THE CARPARK feud is finally over.
The University and Selegna Holdings Corp., the private operator of the multi-deck parking building inside the campus, have settled a six-year legal dispute involving their build-operate-transfer (BOT) contract and commercial leases.
Documents obtained by the Varsitarian indicated that UST and Selegna signed an Omnibus Compromise Agreement on March 9, 2015. This development was disclosed by the University in its annual financial report submitted to the Securities and Exchange Commission (SEC) last April.
UST told the SEC that all parties were in the process of completing the “required attachments” to the compromise agreement.
Selegna had sought reimbursement of P217.5 million in connection with a civil case for “damages and specific performance” that was “anchored” on the carpark BOT contract, UST told the SEC.
Civil Law Dean Nilo Divina, whose law firm Divina and Uy Law Office acted as counsel for the University, confirmed that the two parties had entered into a compromise agreement, but declined to disclose details.
“The parties are bound by a confidentiality clause as regards the terms and conditions thereof, nonetheless, UST’s welfare and its students are safeguarded, and very much taken into consideration by UST before giving its consent [to] said agreement,” Divina said in an email to Varsitarian.
Reached by phone, lawyer Ruben Lopez of the Benedictine Law Center, legal counsel for Selegna, also declined to talk about the compromise agreement.
UST’s counsel likewise confirmed that the compromise agreement has been approved, but could not give more details regarding the deal also because of the confidentiality clause.
History of dispute
The Varsitarian was able to reconstruct a history of the legal battle between UST and Selegna from various court documents.
The case stemmed from the 2004 BOT contract between UST and Selegna in which the latter borrowed P247 million from Metrobank to build the three-level carpark and the fourth floor that now houses the UST Alfredo M. Velayo College of Accountancy. Part of the loan was guaranteed by the University.
Selegna was to run the carpark for a period of 15 years upon completion in November 2005. The 2004 BOT contract allowed Selegna to charge stipulated parking fees, lease commercial spaces, and collect monthly rentals. Selegna was to pay UST a monthly royalty and 10 percent of gross receipts, and remit the net to Metrobank.
However, in 2006, Selegna allegedly started losing money because of the following: UST allowed parking along internal roads, student parking rates were not adjusted, the annual five-percent increase in parking rates was not implemented, some parking spaces were converted into elevator lobbies, and commencement of full operations were delayed due to the construction of levels three and four as well as the College of Accountancy. The original plan was to build a two-level structure.
As a result, Selegna claimed, it was unable to meet loan repayments to Metrobank.
In October 2006, Selegna sought corporate rehabilitation from a Makati court to suspend payments to all its creditors, including those in projects unrelated to the carpark deal.
The University then sought to terminate the BOT contract, invoking a provision that supposedly allowed UST to take over the carpark in the event Selegna defaulted on its loan from Metrobank.
In April 2008, Selegna went to the Manila Regional Trial Court and filed a “petition for declaratory relief” to resolve the contract dispute. In December 2009, Selegna asked the court to convert its petition into an ordinary civil case, and sought millions in damages. The court ruled in favor of Selegna in January 2013 and ordered UST to pay P186 million representing the carpark operator’s revenue losses.
Lease agreements
Both sides nearly reached a settlement in June 2010 after Metrobank initiated discussions, but UST wanted to examine the carpark’s sublease agreements first.
Claiming to have found anomalies in the carpark’s commercial leases, UST filed its own civil case against Selegna and its lessees before the Manila Regional Trial Court in December 2010.
UST alleged that Selegna charged cheaper rates to certain lessees, which in turn supposedly charged higher rates to sub-lessees. UST also claimed it was not informed of such arrangements and as a result, was deprived of additional income.
The disputes reached the Court of Appeals, which submitted the case for decision in March 2014. The following May, however, UST and Selegna filed a joint motion to suspend court proceedings to explore the “possibility of amicably settling all cases between them.”
‘V’ sued twice, exonerated
The Varsitarian was dragged into Selegna’s dispute against UST in September 2011 when the carpark operator amended its original complaint before the Manila court, and accused the paper of conspiring with UST administrators to publish stories to damage the reputation of Selegna and its president, Edgardo Angeles.
In its motion to dismiss Selegna’s charge, the Varsitarian denied all the accusations and pointed out to the court that it was not a party to the carpark BOT contract and therefore should not be included in the civil case.
The Varsitarian maintains that its stories on the carpark beginning in 2008 were the products of independent and unbiased journalistic investigations, with only the interest of UST students, the carpark’s main users, in mind.
The Manila court eventually dismissed the case against the Varsitarian.
Members of the Varsitarian staff were also sued for libel for reporting the 2010 suit filed by UST against Selegna and its lessees in its January 26, 2011 edition.
The libel complaint filed by Selegna and Angeles was dismissed by the Makati City Prosecutor’s Office in July 2011 for “lack of probable cause.” Former senator Aquilino Pimentel Jr. stood as chief legal counsel for the Varsitarian.
The Makati prosecutor’s resolution said the 2011 Varsitarian report “appears to be factual. [Varsitarian staff members Cliff Harvey Venzon and Rommel Marvin Rio] were merely reporting on the complaint filed by UST against Selegna, et al. It appears that the news article [that is the] subject matter of the case was a fair and true report of the complaint filed by UST against Selegna et al.”
