THE COURT of Appeals (CA) has denied Y-1 Wine Club, Inc.’s appeal to halt a trial court order for it to stop its restaurant’s operations within the Mimosa Leisure Estate in Pampanga, over a lease dispute with Clark Development Corp. (CDC) and Filinvest Mimosa, Inc.

In a 46-page ruling made public on July 27, the CA Fifth Division said CDC legally terminated its lease deal with the firm due to a pre-termination clause included in the agreement.

Y-1 sought an injunction from the CA after an Angeles trial court ordered it to vacate the area, which had been privatized under another lease agreement between CDC and Filinvest.

“Y-1’s possession of Building No. 1988 became illegal when CDC entered into a lease agreement with Filinvest, effectively transferring its rights over the Mimosa Leisure Estate, which covers the leased property, to the latter,” Associate Justice Jennifer Joy C. Ong said in the ruling, referring to the building previously occupied by Y-1’s restaurant.

The CA said the Angeles trial court did not err when it ordered the firm to vacate the building and surrender the property to Filinvest.

It affirmed the trial court’s ruling that ordered Y-1 to pay Filinvest monthly rent of P41,895 for its use of the building and P20,000 in legal fees.

The firm alleged that CDC, the development authority of the Clark Special Economic Zone, violated a 2000 lease agreement for the operation of a food and wine restaurant club over a 417-square-meter plot of land located in the Mimosa Leisure Estate in Pampanga. 

In 2001, Y-1 and CDC entered into another lease agreement for 945 square meters of land within the same estate.CDC informed Y-1 in 2016 that it was terminating the first lease agreement after the Mimosa Leisure Estate had been privatized following another lease agreement it had with Filinvest.

An Angeles City trial dismissed a complaint filed by Y-1 due to lack of jurisdiction over the dispute but noted CDC had rightfully terminated the first lease deal based on the pre-termination clause in the agreement.

Y-1 filed another complaint in 2017 for damages against CDC and Filinvest as it argued that it had the right to operate its restaurant within the area since the pre-termination clauses in both agreements had been deleted.

The trial court sided with Filinvest as it cited a lack of evidence and ordered Y-1 to vacate the property within the privatized area. — John Victor D. Ordoñez