CASE DIGEST
MRM ASSET HOLDINGS 2 INC. VS. STANDARD CHARTERED BANK
G.R. No. 202761 (Resolution), [February 10,
2021]
SECOND, LOPEZ, M.V
RTC as rehabilitation
court; Judicial Review; Mootness; Moot and Academic Issue
A case or issue is considered moot and academic when it ceases to present a justiciable controversy by virtue of supervening events, so that an adjudication of the case or a declaration on the issue would be of no practical value or use. The Court will refrain from delving into the merits of the case when legal relief was no longer necessary. Hence, Courts generally decline jurisdiction over such case or dismiss it on the ground of mootness.
The case involves a complex financial arrangement between Standard Chartered Bank (SCB) and Lehman Brothers Holdings, Inc. (LBHI), leading to loans for Philippine Investment Two (PI Two). Due to LBHI's bankruptcy in the U.S., PI Two underwent rehabilitation. LBHI's bankruptcy triggered rehabilitation proceedings in the Philippines, where SCB intervened. Disputes arose, including SCB's alleged concealment of collaterals and a disagreement over SCB's representation in the Management Committee (ManCom). The Rehabilitation Court issued orders, including one directing SCB to surrender collaterals. The Court of Appeals (CA) later nullified these orders, leading to the current appeal. In CA level, SCB's was excluded from its list of creditor and rehabilitation proceedings are terminated. Despite these events, MRM persisted in seeking the surrender of pledged collaterals.
The main issues are whether the CA
erred in nullifying the order for SCB to surrender collaterals and in
reinstating SCB's membership in the ManCom.
NO. The Supreme Court dismissed the
petition as moot and academic. The dissolution of the ManCom, SCB's exclusion
as a creditor in the Rehabilitation Plan, and the termination of rehabilitation
proceedings rendered the issues moot. The surrender of collaterals was also
deemed moot due to a prior CA decision recognizing the sale or transfer of
collaterals to another entity. The court declined to pass upon the merits,
given the absence of legal relief necessity. The decision emphasized that
exceptional circumstances or constitutional issues necessitate addressing moot
cases, which were not present in this instance.
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