Inhibition of Sereno in mining case sought

Chief Justice Ma. Lourdes Sereno: Inhibition sought. INQUIRER FILE PHOTO

MANILA, Philippines–A Filipino-owned mining company has sought the inhibition of Chief Justice Ma. Lourdes Sereno from participating in a case pending before the Supreme Court seeking the reversal of a Court of Appeals decision that stopped three mining firms from operating in the country for allegedly violating the constitutional provision limiting foreign ownership in mining companies to 40 percent.

Redmont Consolidated Mines Corp. said in a motion that Sereno’s inhibition from the case was warranted because of her husband’s involvement with DMCI Mining Corp., which has “a substantial financial interest in the legal proceedings.”

It said that Sereno’s husband, Mario Jose, is the corporate planning officer of DMCI.

Redmont said it was filing the motion to inhibit to avoid putting Sereno in a position where she may be induced to act with bias and prejudice in favor of DMCI since her husband was connected with the firm.

Pecuniary interest

Section 1, Rule 137 of the Rules of Court, states that no judge or judicial officer shall sit in any case in which he, or his wife or child, is pecuniarily interested as heir, legatee, creditor or otherwise, or in which he is related to either party within the sixth degree of consanguinity or affinity without the written consent of all parties in interest, signed by them and entered upon the record.

The judge, in the exercise of his or her sound discretion, may also disqualify himself or herself from sitting in a case, for other just or valid reasons, the rules state.

According to Redmont, DMCI was a transferee of the interests in three mining firms–Narra Nickel Mining and Development Corp., Tesoro Mining and Development Inc., and McArthur Mining, Inc.—of MBMI Resources, a Canadian company.

The three mining companies are the petitioners in the case which was originally assigned to the Supreme Court’s Second Division but was transferred to the First Division which Sereno chairs.

Reversal of ruling

They are seeking the reversal of the appellate court ruling that declared them to be foreign corporations, thus barring them from conducting mining activities in the Philippines.

Last April, the three mining firms argued before the high court that the issue of their nationality had become moot after MBMI transferred and conveyed all of its shareholdings/interests in the holding companies to DMCI.

They told the high court that the holding companies’ other shareholder (holding 66 or 67 percent) was Lanvin Natural Resources Corp., which is also a corporation duly organized and existing under Philippine laws and is at least 60 percent Philippine-owned.

Thus, with DMCI’s acquisition and purchase of MBMI’s shareholdings in the holding companies, the latter thus became 100 percent owned by Philippine nationals.

Redmont said it was able to confirm the transfer of MBMI’s shares in the three mining firms to DMCI and the latter’s interest in the legal proceedings through the MBMI website.

“Respondent cannot just sit idly by doing nothing after discovering the significance of the repeated manifestations of petitioners that DMCI allegedly infused millions of dollars to fund this case and that it will lose everything if petitioners do not succeed in the ongoing legal proceedings,” Redmont said in its motion.

Legal cost

It said it was constrained to file the motion to inhibit Sereno “considering the strong relations of her husband (Mario Jose Sereno) with DMCI who happens to be the financier of the foregoing legal proceedings and where he worked as its supposed corporate planning officer”.

According to Redmont, DMCI had allegedly provided $1.8 million to fund the cost of MBMI’s pursuing the legal proceedings.

It alleged that MBMI had even revealed that if it fails to secure a favorable ruling, its transaction with DMCI would be rescinded and the shares sold to it would be returned free of any or all encumbrances.

“At all costs, therefore, it is safe to presume that DMCI will ensure the success of all the cases involving petitioners,” Redmont said in its motion.

It said Sereno should inhibit herself from participating in resolving the petition of the three mining companies “to erase all doubts of bias and influence in the resolution of this case.”

Mining interest

The petition before the high court stemmed from a case filed by Redmont before the panel of arbitrators of the Department of Environment and Natural Resources against the three mining firms. Redmont claimed that the three firms were owned and controlled by MBMI, and were thus disqualified from engaging in mining activities through mineral production sharing agreements (MPSA) which are reserved only to Filipino citizens.

Redmont had taken an interest in mining and exploring certain areas of Palawan but discovered that the areas had pending applications for MPSAs in the names of Narra, Tesoro and McArthur.

The applications for MPSA assigned to the three mining companies in 2006 or earlier involved more than 12,100 hectares in Palawan.