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  • Equitable vs. RCBC

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    Lincy Jane Agustin
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    The tribunal ruled that RCBC's claim against the sellers of Bankard shares was not time-barred, as it was filed within the three-year period specified in the share purchase agreement. The tribunal also rejected arguments that RCBC was guilty of laches. While the tribunal considered rescinding the agreement impractical, one member dissented from the partial ruling. RCBC then filed to confirm the ruling. The RTC confirmed the ruling and denied the sellers' motions. The sellers directly appealed to the Supreme Court, but this was a procedural error as they should have appealed to the Court of Appeals according to the relevant law.

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    The tribunal ruled that RCBC's claim against the sellers of Bankard shares was not time-barred, as it was filed within the three-year period specified in the share purchase agreement. The tribunal also rejected arguments that RCBC was guilty of laches. While the tribunal considered rescinding the agreement impractical, one member dissented from the partial ruling. RCBC then filed to confirm the ruling. The RTC confirmed the ruling and denied the sellers' motions. The sellers directly appealed to the Supreme Court, but this was a procedural error as they should have appealed to the Court of Appeals according to the relevant law.

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    36 views2 pages

    Equitable vs. RCBC

    Uploaded by

    Lincy Jane Agustin
    The tribunal ruled that RCBC's claim against the sellers of Bankard shares was not time-barred, as it was filed within the three-year period specified in the share purchase agreement. The tribunal also rejected arguments that RCBC was guilty of laches. While the tribunal considered rescinding the agreement impractical, one member dissented from the partial ruling. RCBC then filed to confirm the ruling. The RTC confirmed the ruling and denied the sellers' motions. The sellers directly appealed to the Supreme Court, but this was a procedural error as they should have appealed to the Court of Appeals according to the relevant law.

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    © All Rights Reserved
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    of 2

    RCBC’s claim is not time-barred, the claim properly

    Equitable vs. RCBC falling under the contemplation of Sec. 5(g) and not Sec.
    5(h). As such, the tribunal concluded, RCBC’s claim was
    Facts: filed within the three (3)-year period under Sec. 5(g)
    and that the six (6)-month period under Sec. 5(h) did
    Petitioners Equitable PCI Bank, Inc. (EPCIB) and the not apply.
    individual shareholders of Bankard, Inc., as sellers, and
    respondentRCBC Capital Corporation (RCBC), as buyer, The tribunal also exonerated RCBC from laches, the
    executed a Share Purchase Agreement (SPA) for the latter having sought relief within the three (3)-year
    purchase of petitioners’ interests in Bankard, period prescribed in the SPA. Notably, the tribunal
    representing 226,460,000 shares, for the price of PhP considered the rescission of the SPA and ASPA as
    1,786,769,400. impracticable and "totally out of the question.

    To expedite thepurchase, RCBC agreed to dispense with RCBC filed with the RTC a Motion to Confirm Partial
    the conduct of a due diligence audit on the financial Award. The RTC issued the first assailed order
    status of Bankard. On June 2, 2000, RCBC deposited the confirming the Partial Award and denying the adverted
    stipulated downpayment amount in an escrow account separate motions to vacate and to suspend and
    after which it was given full management and inhibit. From this order, petitioners sought
    operational control of Bankard. June 2, 2000 is also reconsideration, but their motion was denied by the
    considered by the parties as the Closing Date referred RTC.
    to in the SPA.
    Issue: WON there is manifest disregard of the law by
    Sometime in September 2000, RCBC had Bankard’s the ICC-ICA
    accounts audited, creating for the purpose an audit
    team and the conclusion was that the warranty, as
    contained in Section 5(h) of the SPA (simply Sec. 5[h] Held: None.
    hereinafter), was correct. RCBC paid the balance of the
    As earlier recited, the ICC-ICA’s Partial Award dated
    contract price. The corresponding deeds of sale for the
    September 27, 2007 was confirmed by the RTC in its
    shares in question were executed in January 2001.
    first assailed order of January 8, 2008. Thereafter, the
    Thereafter RCBC informed petitioners of its having
    RTC, by order of March 17, 2008, denied petitioners’
    overpaid the purchase price of the subject shares,
    motion for reconsideration. Therefrom, petitioners
    claiming that there was an overstatement of valuation
    came directly to this Court on a petition for review
    of accounts amounting to PhP 478 million, resulting in
    under Rule 45 of the Rules of Court.
    the overpayment of over PhP 616 million. Thus, RCBC
    claimed that petitioners violated their warranty, as This is a procedural miscue for petitioners who
    sellers, embodied inSec. 5(g) of the SPA (Sec. 5[g] erroneously bypassed the Court of Appeals (CA) in
    hereinafter). pursuit of its appeal. While this procedural gaffe has not
    been raised by RCBC, still we would be remiss in not
    RCBC, in accordance with Sec. 10 of the SPA, filed a pointing out the proper mode of appeal from a decision
    Request for Arbitration dated May 12, 2004 with the of the RTC confirming, vacating, setting aside,
    ICC-ICA. In the request, RCBC charged Bankard with modifying, or correcting an arbitral award.
    deviating from, contravening and not following
    generally accepted accounting principles and practices Rule 45 is not the remedy available to petitioners as the
    in maintaining their books. Arbitration in the ICC-ICA proper mode of appeal assailing the decision of the RTC
    proceeded after the formation of the arbitration confirming as arbitral award is an appeal before the CA
    tribunal consisting of retired Justice Santiago pursuant to Sec. 46 of Republic Act No. (RA) 9285,
    M.Kapunan, nominated by petitioners; Neil Kaplan, otherwise known as the Alternative Dispute Resolution
    RCBC’s nominee; and Sir Ian Barker, appointed by the Act of 2004, or completely, An Act to Institutionalize the
    ICC-ICA. After drawn out proceedings with each party Use of an Alternative Dispute Resolution System in the
    alleging deviation and non-compliance by the other Philippines and to Establish the Office for Alternative
    with arbitration rules, the tribunal, with Justice Kapunan Dispute Resolution, and for other Purposes,
    dissenting, rendered a Partial Award . On the matter of promulgated on April 2, 2004 and became effective on
    prescription, the tribunal held that April 28, 2004 after its publication on April 13, 2004.
    It is clear from the factual antecedents that RA 9285
    applies to the instant case. This law was already
    effective at the time the arbitral proceedings were
    commenced by RCBC through a request for arbitration
    filed before the ICC-ICA on May 12, 2004. Besides, the
    assailed confirmation order of the RTC was issued on
    March 17, 2008. Thus, petitioners clearly took the
    wrong mode of appeal and the instant petition can be
    outright rejected and dismissed.

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