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REDMONT
II. FULL TITLE: Narra Nickel Mining and Development Corp., Tesoro Mining and
Development, Inc. and McArthur Mining, Inc. versus Redmont
Consolidated Mines Corp.–G.R. No. 195580, April 21, 2014, J. Velasco, Jr.
VI. ISSUE:
Whether or not the application of the Grandfather Rule is proper in this case.
VII. RULING:
Yes, the application of the Grandfather Rule is proper when the 60-40 Filipino-Foreign Equity
ownership is in doubt. In the present case, MBMI, a 100% Canadian-owned corporation is a
common investor of Narra, Tesoro, and McArthur. Thus, there exists a doubt as to the actual
ownership of the three corporations. Under the Grandfather Rule, it is not enough that the
corporation does have the required 60% Filipino stockholdings at face value. To determine the
percentage of the ultimate Filipino ownership, it must first be traced to the level of the investing
corporation and added to the shares directly owned in the investee corporation. Applying this
rule, it turns out that the Canadian corporation owns more than 60% of the equity interests of
Narra, Tesoro and MacArthur. Hence, the latter are disqualified to participate in the exploration,
development and utilization of the Philippine’s natural resources.