I just got hold of a 10-page decision promulgated with finality on August 31, 2011, by the Sixth Division of the Court of Appeals in favor of the Bases Conversion and Development Authority (BCDA) against R-II Builders Inc. (R-II), which is owned by controversial property developer Reghis Romero II.

Actually, the decision is more in favor of a construction company that was used by R-II as a subcontractor in the construction and development of the seven-hectare property of the Army. The decision only serves as the legal basis for the payment by the BCDA to the subcontractor of some P54 million that the latter is claiming to be due it.

Specifically, the development project called for the design and construction of a four-story medium-rise Officers Quarters in Fort Bonifacio, Taguig City.

R-II sewed up the construction agreement with BCDA in September 1997 (wasn’t that the year of the Asian currency crisis that started with the Thai baht?).

“To comply with the structural works, R-II Builders sub-contracted the services to Mivan Builders Inc. (Mivan).

“In the course of the construction of the project, the works of the R-II and Mivan overlapped. Thus, Mivan’s works included installations of plumbing, sanitary and electrical items which were supposed to be done by R-II”

When the time came for an accounting of what Mivan had done for R-II as subcontractor, however, R-II refused to pay. Mivan had no recourse but to seek the intercession of Tecphil Inc., the project manager.

As it turned out, Tecphil upheld all the claims of Mivan which, despite R-II’s protestations to the contrary, were actually covered under “Item 4.10, variations agreed upon between Mivan and R-II, amounting to P40,719,802.41” as part of the subcontract.

Actually, all told, Mivan is claiming that R-II owes it a total of P212.76 million. The P40.7 million—representing 19.14 percent of its total claims against R-II—is immediately due and demandable now that the CA has come out with its verdict. (This does not yet include a sizable amount representing the value-added tax and interest on the cost of money of 6 percent annually from the date of CA decision.)

In refusing to pay Mivan, R-II appealed to the Construction Industry Arbitration Commission (CIAC). On September 1, 2009, it came out with the decision throwing out all money claims of Mivan.

It was at this point that the BCDA took up the cudgels for Mivan, all of whose claims had been upheld by Tecphil, project manager. It filed a petition for certiorari or review assailing CIAC’s assumption of jurisdiction over what was clearly not a construction dispute.

As may be expected, cases involving money claims are often tedious, dragging and boring (offering excitement only to the litigants). The case culminated in R-II petitioning the CA to uphold the CIAC verdict on the money dispute. This petition then became the basis for its final and executory decision to compel R-II to pay its money claims.

To cut to the chase, the CA’s Sixth Division, composed of Associate Justices Ramon M. Bato Jr., Juan Q. Enriquez Jr. and Florito S. Molino, were unanimous in their verdict. Their verdict was that not only had the CIAC overstepped its bounds by taking over the case, but also that Mivan’s claims were all justified and just.

To think that the awarded amount is less than 20 percent of Mivan’s total claims against R-II certainly does not bode well for R-II.

Mivan seems to have gotten into this project by the book, which is more than one can say for R-II.

Reghis Romero II first became a controversial business figure when he won the multibillion-peso Smokey Mountain Develoment Project through R-II, which had a paid-up capital of only P500,000. That was during the presidency of Fidel V. Ramos, to whom Romero was reportedly very close.

It did not take long, however, before it became evident that R-II did not have the financial muscle or the backing of banks to see the project through. The government had to abruptly take over the world showcase project, with huge equity inputs just to continue what R-II had failed to do.

The irony of it all is that Romero has filed all sorts of lawsuits against the government, particularly the Home Guaranty Corp., probably in the hope of squeezing additional payments for his aborted participation in the project.

How controversial can a businessman get?

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