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    GSIS v. CA (G.R. No. 183905)

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    Rose Ann Veloria
    This case involved a dispute over proxy votes for the election of directors of Meralco, a Philippine corporation. GSIS, a major shareholder, challenged the validity of certain proxy votes before the SEC. However, the Supreme Court ruled that disputes involving the election of corporate directors fall under the jurisdiction of regular trial courts, not the SEC. While the SEC has the power to investigate proxy solicitation violations generally, controversies specifically relating to a director election are considered "election contests" that the law assigns to trial courts, not the SEC. As the proxy challenge in this case related directly to Meralco's upcoming director election, the Supreme Court found it was an election contest that fell under the jurisdiction of regular trial courts.

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    GSIS v. CA (G.R. No. 183905)

    Uploaded by

    Rose Ann Veloria
    47 views2 pages
    This case involved a dispute over proxy votes for the election of directors of Meralco, a Philippine corporation. GSIS, a major shareholder, challenged the validity of certain proxy votes before the SEC. However, the Supreme Court ruled that disputes involving the election of corporate directors fall under the jurisdiction of regular trial courts, not the SEC. While the SEC has the power to investigate proxy solicitation violations generally, controversies specifically relating to a director election are considered "election contests" that the law assigns to trial courts, not the SEC. As the proxy challenge in this case related directly to Meralco's upcoming director election, the Supreme Court found it was an election contest that fell under the jurisdiction of regular trial courts.

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    Case Digest

    Original Title

    GSIS v CA

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    This case involved a dispute over proxy votes for the election of directors of Meralco, a Philippine corporation. GSIS, a major shareholder, challenged the validity of certain proxy votes before the SEC. However, the Supreme Court ruled that disputes involving the election of corporate directors fall under the jurisdiction of regular trial courts, not the SEC. While the SEC has the power to investigate proxy solicitation violations generally, controversies specifically relating to a director election are considered "election contests" that the law assigns to trial courts, not the SEC. As the proxy challenge in this case related directly to Meralco's upcoming director election, the Supreme Court found it was an election contest that fell under the jurisdiction of regular trial courts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    47 views2 pages

    GSIS v. CA (G.R. No. 183905)

    Uploaded by

    Rose Ann Veloria
    This case involved a dispute over proxy votes for the election of directors of Meralco, a Philippine corporation. GSIS, a major shareholder, challenged the validity of certain proxy votes before the SEC. However, the Supreme Court ruled that disputes involving the election of corporate directors fall under the jurisdiction of regular trial courts, not the SEC. While the SEC has the power to investigate proxy solicitation violations generally, controversies specifically relating to a director election are considered "election contests" that the law assigns to trial courts, not the SEC. As the proxy challenge in this case related directly to Meralco's upcoming director election, the Supreme Court found it was an election contest that fell under the jurisdiction of regular trial courts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    GSIS v. CA (G.R. No.

     183905)
    Facts:

    GSIS, a major shareholder in Meralco, was distressed over the proxy validation
    proceedings and the resulting certification of proxies in favor of the Meralco
    Management. The proceedings were presided over by Meralco’s assistant corporate
    secretary and chief legal counsel instead of the person duly designated by Meralco’s
    Board of Directors. Thus, GSIS moved before the SEC to declare certain proxies, those
    issued to herein private respondents, as invalid. Private respondents contend that
    dispute in the validity of proxies is an election contest which falls under the trial court’s
    jurisdiction. GSIS argues there was no election yet at the time it filed its petition with the
    SEC, hence no proper election contest over which the regular courts may have
    jurisdiction.

    Issue:

    Whether or not the proxy challenge is an election contest cognizable by the regular
    courts.

    Ruling: YES.

    Section 2, Rule 6 of the Interim Rules broadly defines the term “election contest” as
    encompassing all plausible incidents arising from the election of corporate directors,
    including: (1) any controversy or dispute involving title or claim to any elective office in a
    stock or non-stock corporation, (2) the validation of proxies, (3) the manner and
    validity of elections and (4) the qualifications of candidates, including the proclamation
    of winners.

    Under Section 5(c) of Presidential Decree No. 902-A, in relation to the SRC, the
    jurisdiction of the regular trial courts with respect to election-related controversies is
    specifically confined to “controversies in the election or appointment of directors,
    trustees, officers or managers of corporations, partnerships, or associations.” Evidently,
    the jurisdiction of the regular courts over so-called election contests or controversies
    under Section 5(c) does not extend to every potential subject that may be voted on by
    shareholders, but only to the election of directors or trustees, in which stockholders are
    authorized to participate under Section 24 of the Corporation Code.

    The power of the SEC to investigate violations of its rules on proxy solicitation is
    unquestioned when proxies are obtained to vote on matters unrelated to the cases
    enumerated under Section 5 of Presidential Decree No. 902-A. However, when proxies
    are solicited in relation to the election of corporate directors, the resulting controversy,
    even if it ostensibly raised the violation of the SEC rules on proxy solicitation, should be
    properly seen as an election controversy within the original and exclusive jurisdiction of
    the trial courts by virtue of Section 5.2 of the SRC in relation to Section 5(c) of
    Presidential Decree No. 902-A.

    That the proxy challenge raised by GSIS relates to the election of the directors of
    Meralco is undisputed. The controversy was engendered by the looming annual
    meeting, during which the stockholders of Meralco were to elect the directors of the
    corporation. GSIS very well knew of that fact.

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