The Supreme Court has referred to the Court of Appeals (CA) for the reception of evidence on the factual matters related to the dispute over the ownership and control over Okada Manila. The Court also held that the status quo ante order (SQAO) it issued on April 27, 2022 subsists pending the CA’s termination of the reception of evidence and submission of its report and recommendation.

In a Resolution, the Court also directed the CA Presiding Justice to cause the immediate raffle of the case among the CA Justices and to report to the Court the action taken hereon. Likewise, the concerned CA division to which the case would be raffled was directed to conduct continuous hearings on the reception of evidence with utmost dispatch and to submit to the Court its findings and recommendations within an inextendible period of 30 days from receipt of the Resolution.

In particular, the SC directed the CA to receive evidence on the following: (1) Tiger Resort, Leisure & Entertainment, Inc.’s (TRLEI) financial condition and the alleged dissipation of its assets; (2) supposed non-payment of landlord, suppliers, and contractors; (3) TRLEI’s alleged intention to list [Okada Manila International, Inc.] OMI in the United States; (4) TRLEI’s purported plan to transfer its casino business permit to OMI; 5) supposed waiver of TRLEI’s leasehold rights over the land on which Okada Manila is situated; and 6) other acts claimed to be ultra vires or prejudicial to TRLEI.

The case stemmed from the Complaint for Declaration of Nullity of Removal as a Stockholder, Director, and Officer and Reinstatement as a Stockholder, Director and Officer filed in 2018 by Kazuo Okada before the Regional Trial Court (RTC) of Parańaque City against TRLEI and its directors.

The RTC dismissed the Complaint on the ground of prescription. Citing A.M. No. 01-2-04-SC or the Interim Rules of Procedure for Intra-Corporate Controversies, the RTC found that the Complaint was an election contest, which should have been filed within 15 days from Kazuo’s unlawful removal as stockholder, director, chairperson, and Chief Executive Officer (CEO) of TRLEI on June 16, 2017, or until July 1, 2017. Since the Complaint was filed on August 29, 2018, the action has purportedly prescribed.

Kazuo appealed before the CA. The CA, however, denied his appeal and his subsequent motion for reconsideration, prompting him to elevate his case to the SC.

In his Petition for Review on Certiorari, Kazuo prayed for the issuance of an ex parte Temporary Mandatory Injunction and/or Temporary Restraining Order or in the alternative, an SQAO, to restore him as stockholder, director, chairperson, and/or CEO of TRLEI. Kazuo maintained that the Complaint is not an election contest as he was assailing his illegal removal as a stockholder of TRLEI, which removal ultimatelly stemmed from the dispute over the control of Okada Holdings Limited (OHL). He said that there are two pending cases before the Chiba District Court in Japan where he sought to be declared as the true legal and/or beneficial owner of the shares registered under the names of his children in OHL, which then translates to his beneficial ownership of 67.88% of TRLEI.

Kazuo also alleged that he is an indirect owner of TRLEI by virtue of his shareholding in OHL, a Hong Kong company which was founded and incorporated by Kazuo in 2010 to hold all of the shares of the Universal Entertainment Corporation (UEC). UEC was originally 100% owned by Kazuo when it was founded in 1969 but is now a publicly-listed company registered in the Tokyo Stock Exchange with 67.9% of its shares owned by OHL. UEC owns 100% of the shareholdings of Tiger Resort Asia Limited (TRAL), a Hong Kong corporation which in turn owns 99.99% of TRLEI.

Furthermore, Kazuo claimed that, since his ouster in 2017, TRLEI has suffered losses and capital deficit, as can be seen in its Audited Financial Statements.

On April 27, 2022, the SC issued the assailed SQAO, prompting TRLEI to file a Motion for Reconsideration. TRLEI also subsequently filed a Motion for Clarification praying that the extent of the SQAO be clarified, noting that on the pretext of implementing the SQAO, the following acts were executed: (i) installation of new directors and officers on May 2, 2022; and (ii) takeover of Okada Manila on May 31, 2022.

In resolving TRLEI’s motions, the High Court held that the “alleged losses and capital deficit are reflected in TRLEI’s own submissions to the SEC and are, thus, presumably correct in the absence of proof to the contrary. Faced with such data, and considering the exigency of the circumstances, the Court issued the SQAO to mitigate any further damage to TRLEI. Nonethless, We acknowledge that there are factual issues surrounding TRLEI’s financial condition and its operations. Thus, there is a need to ascertain whether the SQAO should be maintained or lifted,” said the Court.

To arrive at an informed resolution of the issue, the Court held it was prudent to delegate the reception of evidence to the CA. The evidence will help the Court determine ― first, on the necessity of maintaining the SQAO; second, to afford TRLEI to further present countervailing evidence supporting their prayer to lift the SQAO; and lastly, on the matter relevant to the resolution of the main issue of Kazuo’s petition, i.e., the propriety of the dismissal of his complaint on the ground of prescription, his complaint being treated as one for election contest, instead as one for an intra-corporate dispute.

The Court stressed that there are factual issues which would have to be settled before it can properly resolve the pending motions, as well as any factual matters related to the main issue of Kazuo’s petition. Further, it stressed that there are no findings of fact which can be adopted by the Court, due to the absence of a trial on the merits before the RTC. Likewise, the SC cannot settle the mentioned issues as the appreciation of facts and evidence is beyond the province of the High Tribunal.

The Court added that in issuing the assailed SQAO, it made a limited recognition of Kazuo’s interest in TRLEI as an indirect beneficial owner thereof. As such, the SQAO is meant only to preserve his right as a beneficial owner of TRLEI during the pendency of the main case.

On TRLEI’s contention that Kazuo’s claim of ownership over the controlling shares in OHL has been resolved by the courts in Japan and Hong Kong, the Court held that TRLEI failed to prove the existence of the foreign judgments in accordance with the Philippine rules on evidence. First, the documents submitted by TRLEI are neither official publications nor are they duly attested copies of the same. The certification required under the rules is likewise not submitted. Futhermore, aside from the non-submission of the decisions in the original language, there is no showing who effected the English translations of the said foreign decisions. Thus, evidence must first be adduced to establish the documents’ authenticity and the accuracy of their translations, said the Court.

FULL TEXT of G.R. No. 256470 dated August 10, 2022 at: https://sc.judiciary.gov.ph/29244/