THE Commission on Audit has dismissed a petition filed by Korean firm Hanwool I & D Corp. against the Clark Development Corp. seeking the return of its P83.344 million security deposit posted in 2009 in connection with a P4 billion joint venture project that fell through.
In a decision released only yesterday, the COA Commission Proper held that it cannot assume jurisdiction over the firm’s petition for money claim since the legality of the CDC’s action in forfeiting the security deposit has not been decided with finality by a competent court.
“In this case, the legality or validity of CDC’s forfeiture of the proposal security deposit of Hanwool for the unrealized JV project and Hanwool’s right to demand the same, are judicial issues that should be determined by judicial courts. Hence, this Commission cannot take cognizance of the petition for money claim,” the commission declared.
Records showed Hanwool submitted an unsolicited proposal to the CDC and the Philippine Amusement and Gaming Corporation (Pagcor) for the lease, development, and management of the former Mimosa Leisure Estate inside the Clark Freeport Zone.
In the said proposal, Hanwool claimed to represent I&D Venture Investment Co. Ltd., Daewong Pharmaceutical Co. Ltd., and Kangwon Land Inc.
In Board Resolution No. ES-09-01, series of 2009, the CDC declared Hanwool eligible to enter into the proposed joint venture. It subsequently issued a certification of successful negotiation dated October 16, 2009 which required Hanwool to put up the proposal security deposit in the sum of P83,344,000 equivalent to two percent of the total project cost payable to the CDC.
However, Kangwon Land later denied having entered into a JV project with Hanwool and Daewong.
At CDC’s request, the commercial counsellor of the Philippine Trade and Investment Center in Seoul, Korea confirmed that the document submitted in connection to the JV project was a forgery, and that Kangwon was taking legal action over the use of its corporate name.
The CDC Board of Directors then decided to terminate the privatization process over Mimosa Leisure Estates, citing failure of the JV companies to comply with validation requirements and the submission of documents that Kangwon tagged as falsified.
CDC likewise forfeited the P83.344 million security deposit over Hanwool’s objections.
In an opinion dated January 11, 2011, the Office of the Government Corporate Counsel advised the CDC to refer to the Terms of Reference in deciding whether or not to forfeit the proposal security deposit.
After its various appeals were denied by the CDC and receiving no response from the Office of the President, Hanwool president Baek Wang Kee filed a petition for money claim with the COA.
In dismissing the petition, the commission clarified that its authority to settle debts and claims from or owing to the government or any of its instrumentalities can be exercised only said liability has been proven and judgment of the courts has become final and executory.
However, the COA clarified that Hanwool may revive its petition once the respective rights of all parties have been resolved by the courts with finality.
