GR 140453; (October, 2000) (Digest)
G.R. No. 140453 ; October 17, 2000
Transfarm & Co., Inc., and Transdaewoo Automotive Manufacturing Company, petitioners, vs. Daewoo Corporation and Daewoo Motor Co., Ltd., respondents.
FACTS
Petitioners Transfarm & Co., Inc. (Transfarm) and respondent Daewoo Corporation (Daewoo) entered into a joint venture agreement in 1994 for the assembly and distribution of Daewoo vehicles in the Philippines. The agreement stipulated the incorporation of Transdaewoo Automotive Manufacturing Company (TAMC), with Transfarm holding 70% and Daewoo holding 30% of its shares. The parties agreed that disputes arising from the joint venture agreement would be settled by arbitration in Hong Kong, but the agreement itself would be governed by Philippine law. After the agreement deteriorated in December 1997, Transfarm and TAMC filed a complaint in the Regional Trial Court (RTC) of Cebu City against Daewoo and Daewoo Motor Co., Ltd. (DMCL), seeking to enjoin them from conducting automotive business in the Philippines.
Respondents moved to dismiss the case, contending it was an intra-corporate dispute falling under the exclusive jurisdiction of the Securities and Exchange Commission (SEC). The RTC denied the motion to dismiss. Respondents then successfully elevated the matter to the Court of Appeals via a petition for certiorari. The appellate court, in its decision dated July 29, 1999, ruled that the SEC had jurisdiction and ordered the dismissal of the RTC complaint. Petitioners’ motion for reconsideration was denied, prompting this petition for review.
ISSUE
Whether the Regional Trial Court or the Securities and Exchange Commission had jurisdiction over the complaint filed by petitioners.
RULING
The Supreme Court ruled in favor of the petitioners and held that jurisdiction was vested in the Regional Trial Court. The Court’s decision was primarily based on a significant change in the applicable law during the pendency of the appeal. Republic Act No. 8799 , or The Securities Regulation Code, was enacted, transferring the SEC’s jurisdiction over intra-corporate disputes to the courts of general jurisdiction, specifically the appropriate Regional Trial Courts. The law provided that the SEC would retain jurisdiction only over pending intra-corporate cases submitted for final resolution.
Applying the principle that statutes regulating court jurisdiction and procedure are generally applicable to actions pending and undetermined at the time of their passage, the Supreme Court examined the status of the case. The complaint was originally filed with the RTC, not the SEC, and was not pending before the SEC for final resolution. Consequently, under the clear provisions of the new Securities Regulation Code, the case fell within the jurisdiction of the RTC. The Court therefore set aside the decision of the Court of Appeals and remanded the case to the Regional Trial Court of Cebu City for further proceedings.