CA stops deal between Phl government, Japanese firm

MANILA, Philippines - The Court of Appeals (CA) has stopped the implementation of a contract forged by the Philippine government with Japanese consortium Nagayama Taisei Corp. (NTC) for the development of the controversial Nampeidai property in Tokyo, Japan.

In a seven-page resolution, the 14th division of the appellate court issued a temporary restraining order (TRO) enjoining the implementation of the ruling of a Pasay City regional trial court directing the government to deal directly with Masahiro Nagayama, who claimed to be lead partner and manager of NTC.

The CA granted the immediate relief sought in the petition filed by Finance Secretary Cesar Purisima, Foreign Affairs Secretary Alberto del Rosario, Philippine ambassador to Japan Manuel Lopez and Bids and Awards Committee for Nampeidai Property Development Project chairman Carlo Carag.

The TRO, which was promulgated last Oct. 19 but released only by weekend, specifically stopped the implementation of the RTC’s writ of execution dated Feb. 17, 2012, which was affirmed in April 2, 2012 in favor of Nagayama, whom petitioners had branded as a “non-existent entity.”

“Considering the allegations contained in the petition, this Court finds that there is an extreme urgency to enjoin the trial court from implementing the orders dated February 17, 2012, and April 2, 2012 and the writ of execution issued by the court... Petitioners are entitled to the relief prayed for and would suffer great and irreparable injury if the trial court would be allowed to continue with the implementation of the execution pending appeal,” read the ruling penned by Associate Justice Elihu Ybañez.

The CA saw the need to first resolve key issues such as the nonexistence of the service development agreement (SDA) that the government entered into with Masaichi Tsuchiya, attorney-in-fact of the NTC, and other relevant matters before the government can comply with the order of execution.

“Verily, the implementation of the order of execution pending appeal might render moot the government’s appeal before this Court if no TRO would be issued immediately,” it explained.

The TRO will remain in effect for 60 days while the government’s application for a writ of preliminary injunction has been set for hearing on Nov. 27, 2012.

The appellate court has also directed Nagayama and Tsuchiya to comment on the government’s application for preliminary injunction.

Nagayama and Tsuchiya have been engaged in a legal battle over the control of NTC.

Tsuchiya has accused Nagayama of misrepresentation as he has been passing himself off as the representative of NTC in the Nampeidai project despite the fact that various Philippine government agencies, including the Office of the President, the Mandaluyong RTC and the appellate court have already ruled that Tsuchiya is the legal attorney-in-fact of the NTC for purposes of the Nampeidai project because of the exclusive and irrevocable power of attorney issued to him.

Tsuchiya insisted that he was part of the NTC even before, during and after the signing of the SDA between the government and NTC for the development of the Nampeidai project.

He claimed that he single-handedly and successfully won the protracted battle for the award of the project between NTC and Urban Corp., the other bidder to which initially the Nampeidai project was awarded by the Japan-Bid and Awards Committee.

For this reason, Tsuchiya said Nagayama himself executed on Feb. 15, 2006 an exclusive and irrevocable special power of attorney in his favor to represent NTC in connection with Nampeidai.

The 2,489-square meter Nampeidai property is one of the three Philippine properties in Japan that have been offered to investors under a build-operate-transfer scheme.

The public bidding, under the Government Procurement Reform Act or Republic Act 9184, was held by the BAC and NTC was declared the winning bidder after it offered to construct a ¥1.7-billion building on the property and pay the Philippine government an additional ¥480 million.

It also agreed to reserve 22 percent of the building for the exclusive use of the Philippine government, specifically to house the consulate.

The development and lease agreement covers a period of 50 years.