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Abad v. Communications

This case involves a dispute over the legitimate board of directors of Philippine Communications Satellite Corporation (PHILCOMSAT). Victor Africa claims to represent PHILCOMSAT as president and CEO. However, the Nieto-Locsin group disputes this. Africa attempted to inspect the books of another company, PHC, but was denied. PHILCOMSAT then asked if the board authorized this denial. The court had to determine if the regional trial court had jurisdiction over a stockholders' suit to enforce inspection rights under the Corporation Code. The court ultimately ruled that jurisdiction over such intracorporate disputes was transferred to the regional trial court from the Securities and Exchange Commission by a recent law.

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132 views

Abad v. Communications

This case involves a dispute over the legitimate board of directors of Philippine Communications Satellite Corporation (PHILCOMSAT). Victor Africa claims to represent PHILCOMSAT as president and CEO. However, the Nieto-Locsin group disputes this. Africa attempted to inspect the books of another company, PHC, but was denied. PHILCOMSAT then asked if the board authorized this denial. The court had to determine if the regional trial court had jurisdiction over a stockholders' suit to enforce inspection rights under the Corporation Code. The court ultimately ruled that jurisdiction over such intracorporate disputes was transferred to the regional trial court from the Securities and Exchange Commission by a recent law.

Uploaded by

joyiveeong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Roberto L. Abad, et al.

v.
Philippine Communications Satellite Corporation, Represented By Victor Africa
G.R. No. 200620
March 18, 2015

Facts:

Philippine Communications Satellite Corporation (PHILCOMSAT), along with Philippine


Overseas Telecommunications Corporation (POTC) were among those private companies
sequestered by the Philippine Commission on Good Government (PCGG) after the EDSA People
Power Revolution in 1986; the majority shareholders of PHILCOMSAT are also the seven
families who have owned and controlled POTC. In a stockholders meeting of POTC and
PHILCOMSAT, Victor Africa was among those in the Africa-Bildner group who were elected as
Director, while Locsin, Andal and Nieto, Jr. were also elected as Directors, they did not accept
their election as POTC and PHILCOMSAT Directors. Africa in his capacity as President and CEO
of PHILCOMSAT, wrote the board and management of PHC that PHILCOMSAT will exercise its
right of inspection over the books, records, papers, etc. pertinent to the business transactions
of PHC, however, on the day of inspection this was disallowed. This prompted PHILCOMSAT to
make a written query whether the refusal to permit the conduct of inspection of corporate
books and financial documents was with the knowledge and authority of PHC’s board of
directors. Petitioners countered that the main controversy is rooted upon the issue of who are
the rightful representatives and board of directors of PHILCOMSAT, specifically on the issue on
who between Africa and the Nieto-Locsin groups is the legitimate board of directors.

Issue: Whether or not the RTC has jurisdiction over a stockholders’ suit to enforce its right of
inspection under the Corporation Code.

Ruling:

Upon the enactment of Republic Act No. 8799, the jurisdiction of the SEC over
intracorporate controversies and the other cases enumerated in Section 5 of P.D. No. 902-A
was transferred to the Regional Trial Court. The jurisdiction of the Sandiganbayan has been held
not to extend even to a case involving a sequestered company notwithstanding that the
majority of the members of the board of directors were PCGG nominees.

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