Facts:

The case involves the Government Service Insurance System (GSIS) as the petitioner against the Court of Appeals and several private respondents, including Anthony V. Rosete, Manuel M. Lopez, Felipe B. Alfonso, Jesus F. Francisco, Christian S. Monsod, Elpidio L. Ibañez, and Francis Giles Puno. The events leading to the case began with the annual stockholders' meeting of the Manila Electric Company (Meralco) scheduled for May 27, 2008. Proxies were required to be submitted by May 17, 2008, with proxy validation set for May 22, 2008. Following the resignation of Camilo Quiason, the corporate secretary position at Meralco was filled by Jose Vitug on May 15, 2008. However, during the proxy validation on May 22, the proceedings were presided over by Anthony Rosete, who was the assistant corporate secretary and in-house chief legal counsel of Meralco. GSIS, a significant shareholder in Meralco, expressed distress over the proxy validation process, which resulted in the certifica...

Facts:

1. Context of the Dispute: The case involved the annual stockholders' meeting of Manila Electric Company (Meralco) scheduled for May 27, 2008. Proxies were required to be submitted by May 17, 2008, with proxy validation set for May 22, 2008.
2. Vacancy in Corporate Secretary Role: Following the resignation of Camilo Quiason, Meralco's board designated Jose Vitug as corporate secretary for the annual meeting. However, proxy validation was presided over by Anthony Rosete, assistant corporate secretary and in-house legal counsel.
3. GSIS’s Concerns: The Government Service Insurance System (GSIS), a major shareholder in Meralco, was dissatisfied with the proxy validation process, alleging irregularities in favor of Meralco management.
4. Legal Actions by GSIS: On May 23, 2008, GSIS filed a complaint with the Regional Trial Court (RTC) of Pasay City to declare certain proxies invalid. On May 26, 2008, GSIS filed an Urgent Petition with the Securities and Exchange Commission (SEC) to restrain Rosete from recognizing proxies in favor of Meralco management and to annul said proxies. The SEC issued a Cease and Desist Order (CDO) on the same day.
5. Annual Meeting: At the meeting on May 27, 2008, Rosete proceeded despite the CDO, declaring it null and void.
6. SEC’s Show Cause Order: On May 28, 2008, the SEC issued a Show Cause Order (SCO) against private respondents.
7. Court of Appeals Proceedings: Respondents filed a petition for certiorari with the Court of Appeals, which dismissed GSIS’s complaint, declaring the CDO and SCO void.

Issue:

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Ruling:

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Ratio:

1. Jurisdiction of Regular Courts: Under Section 5.2 of the Securities Regulation Code (SRC), the jurisdiction over intra-corporate controversies, including election-related disputes, was transferred to the regular courts. The proxy validation issue was intimately tied to the election of directors, placing it within the exclusive jurisdiction of the RTC.
2. Invalidity of CDO and SCO: The SEC’s issuance of the CDO was procedurally flawed. It failed to specify the statutory basis for the order (whether under Section 5.1, 53.3, or 64 of the SRC), violating due process requirements. Additionally, the CDO was signed by only one SEC commissioner, contravening the collegial nature of the SEC.
3. Forum Shopping and Splitting Causes of Action: GSIS’s simultaneous filing of complaints in the RTC and SEC constituted forum shopping and splitting causes of action, which are prohibited under the Rules of Court.
4. Sanctions on GSIS Lawyers: The Court of Appeals’ sanctions on GSIS lawyers were unwarranted. GSIS’s charter authorizes its in-house legal counsel to act independently of the Office of the Government Corporate Counsel (OGCC).