REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

CITY OF OLONGAPO
Branch __

SUBIC BAY SPORTS MANAGEMENT, INC.,

Plaintiff,

-versus- Civil Case No. _______

For Specific Performance

SUBIC BAY METROPOLITAN AUTHORITY, and Damages with
Defendant. Prayers for a Temporary
x--------------------------------------------x Restraining Order and
Writs of Preliminary and
Permanent Injunction

COMPLAINT

PLAINTIFF, through the undersigned counsel, respectfully submits –

1. Plaintiff is a duly organized domestic corporation with principal

offices at the Subic Bay International Tennis & Sports Center, Remy Field,

Subic Bay Freeport Zone [hereinafter, SBFZ], where it may be served with

the processes of this Honorable Court.

2. The Defendant is a government-owned or controlled corporation in

charge of the Subic Bay Freeport Zone, with principal offices at Building 229,

Waterfront Road, Subic Bay Freeport Zone, where it may be served with

summons and the other processes of this Honorable Court.

3. Some time in 2002, the plaintiff executed a ten-year

Management Contract [MC] with the defendant for the development of a

significant portion of the SBFZ’s Remy Field into a sports complex. A copy of

said LDA dated April 1, 2002 [but executed on December 13, 2002, is

attached as Annex A.

4.. The plaintiff duly fulfilled its development commitments under

said MC and established, among others, tennis and badminton courts, and a

restaurant bar and sports store in said area, for the use and enjoyment of

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both the residents and visitors of the SBFZ, at a development cost of

approximately PESOS TWO MILLION [P2,000,000.00].

5. Since then, the plaintiff, consistent with its development

commitments per said MC, introduced various improvements, such that,

through the years, SBFZ’s Remy Field, because of the plaintiff’s

improvements in the area, particularly, its establishment of what is now

known as the Subic Bay International Tennis Center [SBITC], has been

transformed into a sports complex at par with international standards, and

was even used during the most recent SEA Games held in the Philippines.

6. Also, consistent with its commitments under said MC, the plaintiff

has, through the years, faithfully complied with its percentage of gross

revenue payments to the defendant, as and by way of consideration of its

use of the properties and facilities subject of the MC, pursuant to Clause 6 of

the same.

7. Because of the plaintiff’s success in its establishment and

maintenance or administration of the SBITC, the parties executed on

September 4, 2004 a second Contract, to be effective for twenty-five [25]

years, known as their Expanded Investment & Property Management

Contract [hereinafter, EIPMC], wherein the plaintiff, among others, agreed

to infuse an additional capital of PESOS THIRTY-SEVEN MILLION TWO

HUNDRED SEVENTY-ONE THOUSAND THREE HUNDRED

[P37,271,300.00] in the form of capital improvements to commence in

2004 and to be completed ten years thereafter, or in 2014. A copy of

said EIPMC is attached as Annex B.

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 8. Said EIPMC called upon the plaintiff to establish within said period

four additional tennis courts, six to eight badminton courts and a new sports

restaurant and entertainment facility. The plaintiff also undertook to

renovate an annex building, or Building 494, located in the Remy Field area,

and construct a fitness gym within said period.

9. Shortly after the execution of said EIPMC, or in March 2005, the

plaintiff promptly started working on its commitments under the same. In a

letter dated March 3, 2005, a copy of which is attached as Annex C, the

plaintiff submitted to the defendant its architectural and other plans for the

construction of the stipulated improvements, and requested the defendant to

expedite the issuance of the pertinent permits therefor.

10. By December 2005, the plaintiff had completed its additional

works on five badminton courts; built two additional tennis courts;,

completed its sports bar and restaurant; established a restaurant and garden

café; started repair works on the annex building, which had been infested

with termites, and erected new steel gates and additional doors to protect

the same; and constructed a fitness gym. All these were duly reported to

the defendant, per the plaintiff’s letter dated December 9, 2005, a copy of

which is attached as Annex D. It is significant that the plaintiff started the

repair works on Building 494 even before the same had been formally turned

over to it by the defendant.

11. Six months later, the plaintiff submitted to the defendant another

status report on its improvement and construction works in fulfillment of its

obligations under said EIPMC. A copy of said letter dated June 5, 2006 is

attached as Annex E.

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 12. In a letter dated July 19, 2005, a copy of which is attached as

Annex F, the plaintiff formally requested the turn-over of Building 494,

pursuant to the provisions of the parties’ EIPMC, consistent with its earlier

advise to the effect that it would like to start construction works in earnest

on said property, per its earlier letter dated June 1, 2005, a copy of which is

attached as Annex G.

As will be stressed later, said property, or Building 494, was never

formally turned over by the defendant to the plaintiff, despite the express

provisions of the EIPMC [Vide Clause 5.2].

13. For the next year and a half, the plaintiff diligently went about its

improvement and construction works.

14. To expedite and enhance its development plans and works under

the parties’ EIPMC, the plaintiff presented to the defendant some time in

January 2007 a proposal to establish a High-Performance Athletes’ Institute.

Said plan would entail the plaintiff’s subleasing a portion of the Remy Field

area to Double Dragon Subic, Inc. for the construction of a hotel facility. A

copy of its letter dated January 23, 2007, specifying said proposal, is

attached as Annex H.

15. Three months later, the defendant denied or rejected plaintiff’s

aforesaid proposal, per its letter dated April 19, 2007, a copy of which is

attached as Annex I. It is significant that, in said letter, the defendant

clearly declared that it “is not in favor of commercially developing the

Remy Field Area.” [Emphasis supplied.]

16. The plaintiff duly requested a reconsideration of said rejection, per

its letter dated April 27, 2007, a copy of which is attached as Annex I.

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 17. In August 2007, the plaintiff reiterated its request made about

two years earlier for the immediate turn-over of Building 494. In its letter-

reply to said formal request, the defendant, surprisingly, asked for an

updated status report on the plaintiff’s fulfillment of its development

commitments and, further, advised it that its Board of Directors had denied

“with finality” plaintiff’s proposal to construct a hotel in the Remy Field Area.

A copy of said letter of defendant dated August 28, 2007 is attached as

Annex J.

18. The plaintiff promptly complied with said request of the defendant

and submitted its report dated August 30, 2007, a copy of which is attached

as Annex K.

19. For the next few months, plaintiff did not hear anything from the

defendant, but noticed that Building 494 had been leased by the latter to

Philko Tae Kwon Do Training Center and the Subic Zambales Association

School. Plaintiff also noticed that the Soft Ball Field of the Remy Field Area

had been levelled and cleared. Its inquiries led to its discovery that the

defendant had leased said area to Double Dragon Subic, Inc. for the

construction of a hotel.

20. More than six months after it submitted its latest status report to

the defendant, the plaintiff received a letter [dated March 17, 2008, a copy of

which is attached as Annex L] from the defendant, wherein it stated, among

others that the plaintiff had been in “continuous default” on its development

commitments. This statement surprised, shocked the plaintiff and prompted

it to immediately respond. In its reply dated March 19, 2008, a copy of

which is attached as Annex M, the plaintiff President, Virgilio Sison, stressed

as follows –

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 “The statement that we are ‘in continuous default’ is a
complete surprise to me and my company. This is the first
time that you advised us in this manner ever since both our
offices have established communication.

“Your good office will be reminded by the following updated

reports of compliance which were sent to you personally and
your department heads since the beginning of 2005
immediately after the Expanded Investment and Property
Management Contract [EIPMC] was signed by and between
Subic Bay Metropolitan Authority (SBMA) and Subic Bay Sports
Management, Inc. (SBSMI) in September 24, 2004.”

21. After proceeding to specify the development commitment reports

submitted by the plaintiff to the defendant over the years, the plaintiff asked

the defendant to explain what it meant by “continuing default,” and

requested it to specify or itemize its acts constituting default.

22. The plaintiff likewise took said opportunity to voice out its

concerns with respect to the defendant’s award of the Soft Ball Field at the

Remy Field Area directly to Double Dragon Subic, Inc. for the construction of

a commercial hotel. It will be recalled that the plaintiff’s earlier proposal to

sublease the same area to Double Dragon, Inc. for purposes of constructing a

hotel facility as part of its proposed High Performance Athletes’ Institute, had

been denied by the defendant on the ground that “is not in favor of

commercially developing the Remy Field Area.”

23. The simple questions were asked – why was the plaintiff not

allowed to pursue said hotel project with Double Dragon Subic, Inc? Why

was Double Dragon Subic Inc. allowed to pursue said hotel project in said

area?

24. The plaintiff likewise took said opportunity inquire as to why

Building 494 had not yet been turned over to it, despite its numerous

requests, made pursuant to the provisions of the parties EIPMC. Indeed,

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said property had, in the meantime, and during the effectivity of the parties

aforesaid EIPMC, been leased by the defendant to other entities, namely, the

Philko Tae Kwon Do Training Center and the Subic Zambales Association

School.

25. The defendant never replied to said letter of the plaintiff.

26. Instead, it wrote the plaintiff on August 11, 2008 as follows –

“We write to advise you that your company is

hereby given a curing period of thirty (30) days to
comply with your investment & development
commitments to SBMA x x x.”

“Please be advised that failure to comply with your

investment & development commitments to SBMA within
the said curing period shall constrain us to effect the
take over of Remy Field Sports Facility.”

A copy of said letter is attached as Annex N.

27. At this juncture, it must be stressed that plaintiff’s development

commitments are, per the express provisions of the parties’ EIPMC,

supposed to be carried out or completed over a period of ten years, or until

2014. Accordingly, the plaintiff has actually about six more years to

complete the same.

It appears that the defendant has totally ignored this stipulation in the

parties’ EIPMC, and is bent on or determined to instead fulfill its “obligations”

to Double Dragon Subic, Inc., Philko Tae Kwon Do Training Center and the

Subic Zambales Association School, for reasons which escape the plaintiff.

The plaintiff respectfully submits that, by reason of its actions, the defendant

cannot but be considered as in bad faith. Indeed, its aforecited acts cannot

but be considered as tainted with malice.

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 28. Plaintiffs have discovered that, with the expiration of the deadline

prescribed by the defendant for it to “cure” its alleged “default,” the

defendant, in malicious disregard of its obligations under the parties’ EIPMC,

has started taking steps for its take-over of the properties and facilities

managed by the plaintiff, on which it has spent millions of pesos by way of

improvements and construction works. Indeed, the defendant is poised to

oust the plaintiff from the properties and facilities it has established and

administered since 2002 within the next few days.

Hence, this urgent complaint.

29. Because of the defendant’s plan to unilaterally rescind its

Agreements with the plaintiff, unlawfully oust the plaintiff from the subject

premises within the next few days and to take-over the same for purposes of

awarding said properties and facilities to other investors or businessmen, the

plaintiff stands to lose all of its investments on the same, amounting to

PESOS ________ MILLION [P________]. Moreover, all of plaintiff’s

employees would lose their jobs.

30. Because of the defendant’s unlawful and malicious acts, the

plaintiff was constrained the services of legal counsel for purposes of

protecting its rights, for which services, it has agreed to pay attorney’s fees

in the amount of PESOS FIVE HUNDRED THOUSAND [P500,000.00].

Allegations in Support for Prayers for a Temporary Restraining Order

and/or Writs of Preliminary and Permanent Injunction

31. The plaintiff respectfully repleads herein all of its foregoing

allegations.

32. The plaintiff respectfully submits that the defendant’s plan to

unlawfully oust the plaintiff from the subject premises within the next few

days will cause grave injustice and permanent and irreparable damage to the

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plaintiff, for which reason, plaintiff respectfully submits that there is a very

urgent need for this Honorable Court to issue a temporary restraining order

for purposes of stopping or restraining the defendant, or any of its

departments, agents, officers or representatives, including its Law

Enforcement Department, from taking any step or performing any act for

purposes of ousting the plaintiff from its management of the subject

properties and facilities or otherwise adversely affecting its lawful possession

and administration of the same.

33. Plaintiff respectfully submits that it is entitled to the relief herein

demanded, and the whole or part of such relief consists of restraining the

defendant, or any of its departments, agents, officers or representatives,

including its Law Enforcement Department, from its commission or

continuance of the acts complained of in these proceedings, to wit, its

unilateral rescission of the parties’ contracts, including the parties’ EIPMC,

and its planned unlawful ouster of the plaintiff from its lawful possession and

administration of the subject properties and facilities, known collectively as

the Subic Bay International Center, and the take-over by the defendant of

the possession and management or administration of the same, for purposes

of awarding the same to other investors or businessmen or third parties. Said

acts would clearly work injustice to the applicant; and constitute a violation

of the plaintiff’s rights. Indeed, as earlier stressed, said acts sought to be

restrained herein, if done, would work permanent and irreparable damage to

the plaintiff’s rights and interests.

34. The plaintiff is ready, willing and able to post a bond executed to

the defendant in an amount to be fixed by the Honorable Court, to the effect

that the plaintiff will pay to the defendant all damages which he may sustain

by reason of the injunction or temporary restraining order if the Honorable

Court should finally decide that the plaintiff is was not entitled thereto.

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 Reliefs

PREMISES CONSIDERED, the plaintiff respectfully ASKS and

PRAYS that the Honorable Court -

1. Upon its receipt of this Complaint, ISSUE a Temporary

Restraining Order restraining, enjoining or otherwise stopping the defendant,

or any of its departments, agents, officers or representatives, including its

Law Enforcement Department, from unilaterally rescinding any of the parties’

contracts, including the parties’ EIPMC, and ousting the plaintiff from its

lawful possession and administration of the subject properties and facilities,

known collectively as the Subic Bay International Center, and the take-over

by the defendant of the possession and management or administration of the

same, for purposes of awarding the same to other investors or businessmen

or third parties.

2. After due proceedings –

2.1. DECLARE the defendant’s Notice of Default against the plaintiff

as baseless or unlawful and UPHOLD the validity of all of the parties’

Agreements;

2.2. DIRECT the defendant to faithfully comply with its obligations

under all of its Agreements with the plaintiff;

2.3 ISSUE a writ of preliminary or permanent injunction enjoining

or otherwise stopping the defendant, or any of its departments, agents,

officers or representatives, including its Law Enforcement Department, from

unilaterally rescinding any of the parties’ contracts, including the parties’

EIPMC, and ousting the plaintiff from its lawful possession and

administration of the subject properties and facilities, known collectively as

the Subic Bay International Center, and the take-over by the defendant

of the possession and management or administration of the same, for

purposes of awarding the same to other investors or businessmen or third

parties, and, further,

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 2.4 AWARD attorney’s fees in favor of the plaintiff and against the

defendant in the amount of PESOS FIVE HUNDRED THOUSAND

[P500,000.00].

Other reliefs and remedies, just and equitable in the premises, are

likewise prayed for.

City of Olongapo. September 19, 2008.

Counsel for the Petitioner

[Address]
PTR No.
IBP No.
MCLE Compliance No.
Telephone Number ______
Telefax Number _____
E-mail Address - _____________

VERIFICATION and CERTIFICATION

I, VIRGILIO D. SISON, of legal age, subscribing under oath, hereby

depose and state that I am the President and General Manager of the plaintiff
in the instant proceedings; I caused the preparation of the foregoing
Complaint; I have read the allegations specified therein, including the
allegations in support of the plaintiff’s prayers for a temporary restraining
order and writs of preliminary and permanent injunction, and reviewed the
annexes attached thereto, and I hereby affirm that said allegations are true
and correct to the best of my personal knowledge and that said annexes are
faithful reproductions of their originals to the best of my personal knowledge.

I hereby further certify that I have not filed, nor am I aware of, any
other suit or action involving the same parties and issues before any other
court or tribunal and that I undertake to inform this Honorable Court as well
as the other court or tribunal of the existence of such a similar suit or action
within five [5] days from my discovery thereof.

City of Olongapo, September __, 2008

VIRGILIO D. SISON

SUBSCRIBED AND SWORN to before me this ____ day of _______

2008, affiant exhibiting to me his Community Tax Certificate No.
___________ issued on ______________ at ______________.

Doc. No. ___

Page No. ___
Book No. ___
Series of 2008.

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