Court knocks out reclamation plan


A regional trial courthas put an end to a plan to reclaim 450 hectares of seashores off Panglao Island after it dismissed a case filed seven years ago against the provincial officials that would have compelled them to enforce what the court had found as an unlawful joint-venture agreement hatched by the late governor Erico B. Aumentado.

In a 15-page decision penned by RTC-Branch 4 Judge Sisinio C. Virtudazo, the court junked Civil Case No. 8083 lodged by Oasis Leisure Islands Development Corporation (Oasis) against Gov. Edgar M. Chatto and members of the Sangguniang Panlalawigan (SP) who were all demanded (in a legal action for specific performance) to honor the contract entered by Aumentado and Oasis president Norris Oculam 11 days before the term of Aumentado expired on June 30, 2010.

“In this case, the defendants are not guilty of breach of contract because, in the first place, there was no binding contract at all,” the judge said in his decision dated July 3, 2017, but was received by the SP only on September 15, 2017.

Citing the Supreme Court’s ruling on Ayala Life Assurance Inc. vs Ray Burton Development Corporation (G.R. No. 163075), the court said that “before the remedy of specific performance is availed of, there must first be a breach of the contract.”

The case stemmed from a controversial plan conceived by Aumentado and Oculam eight years ago which would involve a massive reclamation of seashores (450 hectares) off Panglao Bay for a supposed leisure and resort park.

Court documents show that on October 2, 2009,Oasis made an unsolicited proposal to the Provincial Government of Bohol to undertake the said project.

The proposal was approved and accepted by the Province and the SP, which passed Resolution No. 2009-633 authorizing Aumentadoto represent the Province and enter into a negotiation for a Joint Venture and Development Agreement (JVDA) with Oasis corporation for the proposed reclamation project.

It was stipulated in the agreement that before the proposed reclamation project would be implemented, an environmental study should be undertaken “to ensure that the project will not cause irreversible damage to the local government of the project site.”

In the JVDA, it was stated that the Province and Oasis had agreed that they would honor the results of the environmental impact study, which would serve as the basis for the implementation of the project.

As provided in the JVDA, the provincial government then filed on June 21, 2010 an application with the Philippine Reclamation Authority (PRA) for the reclamation of approximately 450 hectares of land off-shore of Panglao Bay in the municipality of Panglao.

When Chatto and new SP members assumed office in 2010, they discovered that the joint-venture agreement devised by Aumentado and Oculam was full of legal issues.

But Oasis asserted that it had entered into a lawful agreement with the Province of Bohol for the development of a leisure and resort park that would sit on a 450-hectare reclamation project.

The corporation said the Province had an obligation to comply with the Agreement, more so that the latter had filed an application with the PRA by way of “Letter of Intent.”

“The unwillingness, failure, and refusal of the defendants to further implement the JVDA is a manifestation of contumacy to honor a valid, binding, and enforceable agreement, which failure and refusal jeopardize (Oasis’) interests under the agreement,” the plaintiff corporation argued in its court pleadings.

The corporation said that the defendant provincial officials “cannot simply renege on their obligations and refuse to honor the JVDA made pursuant to a validly enacted SP Resolution, which has not been modified, recalled, or set aside.”


In their reply, Chatto and the SP officials admitted that there was a passage of Resolution No. 2009-633, but it does not mean that the unsolicited proposal was approved and accepted considering that the said resolution only authorized Aumentadoto enter into “negotiation only.”

The defendants said the JVDA was unenforceable because Aumentado was not authorized to enter into an agreement with Oasis in the first place.

Aumentado was only authorized to enter into a negotiation, but he was not authorized to enter into an agreement, court documents show.

The defendants argued that the application with PRA was not duly authorized by the Sangguniang Panlalawigan as provided in the Implementing Rules and Regulation of the Philippine Reclamation Authority law.

“From the minutes of the sessions of the Sanggunian, no Resolution was passed and adopted authorizing the Province through the Governor to file an application for Reclamation at the PRA as per certification from the SP Secretary,” the defendants had told the court.

In denying all the other allegations of Oasis “for lack of sufficient knowledge as to their truth,” Chatto and the SP members argued that since the JVDA is unenforceable, the same is “not binding nor are the defendantsduty-bound to abide by its provisions.”

In asking the court to dismiss the case for lack of cause of action, defendants cited Article 1403 of the New Civil Code which provides that “contracts entered into in the name of another person by one, who has been given no authority or legal representation or who has acted beyond his powers are unenforceable, unless they are ratified.”

“The plaintiff has no original authority to undertake reclamation projects and cannot claim the exclusive right to develop the project considering that it will still have to secure a contract from the PRA after public bidding conducted for the purpose,” said Chatto and the SP members in their pleadings filed with the court.


Following the discovery of the provincial officials that Aumentado and Oculam’s agreement was tainted with legal issues, the SP on December 2, 2011,passed and approved Resolution No. 2011-673 authorizing Atty. Edgar M. Chatto, as governor, to cause the cancellation and rescission of the Joint Venture and Development Agreement (JVDA).

The provincial officials had also decided to cancel the agreement after consultation with University of the Philippines (SP) scientists and marine experts who had said the proposed reclamation project would be damaging to the environment/ecosystem.

The Bohol Capitol’s cancellation of the JVDA had prompted Oasis to sue Chatto and the SP officials.


The court, in dismissing the case, points out Section 16, Article 2 of the Philippine Constitution which mandates the state to protect and advance the right of the people to a balanced and healthful ecology.

“And the defendants, representing the people, have rightly performed their task of safeguarding the rights of the people they represent,” the court decision said.

“Unfortunately, we have been less mindful in the observance of this basic principle of justice not only in the way we relate to each other but also in the way we treat our natural environment. We have, it seems, forgotten the prophet’s admonition that ‘he who sows the wind shall reap the whirlwind,’” the court said, quoting a lecture by the late Supreme Court Chief Justice Renato Corona.



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