Court junks SM petition to halt Ayala-Negros Occidental deal

Posted at 02/03/14 7:50 PM

MANILA, Philippines - A court in Bacolod City has junked SM Prime's petition for certiorari against the negotiated sale and lease contract between the Negros Occidental provincial government and Ayala Land.

In a decision handed down by Judge Estefanio Libutan of Negros Occidental Branch 50, it said that the court found no abuse of discretion on the part of the provincial government, and should even be commended.

"The Court finds no evidence to prove that respondents gravely abused their discretion in an arbitrary and despotic manner in issuing Resolution No. 11-001, declaring a failure of the July 7, 2011 second public bidding. On the contrary, respondents' acts prior to, during and after the conduct of the July 2011 public bidding, including the negotiation with Ayala are all in accordance with law, prevailing COA circulars and settled jurisprudence. Respondents ought to be commended for protecting the interest of the Province," the decision stated.

SM had sought to nullify the Ayala-Negros deal and to be declared the winner of the public bidding for the property.

The controversial project involves the development of a prime 7.7 hectare property in Bacolod City, Negros Occidental.

SM Prime questioned the award by the provincial government of Negros Occidental to Ayala Land, and brought the case to court claiming it submitted a superior bid during the July 7, 2011 auction.

SM Prime said it offered to purchase portions of the property at P18,885 per square meter and lease the remaining portion at P65 per square meters, or well within the price set by the awards committee.

SM Prime said Ayala Land submitted a bid that effectively offered to purchase the property at P17,000 per sq. m. and a lease arrangement of P50 per sq. m.

Dismayed by legal woes and delays, Ayala Land said it will abandon the project.

However last year, Ayala Land said it will resume talks with the provincial government after the Commission on Audit in a resolution affirmed the finality of a September 2012 ruling that approved the conditional deed of sale and the contract of lease between the company and the province.

Ayala Land earlier said it planned to invest P6 billion to transform the Bacolod property into a mixed-use development with residential and commercial projects.

Both SM Prime and Ayala Land have refused to comment on this development.