Вы находитесь на странице: 1из 2

I. SHORT TITLE: NARRA V.

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.

III. TOPIC: Corporation Law- Filipino-Ownership requirement

IV. STATEMENT OF FACTS:


Redmont Consolidated Mines Corp. (Redmont) is a domestic corporation interested in the mining
and exploration of some areas in Palawan. Upon learning that those areas were covered by Mineral
Production Sharing Agreement (MPSA) applications of other three allegedly Filipino
Corporations- Narra Nickel Mining and Development Corp. (Narra) , Tesoro Mining and
Development, Inc. (Tesoro), and McArthur Mining, Inc. (McArthur), it filed a petition before
DENR seeking to deny the permits of the three corporations on the ground that these
corporations are in reality foreign-owned. Redmont alleged that MBMI Resources, Inc (MBMI), a
100% Canadian Corporation owns and controls at least 60% of the capital stock of McArthur,
Tesoro and Narra. Thus, given that the three corporations’ capital stocks were mostly owned by
MBMI, they were likewise disqualified from engaging in mining activities through MPSAs, which
are reserved only for Filipino citizens. Narra, Tesoro, and McArthur, on the other hand,
contended that 60% of the ownership belongs to Filipino and that only 40% of the shares of
PLMC (which owns 5998 shares of Narra), 40% of the shares of Madridejos Mining Corporation
(MMC) (whichs owns 5,997 shares of McArthur) and 40% of the Shares of SLMC (which owns
5,997 shares of Tesoro) belongs to MBMI. Additionally, they stated that their nationality as
applicants are immaterial because they also applied for Financial or Technical Assistance
Agreements (FTAA), which are granted to foreign-owned corporations.

V. STATEMENT OF THE CASE:


In 2007, Redmont filed before the Panel of Arbitrators (POA) of DENR, three (3) separate
petitions for the denial of MPSA Applications of Narra, Tesoro, and McArthur. The POA issued
a resolution disqualifying the three corporations from gaining MPSAs. Thereafter, the three
corporations filed their Notice of Appeal and Memorandum of Appeal with the Mines
Adjudication Board (MAB). Pending the appeal with MAB, Redmont filed a Complaint with the
Securities and Exchange Commission (SEC) seeking the revocation of the certificates for
registration of Narra, Tesoro, and McArthur. Redmont filed a Manifestation and Motion to
Suspend Proceeding before the MAB praying for the suspension of the proceedings on appeal
filed by the three corporations. Subsequently, Redmont filed before the Regional Trial Court of
Quezon City (RTC) a Complaint for Injunction with application for issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction. MAB issued an order in favor of Narra,
Tesoro, and McArthur. RTC later granted Redmont’s application for a TRO and set the case for
the issuance of a writ of preliminary injunction. Redmont, assailing the decision of MAB, brought
the case to Court of Appeals (CA). CA, on the findings of POAs of the DENR and applying the
Grandfather doctrine, upheld the findings that Narra, Tesoro, and McArthur are indeed foreign
corporations and, therefore, the rejection of their applications for MPSA should be recommended
to the Secretary of the DENR.

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.

VIII. DISPOSITIVE PORTION:


WHEREFORE, premises considered, the petition is DENIED. The assailed Court of Appeals
Decision dated October 1, 2010 and Resolution dated February 15, 2011 are hereby AFFIRMED.

Вам также может понравиться