Case Summary (G.R. No. 195580)
Petitioners and Respondent
Redmont alleged that petitioners’ capital stock was effectively controlled by MBMI, rendering them foreign corporations disqualified from obtaining MPSAs reserved for Filipino nationals. Petitioners countered that they met the 60% Filipino equity requirement under Section 3(aq) of the Philippine Mining Act and that their nationality was immaterial once they converted their MPSA applications to Financial or Technical Assistance Agreements (FTAAs), which may be granted to foreign–owned corporations.
Key Dates
- January 2, 2007: Redmont filed three petitions with the DENR Panel of Arbitrators (POA).
- December 14, 2007: POA declared petitioners foreign corporations, disqualified their MPSAs, and voided existing permits.
- February 7, 2008: POA denied petitioners’ motions for reconsideration.
- September 10, 2008 & July 1, 2009: Mines Adjudication Board (MAB) reversed POA, finding lack of jurisdiction over nationality issues.
- October 1, 2010: Court of Appeals (CA) Seventh Division reversed MAB, upheld POA’s disqualification findings, and recommended rejection of petitioners’ MPSA applications.
- February 15, 2011: CA denied petitioners’ motion for reconsideration.
- April 21, 2014: Supreme Court rendered its decision.
Applicable Law
- 1987 Constitution, Article II, Section 19 (national economy effectively controlled by Filipinos) and Article XII, Section 2 (natural resources under State control; MPSAs reserved to Filipino–majority corporations).
- Republic Act No. 7942 (Philippine Mining Act of 1995), Sec. 3(aq), (t) (60% Filipino equity requirement for mineral agreements; definition of foreign-owned corporation).
- Republic Act No. 7042, as amended by RA 8179 (Foreign Investments Act), Sec. 3(a) (definition of Philippine national; control test).
- DENR Administrative Order No. 96-40 and DAO 2005-15 (rules on adverse claims and POA jurisdiction).
- Securities and Exchange Commission Rules (1967) para. 7; DOJ Opinions No. 18 (1989) and No. 20 (2005) (control test vs. grandfather rule).
- Rules of Court: Rule 130 Secs. 29, 31 (admissions by co-partner/privies); Rule 7 Sec. 5 (certification against forum shopping).
Facts
- Petitioners secured and assigned MPSA and Exploration Permit applications covering several Palawan areas.
- Redmont learned of these filings and alleged that MBMI, as a major investor holding over 40% in petitioners’ predecessors, effectively controlled petitioners, thus breaching the 60% Filipino equity requirement.
- Petitioners asserted they satisfied the 60% limit, questioned POA jurisdiction over nationality, and noted their conversion to FTAA applications.
Procedural History
- POA (Dec. 14, 2007) disqualified petitioners as foreign corporations and voided their MPSAs.
- Petitioners appealed to the MAB, which (Sept. 10, 2008 & July 1, 2009) reversed POA, holding that nationality issues must be resolved by SEC and that POA lacked jurisdiction to cancel MPSAs.
- Redmont filed a CA petition under Rule 43 (CA-SP 109703).
- CA, Seventh Division (Oct. 1, 2010), reversed MAB, upheld POA’s nationality findings under the “grandfather rule,” and recommended denial of petitioners’ MPSAs; left FTAA conversions to DENR Secretary/President.
- CA denied reconsideration (Feb. 15, 2011).
- Redmont pursued parallel suits: SEC certificate-revocation complaint (remanded by SEC En Banc, then dismissed by CA Former Tenth Division in 2012), RTC injunction, presidential petition revoking FTAAs (2011).
Main Issues
- Mootness—whether FTAA conversion rendered the nationality dispute academic.
- Jurisdiction—whether the POA could decide corporate nationality and void MPSAs.
- Forum shopping—Redmont’s multiple overlapping proceedings before administrative bodies, courts, and executive offices.
- Nationality test—whether to apply the SEC/DOJ-endorsed “control test” (60% Filipino capital confers nationality) or the more stringent “grandfather rule” (trace ultimate Filipino ownership across corporate layers).
Supreme Court Decision
- Mootness: rejected; controversy involves grave constitutional and pub
Case Syllabus (G.R. No. 195580)
Facts
- In December 2006, Redmont Consolidated Mines Corp. (Redmont) sought to explore and mine areas in Palawan, only to discover existing Mineral Production Sharing Agreement (MPSA) applications by Narra Nickel Mining & Development Corp. (Narra), Tesoro Mining & Development, Inc. (Tesoro), and McArthur Mining, Inc. (McArthur).
- McArthur’s predecessor SMMI (later MMC) held MPSA-AMA-IVB-153 and EP-IVB-44; Narra’s predecessor PLMDC held MPSA-IV-1-12; Tesoro’s predecessor SMMI held MPSA-AMA-IVB-154. All applications transferred to petitioners.
- Petitioners also filed for conversion of their MPSA applications into Financial or Technical Assistance Agreements (FTAAs) to allow foreign participation.
Procedural History
- Jan 2, 2007: Redmont filed three petitions with the DENR Panel of Arbitrators (POA) to deny petitioners’ MPSA applications, alleging foreign control by MBMI Resources, Inc. (MBMI), a 100% Canadian corporation.
- Dec 14, 2007: POA Resolution disqualified petitioners as foreign corporations, declared their MPSAs null and void, and gave due course to Redmont’s EPA applications.
- Feb 7, 2008: POA denied petitioners’ motions for reconsideration.
- Petitioners appealed to the Mines Adjudication Board (MAB).
- Sept 10, 2008: MAB reversed POA, dismissed Redmont’s petitions for lack of jurisdiction to determine nationality, and recommended reliance on the SEC for nationality issues.
- Sept 16, 2008: RTC Branch 92 granted Redmont a TRO enjoining MAB from further proceedings.
- July 1, 2009: MAB denied Redmont’s motions for reconsideration for a second time.
- Redmont petitioned the Court of Appeals (CA).
- Oct 1, 2010: CA (Seventh Division) reversed MAB orders, upheld POA’s finding that petitioners are foreign corporations, recommended rejection of their MPSAs, and deferred FTAA matters to the DENR Secretary and the President.
- Feb 15, 2011: CA denied petitioners’ motion for reconsideration.
- Petitioners filed a Rule 45 Petition for Review on Certiorari with the Supreme Court (SC).
- Parallel actions: Redmont filed an SEC revocation complaint (consolidated into G.R. No. 205513), a complaint for injunction in the RTC, and a petition with the Office of the President which canceled petitioners’ FTAAs.
Issues
- Whether the SC should dismiss the petition as moot because petitioners’ MPSA applications were converted into grant