G.R. No.

200620, March 18, 2015

ROBERTO L. ABAD, MANUEL D. ANDAL, BENITO V. ARANETA, PHILIP G. BRODETT, ENRIQUE L. LOCSIN
AND ROBERTO V. SAN JOSE, Petitioners,

v. PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, REPRESENTED BY VICTOR AFRICA,

Respondent.

Facts: PHILCOMSAT, along with Philippine Overseas Telecommunications Corporation (POTC) were
among those private companies sequestered by the PCGG after the EDSA People Power Revolution in
1986. PHILCOMSAT owns 81% of the outstanding capital stock of Philcomsat Holdings Corporation (PHC).
The majority shareholders of PHILCOMSAT are also the seven families who have owned and controlled
POTC.

Victor Africa, in his capacity as President and CEO of PHILCOMSAT, and as stockholder in his own right,
wrote the board and management of PHC that PHILCOMSAT will exercise its right of inspection over the
books, records, papers, etc. pertinent to the business transactions of PHC for the 3rd quarter of 2005. His
request was imoliedly denied by the BOD of PHC.

PHILCOMSAT filed in the RTC a Complaint for Inspection of Books against the incumbent PHC directors
and/or officers, to enforce its right under Sections 74 and 75 of the Corporation Code of the Philippines.

The RTC dismissed the complaint for lack of jurisdiction. The court ruled that it is the Sandiganbayan
which has jurisdiction considering that plaintiff is a sequestered corporation of the Republic through the
PCGG.

PHILCOMSAT appealed to the CA thru a petition for review under Rule 43 arguing that it is the RTC and
not Sandiganbayan which has jurisdiction over the case involving a stockholder’s right to inspect
corporate books and records.

According to petitioners, PHILCOMSAT’s right of inspection hinges on the resolution of the ongoing
power struggle within PHILCOMSAT. It was further pointed out that POTC and PHILCOMSAT were both
under sequestration by the PCGG, and hence all issues and controversies arising therefrom or related or
incidental thereto fall under the exclusive and original jurisdiction of the Sandiganbayan.

Issue: Whether the Sandiganbayan has juristdiction over the case, instead of the RTC.

Held: The Court ruled that it is the RTC and not the Sandiganbayan which has jurisdiction over cases
which do not involve a sequestration-related incident but an intra-corporate controversy.

In the case at bar, the complaint concerns PHILCOMSAT's demand to exercise its right of inspection as
stockholder of PHC but which petitioners refused on the ground of the ongoing power struggle'within
POTC and PHILCOMSAT that supposedly prevents PHC from recognizing PHILCOMSAT's representative
(Africa) as possessing such right or authority from the legitimate directors and officers. Clearly, the
controversy is intra-corporate in nature as they arose out of intra-corporate relations between and
among stockholders, and between stockholders and the corporation.

Moreover, the jurisdiction of the Sandiganbayan has been held not to extend even to a case involving a
sequestered company notwithstanding that the majority of the members of the board of directors were
PCGG nominees.