MBMI Announces Philippine Court Decision - Seite 2

The Mines Adjudication Board ("MAB") of the DENR reversed the POA's decision and declared that the POA had no jurisdiction to determine the nationalities of corporations. Redmont's motion for reconsideration filed with the MAB was denied. The Court of Appeals reversed the MAB's decision and upheld the POA's ruling. The Operating Companies' motion for reconsideration of this decision was denied.

The Operating Companies appealed to the Supreme Court, with the appeal docketed as G.R. No. 195580, and asserted that:

1. The POA had no jurisdiction to determine their nationalities because that was a power of the Securities and Exchange Commission;
2. They are Philippine nationals because 60% of their outstanding capital stock is owned by Philippine corporations (i.e., Sara Marie Mining, Inc., Patricia Louise Mining and Development Corporation and Madridejos Mining Corporation - "Holding Companies") which are themselves 60% Philippine-owned; and
3. The case has become moot and academic with the execution of the FTAA with the Republic of the Philippines.

Subsequently, the Operating Companies manifested that they, as well as the Holding Companies, had become 100% Philippine-owned with the sale of MBMI's equity in the Holding Companies and Operating Companies to DMCI Mining Corporation in October 2012 and March 2014, respectively. In the Company's view, this circumstance was further reason to consider the MPSA case moot and academic.

In its Decision dated April 21, 2014, the Supreme Court (through its Third Division) denied the Operating Companies' appeal. The Operating Companies filed their motion for reconsideration of this decision by the Supreme Court on June 5, 2014. In its Resolution dated January 28, 2015, the Supreme Court (through its Special Third Division) denied the Operating Companies' motion for reconsideration on the following grounds:

1. The case has not been rendered moot and academic;
2. The application of the so-called Grandfather Rule to determine the allegedly true nationalities of the Operating Companies is justified by the circumstances of the case, and after applying the Grandfather Rule the Supreme Court ruled that the Operating Companies were foreign corporations; and
3. The POA has jurisdiction in mining disputes to pass upon the nationalities of corporations applying for MPSAs.

The Operating Companies received a copy of the Resolution on March 9, 2015 and filed a second motion for reconsideration on March 24, 2015. In that motion, they reiterated (among other arguments) that the Grandfather Rule has no statutory basis, and raised other arguments relating to the application of that rule. The Operating Companies also renewed their earlier request for the case to be heard by the Philippine Supreme Court en banc. The Operating Companies believe that the novelty and importance of the issues involved (in particular, the application of the Control Test recognized in several statutes vis-a-vis the Grandfather Rule) and the significant ramifications of the Court's decision on partly nationalized industries -- which would then affect foreign investments in the country and the Philippine economy as a whole -- justified the case's referral to and resolution by the entire Philippine Supreme Court. (The Resolution states that it "den[ies] the motion for reconsideration with finality. No further pleadings shall be entertained. Let entry of judgment be made in due course." However, the January 28, 2015 Resolution apparently failed to consider the Operating Companies' earlier motion to elevate to the en banc, which was filed on February 5, 2015.)