development agreement with prayer for TRO and preliminary mandatory injunction filed in January 2009 before Branch 72 of the Regional Trial Court in Olongapo City.

Proving the presence of these cases filed before various courts, Bautista ruled that the UIGDC is guilty of forum shopping and all the elements of litis pendentia.

Hanafil, a Filipino-Korean joint venture backed by Hanatour, Korea’s biggest tour operator, took over the management of the 19-hole Subic golf course last year after winning in a public bidding for the operation of the facility.

The SBMA itself took over the facility in June 2007 after the UIGDC failed to settle financial obligations to the SBMA that have ballooned to some $150 million, as well as to honor its development commitments under its lease development agreement.

Among the unfulfilled commitments in UIGDC’s 1995 agreement with the SBMA were the construction of world-class facilities like a new clubhouse, a 100-room condominium, 30 VIP villas and a five-star hotel and resort prior to the Asia-Pacific Economic Conference summit meeting in Subic in November 1996.

Meanwhile, SBMA Administrator Armand Arreza clarified that because the LDA between SBMA and UIGDC was rescinded on June 8, 2007, by the SBMA board, a lessor-lessee relationship no longer exists between the two parties.

He added that the SBMA validly pre-terminated the LDA because the lessee committed contractual breaches.

“As a consequence of the valid pre-termination, SBMA has repossessed the golf course without any court order,” Arreza also explained.

Arreza said that no less than the Supreme Court has upheld the validity of the provisions in the LDA between UIGDC and SBMA, including the pre-termination and repossession of the property by UIGDC in case of violations by the company.

For its part, Hanafil has complied with all the requirements of the SBMA, Defensor averred.

He added that the firm has started the reconstruction of the Subic golf course into a world-class, all-weather championship golfing facility with 27 holes.

Hanafil is also completing plans to build a five-star hotel and luxury villas near the golf facility, Defensor said. (Henry EmpeƱo, Business Mirror Online)