In a 64-page petition, Chavez sought a temporary restraining order or a writ of preliminary injunction, or both, to stop the National Housing Authority (NHA) and R-II Builders Inc. from implementing the project and other related agreements to avoid further damage to Filipino taxpayers.
Chavez said the firm, owned by businessman Reghis Romero II, agreed to fully fund and complete the project without any cost to the government. In return, the government would grant R-II Builders reclamation rights over large tracts of foreshore and submerged land and effect the subsequent transfer of ownership to Romero’s firm.
The NHA and R-II Builders signed the joint venture agreement on March 9, 1999. There was no specified payment for the firm to develop Smokey Mountain, a dumpsite in Tondo, Manila, into a low-cost medium-rise housing complex and industrial or commercial site.
Chavez contended that this arrangement is illegal as the Constitution states that lands under public domain cannot be acquired by public corporations.
He also said only the Public Estates Authority has the exclusive power to reclaim lands under public domain.
The NHA, according to Chavez, was never given the authority by the Department of Environment and Natural Resources to undertake the reclamation.
He argued that these foreshore and submerged lands, aside from being inalienable public land that is "beyond the commerce of man," were not declared to be no longer needed for public use nor was any law passed that would allow their sale.
Chavez also cited the lack of any public bidding awarding ownership of these tracts of land to R-II Builders.
He called on the Supreme Court to nullify the transfer of ownership of the property to Harbour Centre Port Terminal, Inc., a corporation whose shares are mostly owned and controlled by R-II Builders and R-II Holdings, Inc., another firm owned by Romero.
Chavez asked the high tribunal to compel the NHA and R-II Builders to disclose to the public all documents and information related to the project.
He also assailed the government’s decision to finance the project, instead of terminating it, after Romero’s firm ran out of funds after building a few houses.