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Sandiganbayan ordered two Northstar companies to “immediately vacate and peacefully surrender” its leased properties at Engineer Island in Manila’s Port Area
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The August 17 decision of the anti-graft court is in favor of BASECO, represented by the Presidential Commission on Good Government through the Office of the Solicitor General
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The Sandiganbayan said Northstar Transport Facilities, Inc. and Northstar Shipping and Marine Services, Inc. breached their contracts with BASECO on financial and non-monetary terms
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The Northstar companies also ordered to pay their outstanding balance of over P23.87 million plus 10% of their annual net income from 2016 to 2024, and remit to the OSG an amount equivalent to 5% of the court’s total monetary award
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Sandiganbayan also noted that Northstar failed to fulfill its obligations to modernize the facilities and equipment of the Manila Integrated Cargo Terminal with a committed fund of P450 million
Sandiganbayan, the Philippines’ anti-graft court, has ordered two Northstar companies to “immediately vacate and peacefully surrender” its leased properties at Engineer Island in Manila’s Port Area.
The August 17 decision – authored by Special Second Division Presiding Justice Geraldine Faith Econg, with the concurrence of Associate Justices Edgardo Caldona and Gener Gito – is in favor of the Bataan Shipyard and Engineering Co., Inc. (BASECO), which is represented by the Presidential Commission on Good Government (PCGG) through the Office of the Solicitor General (OSG).
The leased properties are under the administration of the PCGG by virtue of a Writ of Sequestration dated April 14, 1986.
The Sandiganbayan said Northstar Transport Facilities, Inc. (NTFI) and Northstar Shipping and Marine Services, Inc. breached their contracts with BASECO on financial and non-monetary terms.
“The defendants evidently committed substantial breaches of contract in this regard, which justifies the rescission of the lease and now renders illegal their possession of the leased premises,” reads part of the 41-page decision.
The initial 10-year lease contract started in October 2006. On April 28, 2010, the parties executed a Supplemental Contract of Lease, which provided another 10 years from October 20, 2016, or until October 20, 2026.
“Thereafter, defendant NTFI failed to make timely rental payments. Considering the repeated failure to pay and to settle the arrears despite demands and negotiations, the plaintiff sent a Letter dated May 2, 2012 demanding defendant NFTI to pay PHP 36,629,057.00 as partial arrears and accrued penalty interest and to vacate the leased premises,” according to the timeline laid out in the court decision.
Court battle starts
In June 2012, NTFI filed a complaint before the Mandaluyong Regional Trial Court over rental payment disputes. That case was finally dismissed in February 2020, after which BASECO and the NTFI entered into a fourth lease deal. Disputes again arose by 2022.
In January this year, BASECO through the OSG filed an “unlawful detainer complaint” before the Sandiganbayan, which asks the court to order the Northstar companies to vacate the leased premises and pay their dues.
The Northstar companies have been ordered by Sandiganbayan to pay their outstanding balance of over P23.87 million plus the add-on rate of 10% of their annual net income from 2016 to 2024, and remit to the OSG an amount equivalent to 5% of the court’s total monetary award.
The financial obligations involve about P10.83 million to BASECO covering the unpaid monthly amortizations under a compromise agreement covering July 2024 to August 2026 plus interest at the legal rate of 6% per year to be computed from February 6, 2025, which is the date of the extrajudicial demand. Another P6.9 million will cover the principal amount of back rentals for the period March 2025 to August 2026 plus 6% interest from date of judicial demand.
The Sandiganbayan also noted that Northstar failed to fulfill its obligations to modernize the facilities and equipment of the Manila Integrated Cargo Terminal (MICT) with a committed fund of P450 million along with a Corporate Social Responsibility (CSR) program that will benefit the community.
“All told, in light of the material violations of both the monetary and non-monetary provisions of the lease, the defendants’ right of possession, though initially lawful by virtue of a valid lease agreement, has become illegal upon due notice of the termination of the lease,” decision reads.
