Case Digest (G.R. No. 216608)
Facts:
In Standard Chartered Bank, Philippine Branch v. Philippine Investment Two (SPV-AMC), Inc. (consolidated with related petitions), Standard Chartered Bank–Philippine Branch (“SCB Philippines”), a foreign banking institution licensed in Manila, extended a PHP 819 million group loan to Philippine Investment Two (SPV-AMC), Inc. (“PI Two”) under a 2003–2007 Group Facilities Agreement, secured by a guarantee of Lehman Brothers Holdings, Inc. (“LBHI”) and a 2008 Pledge Agreement over HD Supply notes and Idearc loans. When LBHI filed for Chapter 11 bankruptcy in New York in September 2008, an automatic stay prevented foreclosure on the collateral. In November 2008, Metrobank initiated PI Two’s rehabilitation before the Makati RTC, which approved a plan in December 2009 providing a six-year payback with one year’s grace. SCB Philippines joined the management committee but withheld that it held perfected collateral. After disclosures and motions by PI Two and co-creditor MRM Asset HoldingCase Digest (G.R. No. 216608)
Facts:
- Parties and contractual relationships
- Standard Chartered Bank (SCB) is an English-incorporated foreign bank licensed in the Philippines through SCB Philippines.
- Between 2003 and 2007, SCB New York and Lehman Brothers Holdings, Inc. (LBHI) executed a Group Facilities Agreement under which SCB’s branches extended loans to LBHI and its foreign affiliates, including Philippine Investment Two (SPV-AMC), Inc. (PI Two).
- LBHI executed a guarantee (“LBHI Guarantee”) to secure repayment of all affiliate borrowings, and on September 12, 2008, pledged HD Supply Notes (face value USD81,455,477; book value USD112,917,096) and Idearc loan interests (USD87,189,447) under a Pledge Agreement.
- Lehman bankruptcy and demand on PI Two
- LBHI filed a Chapter 11 petition in New York on September 15, 2008; the U.S. Bankruptcy Court issued an automatic stay on creditor enforcement on September 16, 2008.
- Under the promissory notes executed by PI Two (governed by Philippine law), SCB Philippines could accelerate the loan upon material adverse change; it demanded repayment of PHP825,063,286.11 in September 2008, which PI Two failed to pay.
- Initiation of Philippine rehabilitation proceedings
- Metropolitan Bank & Trust Company (Metrobank) filed a petition for rehabilitation of PI Two on September 22, 2008; RTC Makati Branch 149 issued a stay of all claims and set hearings.
- SCB Philippines filed its comment, was admitted as secured creditor, received management committee appointment, and the RTC approved a rehabilitation plan on December 14, 2009: PHP819 million repayable over six years (one-year grace).
- Collateral‐disclosure disputes
- PI Two alleged SCB Philippines concealed its security interest in pledged collaterals; the rehabilitation receiver supported disclosure.
- RTC ordered SCB Philippines to disclose delivered collaterals (May 4, 2011); SCB certified possession of USD81,455,477 HD Supply Notes and USD87,189,447 Idearc loan interests.
- Removal of SCB from management committee
- MRM Asset Holdings 2, Inc. (MRMAH2) moved to remove SCB from PI Two’s management and suspend further payments (July 2011).
- RTC removed SCB Philippines (September 26, 2011) and ordered proportional release of collateral as PI Two made plan payments.
- U.S. adversary complaint and Stipulation, Agreement and Order
- LBHI and Lehman Commercial Paper, Inc. (LCPI) filed an adversary complaint in U.S. Bankruptcy Court to void the Pledge Agreement.
- SCB and counterparts settled under a Stipulation, Agreement and Order (January 22, 2013), approved January 31, 2013, recognizing LCPI ownership of collaterals and granting SCB an unsecured claim against LBHI.
- Motions to modify rehabilitation plan and RTC Joint Resolution
- PI Two, PI One, and MRMAH2 filed urgent motions (March 2013) to exclude SCB and reclaim payments; Metrobank filed similar comments.
- RTC granted motions in a Joint Resolution (August 30, 2013): excluded SCB from creditors, ordered return of PHP233,629,672.88 to PI Two, and amended the rehabilitation plan.
- Court of Appeals proceedings
- SCB Philippines petitioned for certiorari with a TRO/TMO before CA (September 2013); CA granted TRO but later denied SCB’s Petition for Review and PI Two’s indirect contempt petition (Decision May 26, 2014).
- CA held that sale of pledged collaterals extinguished PI Two’s debt under Art. 2115 CC and that SCB’s TRO application lacked malice; partial reconsideration was denied (Resolution January 27, 2015).
- Supreme Court petitions
- SCB Philippines filed Rule 45 petitions (G.R. Nos. 216608 & 216625) challenging CA’s rulings on choice of law, extinguishment, and due process.
- PI Two filed a Rule 45 petition (G.R. Nos. 216702-03) challenging denial of indirect contempt, alleging SCB concealed mediation directives from CA.
Issues:
- Whether the RTC Joint Resolution failed to state clearly the facts and law on which it was based, violating due process (Art VIII, Sec 14 Const.).
- Whether Philippine law applies in determining whether PI Two’s loan was extinguished by the Stipulation, Agreement and Order.
- Whether PI Two’s debt was extinguished upon execution of the Stipulation, Agreement and Order.
- Whether the CA’s denial of PI Two’s indirect contempt petition constitutes an unappealable acquittal barred by double jeopardy.
- Whether SCB Philippines is guilty of indirect contempt for failing to disclose the RTC’s mediation directive to the CA.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)