G.R. No. 203023 - Philippine Communications Satellite Corp. vs. Sandiganbayan 5th Division

Philippine Communications Satellite Corporation (PHILCOMSAT) and PHILCOMSAT Holdings Corporation (PHC) are the petitioners.
PHC is a domestic corporation, publicly listed on the Philippine Stock Exchange (PSE), previously known as Liberty Mines, Inc. (LMI), and was engaged in the exploration and development of oil.
PHILCOMSAT played a role in increasing LMI’s capital stock through agreements involving key corporate officers such as Oliverio G. Laperal and Honorio Poblador III.

On 13 September 1995, Laperal and Poblador signed a Memorandum of Agreement for PHILCOMSAT to gain a controlling interest in LMI by increasing its authorized capital stock.
On 24 June 1996, a Supplemental Memorandum of Agreement was executed, increasing LMI’s capital stock from six billion shares to 100 billion shares, with PHILCOMSAT subscribing to 79,050,000,000 shares.
In 1997, LMI changed its name to PHC, declassified its shares, and amended its primary purpose to function as a holding company. An application for listing the increased shares on the PSE was filed, including PHILCOMSAT’s holdings.

On 1 March 2005, the Presidential Commission on Good Government (PCGG), through then Chairman Camilo L. Sabio, requested the suspension of the listing of the increased capital stock on the PSE to settle conflicting claims between two different sets of board directors of POTC and PHILCOMSAT.
The PSE deferred the listing action and referred the matter to its General Counsel to review the disqualification provisions under its revised listing rules.
The PCGG reiterated its request via a subsequent letter on 7 June 2005.

In November 2007, under President Gloria Macapagal-Arroyo, new government nominees were appointed to the boards of POTC and PHILCOMSAT, replacing several existing members.
A special stockholders' meeting held on 19 November 2007 resulted in the election of new directors and officers for both POTC and PHILCOMSAT, with government representatives being elected to both corporate boards.
Soon after, PHILCOMSAT convened its own special stockholders’ meeting and elected a unified board of directors and officers.

On 7 May 2008, the PCGG issued an En Banc Resolution recognizing the validity of the resolutions from the stockholders' meetings of POTC/PHILCOMSAT.
In subsequent correspondence, notably on 25 July 2011, Katrina C. Ponce-Enrile of POTC demanded that the PCGG rescind its objection to the listing of PHC’s increased capital stock, which was not resolved by the PCGG.
PHILCOMSAT followed up with a final demand letter to the PCGG regarding withdrawal of its objection.

On 1 February 2012, PHILCOMSAT filed a complaint before the Sandiganbayan to compel the PCGG to withdraw its objection to the listing of the increase in PHC’s capital stock, arguing that prior corporate actions had effectively resolved any conflict.
The PCGG moved to dismiss the case, arguing that the dispute was of an intra-corporate nature and that jurisdiction did not lie with the Sandiganbayan.
On 3 May 2012, the Sandiganbayan issued a Resolution dismissing the complaint for lack of jurisdiction, holding that the case was one for specific performance falling within the exclusive jurisdiction of the Regional Trial Courts (RTC) under Section 19 of B.P. 129, as amended by R.A. 7691.
On 14 August 2012, the Sandiganbayan denied PHILCOMSAT’s motion for reconsideration, reiterating its position that the dispute was intra-corporate in nature.

The cause of action to compel the PCGG to withdraw its objection was not an intra-corporate dispute since PCGG was not a stockholder, director, officer, or member of the corporation.
The issues did not fall under the enumerated intra-corporate controversies provided by law.
The appointment of new directors in 2007 and the PCGG’s own recognition in 2008 removed any basis for its objection.
The co-equal nature of the RTC and the PCGG precluded RTC authority over the PCGG.

The complaint fell squarely within the ambit of an intra-corporate controversy given its nature and the exercise of ownership rights.
The issue pertained to the enforcement of rights under the Corporation Code and internal corporate rules.
The complaint was inadequately pleaded, lacking a cause of action that would entitle petitioners to relief.

Whether the dispute raised in the petition constitutes an intra-corporate controversy.

Petitioners contend that the PCGG’s objection and the associated actions do not qualify as an intra-corporate dispute since the PCGG is not directly part of the corporate structure (i.e., not a stockholder, director, officer, or member).
Petitioners further argue that the subject matter of compelling the withdrawal of the objection does not settle any intra-corporate rights or obligations under the Corporation Code or internal regulation.

Whether the Sandiganbayan had jurisdiction over the complaint filed by PHILCOMSAT.

The court must determine if the controversy falls within the exclusive jurisdiction of the RTC, as mandated by Section 19 of B.P. 129 (as amended by R.A. 7691), or whether it constitutes an intra-corporate issue outside the Sandiganbayan’s jurisdiction.
The determination hinges on the application of the relationship test and the nature of the controversy test as developed in jurisprudence.

Whether the actions of the PCGG, in objecting to the listing of PHC’s increased capital stock, were a legitimate exercise of its powers as a representative of the Republic.

The PCGG asserts that its objection arises from its statutory mandate to protect the Republic’s interests in the sequestered entities, which implicates corporate rights.
Petitioners argue that the PCGG’s involvement is no longer justified given the changes in corporate control and the subsequent resolution of contested issues.