G.R. No. 148152 & 149450. November 18, 2005.
International Broadcasting Corporation and Securities and Exchange Commission, Petitioners, vs. Jose T. Jalandoon, Respondent.

FACTS

Respondent Jose T. Jalandoon filed an amended petition with the Securities and Exchange Commission (SEC) against International Broadcasting Corporation (IBC) and its board members for accounting, reconstitution of records, and other intra-corporate reliefs, claiming ownership of 20% of IBC’s shares. The SEC Hearing Officer denied IBC’s motions to dismiss, which were based on arguments that the Presidential Commission on Good Government (PCGG) and the Republic were indispensable parties due to IBC’s status as an acquired government asset. The case proceeded to trial, and after both parties presented evidence, it was submitted for decision on July 25, 2000.
Before the SEC could render a decision, Republic Act No. 8799 (The Securities Regulation Code) took effect on August 9, 2000, transferring jurisdiction over intra-corporate disputes from the SEC to the Regional Trial Courts. On October 5, 2000, the SEC en banc issued an Order, finding that the Republic of the Philippines, as the registered owner of IBC shares, was an indispensable party not impleaded in the case. The SEC held that the case could not be validly decided without joining the Republic and affording it due process, and since further proceedings were required, the SEC had lost jurisdiction due to R.A. No. 8799 . The SEC thus ordered the case archived for transfer to the proper court.

ISSUE

Whether the SEC correctly held that it had lost jurisdiction over the intra-corporate case due to the effectivity of R.A. No. 8799 , considering the need to implead an indispensable party.

RULING

Yes. The Supreme Court reinstated the SEC’s October 5, 2000 Order. The legal logic hinges on the interpretation of the transitional provisions of R.A. No. 8799 . Section 5.2 of the law provides that the SEC shall retain jurisdiction over pending intra-corporate cases submitted for final resolution, which shall be resolved within one year. The Court clarified that “submitted for final resolution” refers to cases where all the required pleadings have been filed and no further proceedings are necessary for their adjudication.
In this case, the SEC en banc correctly determined that the Republic was an indispensable party whose rights would be directly affected by the judgment. Since the Republic had not been impleaded and heard, the case as of August 9, 2000, was not in a state where a final resolution could be rendered. The necessity of joining a new party and conducting further proceedings meant the case was not “submitted for final resolution” within the meaning of the law. Consequently, jurisdiction was not retained by the SEC but was transferred to the Regional Trial Courts pursuant to the new statute. The Court ordered the transfer of the case to the RTC of Makati City.