, May 30, 2000
REVISED RULES OF PROCEDURE 2000 OF THE SECURITIES AND EXCHANGE COMMISSION
related laws in the interest of just, speedy and inexpensive
determination of disputes and claims, the Commission hereby promulgates
the following revised rules of procedure to govern actions and
proceeding before it, in the exercise of its adjudicative functions.
PART 1 Securities Investigation and Clearing Department and appealed cases to the En Banc
RULE I
General Provisions
SECTION 1-1. Title — These Rules shall be known as “Revised Rules of Procedure 2000 of the Securities and Exchange Commission”
SECTION 1-2. Definitions — For purposes of these Rules the following terms shall mean:
a. Commission — the Securities and Exchange Commission
b. Commissioner — the Chairman or any of the Associate Commissioners
c. Hearing Officer — any Commissioner, officer, body or
panel duly designated or created by the Commission to hear and decide a
particular case.
d. Order — any directive, other than a judgment, of a Hearing Officer.
e. Corporation — also refers to a partnership or an association registered with the Commission.
SECTION 1-3. Construction — These rules shall be
liberally construed in order to promote public interest and to assist
the parties in obtaining just, speedy and inexpensive determination of
every action or claim brought before the Commission.
SECTION 1-4. Nature of Proceedings — Subject to the
requirements of due process, proceedings before the Commission shall be
summary in nature not necessarily adhering to or following the technical
rules of evidence obtaining in the regular courts. Provided, however,
that the Rules of Court may apply in a suppletory manner whenever
practicable.
SECTION 1-5. Venue of Hearings — All actions or claims
brought under these Rules shall be commenced and heard in the main
office of the Commission. However, an action involving a corporation
whose principal office is within a region where the Commission has an
extension office may be filed with and heard in such extension office.
SECTION 1-6. Assignment of Cases — All cases filed with
the Commission shall be assigned to the Hearing Officer(s) by means of a
raffle, unless for special reasons the Commission determines otherwise.
The SICD Director or his deputy shall conduct the raffle on a regularly
scheduled basis in open court with at least two hearing officers
present. The minutes of the raffle proceedings shall be recorded and
signed by the Director and the hearing officers in attendance. (new).
RULE II
Parties
SECTION 2-1. Who May be Parties — Only natural or juridical persons or entities authorized by law may be parties.
SECTION 2-2. Parties in Interest — All actions or claims
filed with the Commission must be prosecuted and defended in the name of
the real party in interest. All persons having an interest in the
subject of the actions or claims and in obtaining the relief demanded
shall be joined as complainants or petitioners. All persons who claim an
interest in the controversy or the subject thereof adverse to the
complainant or petitioner or who are necessary to a complete
determination or settlement of the questions involved therein shall be
joined as respondents.
SECTION 2-3. Representative Parties — A trustee of an
express trust, a guardian, executor or administrator, or a party
authorized by statute, may sue or be sued without joining the party for
whose benefit the action is presented or defended; but the Hearing
Officer may, at any stage of the proceedings, order such beneficiary to
be made a party. An agent acting in his own name and for the benefit of
an undisclosed principal may sue or be sued without joining the
principal except when the contract involves things belonging to the
principal.
SECTION 2-4. Class Suit — When the subject matter of the
action or claim is one of common or general interest to many person, and
the parties are so numerous that is impracticable to join all before
the Commission, one or more may sue or defend for the benefit of all.
But in such case, the Hearing Officer shall make sure that the parties
actually before it are sufficiently numerous and representative so that
all interests concerned are fully protected.
SECTION 2-5. Derivative Action — No action or claim shall
be brought by a stockholder in the name of a corporation unless the
complainant (a) was a stockholder at the time the questioned transaction
occurred as well as the time the action was filed and remains a
stockholder during the pendency of the action, and (b) the complainant
alleges with particularly the efforts, if any, made by the complainant
to obtain the action he desires, or the reason for not making the
effort.
An action authorized by this section shall not be discontinued,
compromised or settled without approval of the Hearing Officer. If the
Hearing Officer determines that the interest of the stockholders or of
any class thereof will be substantially affected by the discontinuance,
compromise or settlement, the Hearing Officer may direct that notice, by
publication or otherwise, be given to the stockholders or any class
thereof whose interests he determines will be so affected.
SECTION 2-6. Compulsory Joinder of Indispensable Parties —
Parties in interest without whom no final determination can be had of
an action shall be joined either as complainant, petitioner or
respondent.
SECTION 2-7. Transfer of Interest — In case of any
transfer of interest, the action may be continued by or against the
original party, unless the Hearing Officer upon motion directs the
person to whom the interest is transferred to be substituted in the
action or joined with the original party.
SECTION 2-8. Intervention — A person may, at any stage of
the proceedings, be permitted by the Hearing Officer, in his
discretion, to intervene in an action, if he has legal interest in the
matter in litigation or in the success of either of the parties or an
interest against both, or when he is so situated as to be adversely
affected by a distribution or other disposition of property in the
custody of the Commission.
SECTION 2-9. Motion for Intervention — A person desiring to intervene shall file a motion for leave of the Commission with notice upon all parties to the action.
SECTION 2-10. Discretion of the Hearing Officer — In
allowing or disallowing a motion for intervention, the Hearing Officer
shall consider whether or not the intervention will unduly delay or
prejudice the adjudication of the rights of the original parties and
whether or not the intervenor’s right may be fully protected in a
separate proceeding.
SECTION 2-11. Complaint/Petition or Answer in Intervention —
The intervention shall be made by complaint/petition filed and served
in regular form and may be answered as if it was an original
complaint/petition filed and served in regular form and may be answered
as if it was an original complaint/petition but where intervenor unites
with the respondent in resisting the claims of the complainant or
petitioner, the intervention may be made in the form of an answer to the
complaint or petition.
SECTION 2-12. When to File — The complaint/petition or
answer in intervention shall be filed within ten (10) days from notice
of the order permitting the intervention.
RULE III
Commencement of Action: Pleadings
SECTION 3-1. Commencement of Action — An action under these rules is commenced by the filing of an original complaint or petition with the Commission (new).
SECTION 3-2. Pleadings Allowed — The only pleadings
allowed to be filed are the complaint/petition, compulsory counterclaim
pleaded in the answer, the answer thereto, the reply and the rejoinder.
Provided, however, that such restrictions are not applicable to actions
filed under the Rules of Procedure on Corporate Recovery. (amended)
SECTION 3-3. Verification — Only the complaint or
petition and the answer shall be verified by an affidavit that the
affiant has read the pleading and the allegations therein are true and
correct of his own knowledge and belief. A pleading which contains a
verification based on “information and belief” or upon “knowledge,
information and belief,” or which lacks a proper verification, shall be
treated as an unsigned pleading and shall not be considered as filed.
(amended).
SECTION 3-4. Certification — The complainant/petitioner
or principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith: (a)
that he has not thereto commenced any action or filed any claim
involving the same issues in any court, tribunal or agency and, to the
best of his knowledge, no such other action or claim is pending therein;
(b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter
learn that the same or similar action or claim has been filed or is
pending, he shall report the fact within five (5) days therefrom to the
Commission wherein his aforesaid complaint or initiatory pleading has
been filed.
Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other initiatory pleading
but shall cause the dismissal of the petition without prejudice. The
submission of a false certification or non-compliance with any of the
undertakings therein shall constitute indirect contempt of court,
without prejudice to the corresponding administrative and criminal
actions. If the acts of the party or his counsel clearly constitute
willful and deliberate forum shopping, the same shall be ground for
summary dismissal with prejudice and shall constitute direct contempt,
as well as a cause for administrative sanctions.
SECTION 3-5. Prohibited Pleadings — The following pleadings, motions, or petitions shall not be allowed in the covered by these Rules:
a. Motion to dismiss the complaint;
b. Motion for a bill of particulars;
c. Motion for new trial, or for reconsideration of judgment or order, or for reopening of trial;
d. Petition for relief from judgment;
e. Motion for extension of time to file pleadings, affidavits or any other paper;
f. Memoranda;
g. Motion to declare the defendant in default;
h. Motion for Postponement and other motions of similar intent; and
i. Motion for leave to amend pleadings. (amended)
SECTION 3-6. Duty of Hearing Officer — The Hearing
Officer shall, from an examination of the allegations in the
complaint/petition and such evidence as may be attached thereto, dismiss
the complaint/petition if it is not sufficient in form and substance.
Otherwise, he shall forthwith issue the corresponding summons within
Five (5) days from the filing of the complaint/petition.
SECTION 3-7. Form of Pleadings — All pleadings filed
shall be printed, mimeographed or typewritten on legal size bond papers
and shall be in English or Filipino.
Each pleading shall contain a caption setting forth the name of the
Commission, the title of the case, the case number, and designation of
the pleading.
The original and two (2) signed copies of every pleading shall be
filed with the Commission, except a complaint, petition, or petition in
intervention where there are more than one respondent in which case,
there shall be filed as many additional signed copies of the said
pleading as there are additional respondents.
No pleading shall be accepted by the Commission unless it conforms to the formal requirements provided by these rules.
SECTION 3-8. Complaint/Petition — The compliant/petition
shall contain the names and residences of the parties, a concise
statement of the ultimate facts constituting the complainant’s or
petitioner’s cause or causes of action, a brief statement of the right/s
sought to be enforced, the law, rule or regulation under which the
complaint/petition is based, a summary of the complainant’s or
petitioner’s claims, a statement of the issues to be determined, the
affidavits of witnesses, copies of documentary and other evidence, and
the relief/s sought.
SECTION 3-9. Capacity — The facts showing the capacity of
a party to sue or be sued or the authority of a party to sue or be sued
in a representative capacity or the legal existence of an organized
association of person that is made a party, must be averred. A party
desiring to raise an issue as to the legal existence of any party or the
capacity of any party to sue or be sued in representative capacity,
shall do so by specific denial, which shall include such supporting
particulars as are peculiarly within the pleaders knowledge.
SECTION 3-10. Answer — Within twenty (20) days from service
of summons, the defendant shall file his answer to the complaint and
serve a copy thereof on the plaintiff. The answer shall contain the
affidavits of witnesses, and copies of documentary and other evidence,
if any. Affirmative and negative defenses not pleaded in the answer
shall be deemed waived, except for lack of jurisdiction and failure to
state a cause of action. Cross-claims and compulsory counterclaims not
asserted therein shall be considered barred. The answer to counterclaims
shall be filed within fifteen (15) days from service of the answer in
which they are pleaded.
SECTION 3-11. Effect of Failure to Answer — Should the
defendant fail to answer the complaint within the period above provided,
he shall be considered in default. The Hearing Officer shall, motu
proprio, proceed to render judgement granting the plaintiff such relief
as his pleading may warrant, unless the Hearing Officer in his
discretion requires the plaintiff to submit evidence which shall be
received ex parte.
SECTION 3-12. Reply and Rejoinder — Within fifteen (15)
days from the service of the answer, the plaintiff may rebut any matter
raised in the answer by way of a reply. A rejoinder on the matters
alleged in the reply may be submitted by the respondent within fifteen
(15) days from receipt of the reply. The reply and rejoinder shall
likewise contain the affidavits of witnesses, documentary and other
evidence in support thereof, if any.
SECTION 3-13. Inadmissibility of Affidavit, Document and Other Evidence
— The affidavits of the parties’ respective witnesses, documents, and
other supporting evidence shall be attached to the appropriate pleading.
A witness without the requisite affidavit shall not be allowed to
testify except an adverse party or hostile witness. Documents and other
evidence or copies thereof which are not attached to the pleadings shall
be inadmissible. However, the Hearing Officer may allow for compelling
reasons, the submission of affidavits and other documents as the parties
may prove necessary during the pre-trial which must be submitted not
later than five (5) days prior to the commencement of the trial.
Supporting affidavits shall be made on personal knowledge, shall set
forth such facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify on the matters
stated therein.
SECTION 3-14. Action or Defense Based on Document —
Whenever an action or defense is based upon a written instrument or
document, the substance of such instrument or document shall be set
forth in the pleading, and the original of a copy thereof shall be
attached to the pleading as an exhibit, which shall be deemed to be
admitted unless the adverse party, under oath, specifically denies them
and set forth what he claims to be the facts; but this provision does
not apply when the adverse party does not appear to be a party to the
instrument or when compliance with an order for an inspection of the
original instrument is refused.
SECTION 3-16. Specific Denial — The respondent must
specify each material allegation of fact the truth of which he does not
admit and, whenever practicable, shall set forth the substance of the
matters which he will rely upon to support his qualification of an
averment. Where the respondent desires to deny only a part or a
qualification of an averment, he shall specify so much of it as is true
and material and shall deny only the remainder. Where the respondent is
without knowledge or information sufficient to form a belief as to the
truth of material averment made in the complaint or petition, he shall
so state, and this shall have the effect of a denial, otherwise the
averment shall be deemed admitted.
SECTION 3-17. When Amendments Allowed as a Matter of Right
— A party may amend his pleading once a matter of right at any time
before a responsive pleading is served or, in case of a reply, at any
time within ten (10) days after it is served.
SECTION 3-18. Docket Fee and Other Fees — The docket fee
for filing a complaint or petition, complaint or petition in
intervention, unless otherwise provided by the Commission, shall be
one-tenth (1/10) of one percent (1%) of the amount claimed or prayed for
plus twenty percent (20%) of such amount, exclusive of interest, but
which shall not be less than one thousand pesos (1,000.00). Provided,
however, that if there is no claim for money, the docket fee shall be
one thousand pesos (P1,000.00). Provided, further, that in cases for
suspension of payments, rehabilitation, and involuntary dissolution the
docket fee shall be five thousand pesos (P5,000.00). Provided, finally,
that a complaint or petition shall be deemed filed only after the
payment of the required docket fees and all other fees which by law are
payable.
There shall also be collected as process service fee the amount of
one hundred pesos (P100.00) for every respondent named in the complaint
or petition. (amended)
RULE IV
Summons
SECTION 4-1. Summons — Upon the filing of the complaint
or petition, the corresponding summons to the respondent shall forthwith
be issued within Five (5) days from date of filing of the complaint.
Provided, however, that a summons shall not be issued in cases under the
Rules of Procedure for Corporate Recovery where the Petitioner is the
debtor. (amended ).
SECTION 4-2. Contents — The summons shall be directed to the respondent under the seal of the Commission, and shall contain:
a. The names of the parties to the action;
b. A direction that the respondent answer within the time fixed by these Rules; and
c. A notice that unless the respondent so answers, plaintiff
will take judgment by default and may be granted the relief applied for
as provided for in Rule III, Sec. 10 of these Rules.
SECTION 4-3. Alias Summon s — If summons is returned
unserved on any or all the respondents, or if it has been lost, the
Hearing Officer on demand of the petitioner or complainant may issue
alias summons as the case may require, in the same form as the original.
(amended)
SECTION 4-4. By Whom Summons May Be Served — The summons
may be served by the process serves of the Commission, or for special
reasons by any person specially authorized by Hearing Officer.
SECTION 4-5. Return of Summons — When the service has
been completed, the process server shall return the summons to the
Commission attached to the proof of service.
SECTION 4-6. Personal Service of Summons — The summons
shall be served by handing a copy thereof to the respondent in person or
if he refuses to receive it, by tendering it to him. If the respondent
is a corporation, partnership or association organized and registered
under the laws of the Philippines, service must be made on the
President, Manager, Corporate Secretary, or any authorized directors or
officers.
SECTION 4-7. Substituted Service — If, for justifiable
causes, the respondent cannot be served personally with the summons as
provided in the preceding section, service may be effected, (a) by
leaving copies of the summons at the respondent’s dwelling house or
residence with some person of suitable age and discretion then residing
therein, or (b) by leaving the copies of respondent’s principal office
or regular place of business with some competent person in charge
thereof.
SECTION 4-8. Service Upon Private Foreign Entities — If
the respondent is a foreign corporation, partnership or association
doing business in the Philippines, service may be made on its resident
agent designated in accordance with law for that purpose, or, if there
be no such agent, on the government officials designated by law to that
effect or on any of its officers or agents within the Philippines. The
government official designated by law for the service of summons shall
in turn transmit a copy of the summons to the home office of said
respondent foreign entity by registered mail. The time to answer shall
be thirty days (30) days from receipt thereof by the home office,
expenses incurred by the said government official for such service shall
be paid in advance by the parties at whose instance the service was
made. (amended).
SECTION 4-9. Service by Publication — When the address of
a respondent is unknown or even if known, whereabouts cannot be
ascertained by diligent inquiry, service of summons may, by leave of the
Commission, be effected upon him by publication of the complaint or
petition once in a newspaper of general circulation and in such places
and for such time as the Commission may order. The publication expenses
shall be defrayed by the petitioner or complainant. Likewise, when the
respondent does not reside or is not found in the Philippines, service
may, by leave of the Commission, be effected out of the Philippines by
personal service in the manner provided under Section 6 hereof, and
which may be effected through the Office of the Department of Foreign
Affairs; or by publication of the complaint or petition once in a
newspaper of general circulation and in such places as the Commission
may order. A copy of the complaint or petition as well as the order
granting such leave shall be sent by registered mail to the last known
address of the respondent.
Any order granting such leave shall specify a reasonable time which
shall not be less than thirty (30) days from the date of last
publication, in case of a resident respondent whose address is unknown
or whose whereabouts cannot be ascertained and not less than sixty (60 )
days from the date of last publication, in case of non-resident
respondent, within which the respondent must answer.
Any application to the Commission for leave to effect service of
summons by publication shall be made by motion in writing, supported by
affidavit of the petitioner or complainant or some person on his behalf,
setting forth the grounds for the application. (amended).
SECTION 4-10. Service by Publication in Action for Suspension or
Revocation of Franchise of a Corporation Instituted by the Prosecution
and Enforcement Department — In actions for suspension or
revocation of franchise of a corporation instituted by the Prosecution
and Enforcement Department at the request and upon the relation of
another person when the address of respondent is unknown or even if
known, his whereabouts cannot be ascertained by diligent inquiry,
service of summons, may, by leave of the Commission, be effected upon
the respondent by publication of the complaint or petition and the order
granting such leave once in a newspaper of general circulation. The
publication expenses shall be defrayed by the person at whose request
and upon whose relation the same is bought.
SECTION 4-11. Proof of Service — The proof of service of a
summons should be made in writing by the server setting forth the
manner, the place and the date of service; its shall specify any papers
which have been served with the process and the name of the person who
received the same; and shall be sworn to when made by a person other
than the server of the Commission.
When the service has been made by publication on a resident
respondent whose address is unknown or whose whereabouts cannot be
ascertained, service may be proved by the affidavit of the printer,
editor or business or advertising manager and to which affidavit a copy
of such publication shall be attached.
When the service has been made by publication on a non-resident
respondent, service may be proved, aside from the affidavit of the
printer, editor or business or advertising manager, by the affidavit of
the server that a copy of the complaint or petition and the order of the
Commission was sent by registered mail to the last known address of the
respondent.
The respondent’s voluntary appearance before the Commission shall be
equivalent to service for purposes of acquiring jurisdiction over his
person, unless he makes an explicit reservation thereto.
RULE V
Proceeding Before the Designated Hearing Officer
SECTION 5-1. Preliminary Conference — In any action, the
Hearing Officer shall set the case for preliminary conference within ten
(10) days after the last pleading is filed, and the parties and their
attorneys shall be directed to submit a pre-trial brief and to appear
before the Hearing Officer on the date set on the notice, to consider,
based on the affidavits, documents and other evidence submitted by the
parties:
a. The possibility of an amicable settlement;
b. The simplification of the issues;
c. Schedule hearing which must be undertaken continuously as schedule until completed and terminated; and
d. Such other matters as may aid in the just and speedy disposition of the case.
The Hearing Officer shall terminate the preliminary conference ten
(10) days after its commencement, whether or not the parties have agreed
to settle their differences. (amended)
SECTION 5-2. Amicable Settlement — During the preliminary
conference, the Hearing Officer shall take the initiative in seeing to
it that the parties exhaust all available means to arrive at a fair and
reasonable settlement of the case. The parties, on the other hand, shall
be prepared to present during the preliminary conference specific
proposals or counter-proposals to effect such settlement.
Amicable settlement shall always be encouraged, even at the stage of
the proceedings, provided it shall not be prejudicial to the public
interest or to third parties or contrary to law, rules or regulations of
the Commission nor against the good morals or public policy. The
amicable settlement shall, as far as practicable, be reduced into
writing, duly signed by the parties and/or their counsels, which shall
be the basis of the corresponding order or decision of the Hearing
Officer.
SECTION 5-3. Failure to Appear at Preliminary Conference —
The failure of the plaintiff to appear in the preliminary conference
shall lead to a dismissal of his petition. The defendant who appears in
the absence of the plaintiff shall be entitled to judgment on his
counterclaim based on the facts alleged and limited to what is prayed
for in the answer. Provided, however, that the Hearing Office may, in
his discretion, reduce the amount of damages and attorney’s fees claimed
for being excessive or otherwise unconscionable.
If a sole defendant shall fail to appear, the plaintiff shall be
entitled to judgment in accordance with the preceding paragraph. This
rules shall not apply where one or more defendants sued under a common
cause of action who had pleaded a common defense shall appear at the
preliminary conference.
SECTION 5-4. Hearings — Should the Hearing Officer find
upon consideration of the pleadings, the affidavits and other evidences
and position statements submitted by the parties that a judgment may be
rendered thereon without the need of a formal hearing, he may proceed to
render judgment.
In cases where the Hearing Officer deems it necessary to hold a
hearing to clarify specific factual matters before rendering judgment,
he shall set the case for hearing for the purpose. At such hearing, only
witnesses whose affidavits were submitted may be asked clarificatory
questions by the Hearing Officer and may be cross examined by the
adverse party.
SECTION 5-5. Preliminary Conference Order — After the
preliminary conference, the Hearing Officer shall issue an Order
reciting the action taken at the conference; the stipulations made by
the parties as to any of the matters considered; a recital of such other
evidence as the parties may have agreed upon; the witnesses, if any, to
be presented by all the parties; and the scheduled dates of hearings if
any shall be commenced not later than fifteen (15) days from the date
of the termination of the preliminary conference. The hearing, if any
shall be set for successive and continuous daily trial and completed
within 60 days from the date of the first hearing, 30 days to be alloted
to complainant and 30 days for the respondents. Provided, further, that
the failure of a party to present a witness or witnesses on a scheduled
hearing date shall be deemed a waiver of such hearing date. Provided,
finally, that a party may present such witness or witnesses within the
remaining hearing dates. (amended)
SECTION 5-6. Submission of Draft Decisions — Within
fifteen (15) days after the submission of case for resolution, the
parties shall submit a draft of the decision or resolution they seek,
stating clearly and distinctly the facts and the law upon which it is
based. The Hearing Officer may adopt, in whole or in part, either of the
parties’ draft decision or resolution, or reject both. At the
discretion of the Hearing Officer, this requirement may likewise apply
to orders other than the final judgment. (amended)
RULE VI
Decision
SECTION 6-1. Decision — The Hearing Officer shall render a
decision within thirty (30) days from submission of the decision. The
draft decision shall contain clearly and distinctly a statement of the
facts proved or admitted by the parties and the law upon which the
judgment is based. (amended)
SECTION 6-2. Finality of Decision — The decision of the
Hearing Officer, in the absence of appeal therefrom, shall become final
and executory fifteen (15) days from the date of receipt thereof.
RULE VII
Contempt
SECTION 7-1. Direct Contempt — A person guilty of
misbehavior in the presence of or so near the Hearing Officer as to
obstruct or interrupt the proceedings before him, including disrespect
towards the Hearing Officer, offensive personalities towards others, or
refusal to be sworn to or answer as a witness, or to subscribe an
affidavit or deposition when lawfully required to do so, may be
summarily adjudged in contempt by the Hearing Officer and punished by
fine not exceeding one thousand pesos (P1,000.00) or imprisonment not
exceeding ten (10) days, or both such fine and imprisonment. The Hearing
Officer may require the Sheriff or other police agencies of the
locality where the hearing or investigation is conducted, to assist in
the enforcement of this action.
SECTION 7-2. Indirect Contempt — Any person who shall
fail or refuse to comply with the promulgated decision, order or writ of
the Hearing Officer without justifiable cause after being required to
do so, shall be punished for contempt pursuant to the applicable
provisions of the New Rules of Court.
RULES VIII
Subpoena and Subpoena Duces Tecum
SECTION 8-1. When Issued — If the attendance of a witness
or the production of clearly specified documents is necessary, any
party may request the issuance of a subpoena or subpoena duces tecum
before or during the scheduled preliminary conference. Provided,
however, that a subpoena may only be issued if the witness or document
sought to be subpoenaed has been previously referred to or stated in the
petition/complaint, the answer or any subsequent pleadings including
the pre-trial. Provided further, that upon request of any party, the
Hearing Officer, may in his discretion issue a subpoena during the
hearing for justifiable reasons.
RULE IX
Production or Inspection of Documents or Things
SECTION 9-1. Motion for Production or Inspection Order —
Upon motion of any party showing good cause therefor, the Hearing
Officer may (a) order any party to produce and permit the inspection and
copying or photographing, by or on behalf of the moving party, of any
designated documents, papers, books, accounts, letter, photographs,
objects or tangible things, not privileged, which constitute or contain
evidence material to any matter involved in the action and which are in
his possession, custody or control; or (b) order any party to permit
entry upon designated land or other property in his possession or
control for the purpose of inspecting, measuring, surveying, or
photographing the property or any designated relevant object or
operation thereon. The order shall specify the time, place and manner of
making the inspection and taking copies and photographs, and may
prescribe such terms and conditions as are just. Provided, however, that
request for the production or inspection of documents or things shall
be made before or during the preliminary conference and only for
documents and things previously referred to in the complaint/petition,
answer, reply, or rejoinder.
TITLE II
RULE X
Provisional Remedies
SECTION 10-1. Proceedings on Provisional Remedies —
Provisional Remedies applied for by any of the parties shall be heard
and resolved by the hearing officer within twenty (20) days from
application. If the hearings thereon are not completed within that
period for any reason whatsoever, the Hearing Officer shall resolve the
matter on the basis of whatever evidence is available from the records
of the case. (new)
RULE XI
Preliminary Injunction
SECTION 11-1. Issuance of Preliminary Injunction — A
preliminary injunction may be granted by the Hearing Officer, upon bond
filed with the Commission to be fixed by the Hearing Officer, at any
time after the commencement of the action and before judgment when it is
established after notice and hearing:
a. That the applicant is entitled to the relief demanded,
and the whole or part of such relief consists in restraining the
commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period
of perpetually;b. That the commission, continuance or non-performance of
the act or acts complained of during the litigation would probably work
injustice to the applicant; orc. That a party, court, agency or person is doing,
threatens, or is about to do, or is procuring or suffering to be done,
some act probably in violation of the rights of the applicant respecting
the subject of the action, and tending to render the judgment
ineffectual.
SECTION 11-2. Objection to, or Dissolution of, Injunction —
The application for injunction may be denied upon a showing of its
insufficiency. It may also be denied, or, if granted, may be dissolved
on other grounds upon affidavit of the party or person enjoined, which
may be opposed by the applicant also by affidavits. It may further be
denied, or, if granted, may be dissolved, it if appears after hearing
that although the applicant is entitled to the injunction, the issuance
or continuance thereof, as the case may be, would cause irreparable
damage to the party or person enjoined while the applicant can be fully
compensated for such damages as he may suffer, and the former files a
bond in an amount fixed by the Hearing Officer conditioned that he will
pay all damages which the applicant may suffer by the refusal or the
dissolution of the injunction. If its appears that the extent of the
preliminary injunction granted is too great, it must be modified.
SECTION 11-3. Final Injunction — If after the trial of the
action it appears that the applicant is entitled to have the act or acts
complained of permanently enjoined, the Hearing Officer shall grant a
final injunction perpetually restraining the party or person enjoined
from the commission or continuance of the act or acts or confirming the
preliminary mandatory injunction.
SECTION 11-4. Temporary Restraining Order Ex-parte — Any
complaint or initiatory pleading which contains a prayer for the
issuance of a temporary restraining order (TRO) shall be referred to the
Chairman or in his absence, the most senior Associate Commissioner, for
appropriate action. If the Chairman or Associate Commissioner
determines, in his discretion, that the matter is of extreme urgency
such that unless a TRO is issued grave injustice and irreparable injury
will arise, he may forthwith issue a TRO effective only for seventy-two
(72) hours from issuance. The parties shall immediately be summoned and
the case set for raffle to a Hearing Officer in their presence
(amended).
SECTION 11-5. Summary Hearing — Before the expiry of the
seventy-two (72) hours, the Hearing Officer/Panel to whom the case was
raffled shall conduct a summary hearing wherein all parties shall be
given an opportunity to argue orally or in writing to determine whether
the TRO shall be extended for the remaining seventeen (17) days. In case
where no seventy-two (72) hour-TRO has been issued, action upon the
application for TRO shall be taken by the Hearing Officer/Panel only
after a summary hearing within twenty-four (24) hours after the case is
transmitted to him after the raffle.
SECTION 11-6. When Hearing Deemed Conducted — The summary
hearing shall be deemed to have been conducted when the adverse party or
his counsel has been given the opportunity to oppose the application
for TRO whether orally or in writing. Provided, however, that the
failure on the part of the adverse party or counsel to oppose the
application shall be deemed a waiver of his right to be heard thereon.
In which case, the application for TRO shall be deemed submitted for
resolution.
SECTION 11-7. Application for Preliminary Injunction —
During the period of the effectivity of the TRO, the application for
writ of preliminary injunction, if any, shall be heard and resolved by
the Hearing Officer/Panel assigned to the case. If the hearings thereon
are not completed within the period of the effectivity of the TRO for
any reason whatsoever, the Hearing Officer/Panel shall resolve the
application for preliminary injunction on the basis of whatever evidence
is available from the records of the case.
SECTION 11-8. Applications for TRO after Commencement of the Action
— At any time after the commencement of the action but before judgment,
the SICD Director or his assistant in his absence, shall act on any
application for TRO ex parte by any of the parties. Thereafter, the
proceedings provided in summary hearing in the preceding sections shall
apply. (amended).
SECTION 11-9. Prohibitions — Any motion that would delay
the resolution of the application for TRO is prohibited. A petition for
Certiorari with respect to the issuance of the seventy-two (72) -TRO is
likewise prohibited.
RULE XII
Preliminary Attachment
SECTION 12-1. Preliminary Attachment — At the commencement or at
any time before entry of judgment, the complainant or petitioner o
r any proper party may have the property of the adverse party attached
as security for the satisfaction of judgment that may be recovered in
those cases analogous to those expressly provided under Rule 57
(Preliminary Attachment) of the Rules of Court.
SECTION 12-2. Issuance and Contents of Order — An order of
attachment may be issued upon motion with notice and hearing by the
Hearing Officer where the action or claim is pending, and must required
the sheriff of the Commission to attach so much of the property in the
Philippines of the party against whom it is issued, not exempt from
execution, as may be sufficient to satisfy the applicant’s demand,
unless such party makes deposit or gives a bond in an amount equal to
that fixed in the order, which may be the amount sufficient to satisfy
the applicant’s demand or the value of the property to be attached as
stated by the applicant, exclusive of costs. Provided however that the
SICD Director or in his absence his assistant. may issue an order of
attachment ex-parte. (amended)
SECTION 12-3. Except as provided for in the preceding
sections, all provisions of Rule 57 of the Rules of Court shall apply as
far as practicable.
RULE XIII
Receivers
SECTION 13-1. Appointment of Receiver — Upon verified
petition, one or more receivers of the property, real or personal which
is the subject of the action or claim, may be appointed by the Hearing
Officer after notice and hearing in the following cases:
a. When a corporation has been dissolved, or is insolvent,
or is in imminent danger of insolvency, or has forfeited its corporate
rights;b. When it appears from the complaint or answer, and such
other proof as the Hearing Officer may require, that the party applying
for the appointment of receiver has an interest in the property or fund
which is the subject of the action or claim, and that such property or
fund is in danger of being lost, removed, or materially injured unless a
receiver be appointed to guard and preserve it; andc. Whenever in other cases it appears that the appointment
of the receiver is the most convenient and feasible means of
preserving, administering, or disposing of the property in litigation.
SECTION 13-2. Bond on Appointment of Receiver — Before
issuing the order appointing a receiver the Hearing Officer shall
require the applicant to file a bond executed to the party against whom
the application is presented, in an amount to be fixed by the Hearing
Officer, to the effect that the applicant will pay such party all
damages he may sustain by reason of the appointment of such receiver in
case the applicant shall have procured such appointment without
sufficient cause; and the Hearing Officer may, in his discretion, at any
time after the appointment, require an additional bond as further
security for such damages.
SECTION 13-3. Denial of Application or Discharge of Receiver
— The application may be denied, or the receiver discharged, when the
adverse party files a bond executed to the applicant, in an amount to be
fixed by the Hearing Officer, to the effect that such party will pay
the applicant all damages he may suffer by reason of the acts,
omissions, or other matters specified in the application as ground for
such appointment. The receiver may also be discharged if it is shown
that his appointment was obtained without sufficient cause.
SECTION 13-4. Oath and Bond Receiver — Before entering upon
his duties, the receiver shall be sworn to perform them faithfully, and
shall file a bond, executed to such person and in such sum as the
Hearing Officer may direct, to the effect that he will faithfully
discharge his duties in the action or proceeding and obey the orders of
the Commission (new).
RULE XIV
Management Committee
SECTION 14-1. Appointment of Management Committee — The
Hearing Officer may, upon verified petition or motu propio, create and
appoint a management committee to undertake the management of
corporations, partnerships or other associations when there is imminent
anger of dissipation, loss, wastage or destruction of assets or other
properties or paralization of business operations of such corporations
or entities which may be prejudicial to the interest of minority
stockholders, parties-litigants or the general public.
TITLE III
RULE XIV
Election Contest
SECTION 14-1. To What Cases Applicable — The provisions under this rule shall apply to election contest in stock or non-stock corporations, respectively.
An election contest shall mean any controversy or dispute involving
title or claim to any elective office in a stock or non-stock
corporation, the validation of proxies, the manner of elections, and the
qualifications of candidates, including the proclamation of winners to
the office of directors or trustees or other officers directly elected
by the stockholders in a close corporation or by members in a non-stock
corporation when the Articles of Incorporation or By-laws so provides.
It is filed by a stockholder or member of record as of the date of
the election on the grounds of fraud, irregularities and illegal acts
committed before, during, after the casting, counting of votes and
declaration of results thereof. (amended)
SECTION 14-2. Duty of the Hearing Officer Upon the Filing of the Complaint or Petition — Upon the filing of the complaint or petition, the Hearing Officer from a consideration of the allegations thereof:
a. May dismiss the complaint or petition outright due to:
1. failure to file the case within fifteen (15) days from
the date of the election if the by-laws do not provide for a procedure
for resolution, or within fifteen (15) days from the resolution of the
controversy by the corporation as may be provided for in its by-laws;2. failure to exhaust intra-corporate remedies in election
protests as may be provided for in the corporation’s by-laws; orb. May order the issuance of summons.
SECTION 14-3. Answer — Upon being served with summons, the
respondent must answer the complaint or petition within ten (10) days
from service thereof which will include all available grounds for a
motion to dismiss. The answer to a compulsory counterclaim must be filed
within ten (10) days from service thereof.
SECTION 14-4. Effect of Failure to Answer — Upon failure
to answer the complaint or petition within the reglementary 10-day
period herein provided, the Hearing Officer motu proprio or on motion,
shall render judgment as may be warranted by the facts alleged in the
complaint or petition, or compulsory counterclaim.
SECTION 14-5. Preliminary Conference — Not later than ten
(10) days after the answer is filed, a preliminary conference shall be
held, during which the parties as well as their respective counsel shall
be present.
The parties shall submit a pretrial brief at least three (3) days before the preliminary conference which shall include:
a. any proposal for an amicable settlement;
b. simplified issues of the case;
c. facts and documents sought to be admitted or stipulated on;
d. number and names of witnesses, and brief statement of their testimony; and TACEDI
e. such other matters as may aid in the prompt disposition of the petition.
Any party who fails to attend the preliminary conference, shall be dealt with in accordance with Section 5.3 these Rules.
After the preliminary conference, the Hearing Officer shall
immediately issue a preliminary conference order specifying the matters
taken up during the conference. (amended)
SECTION 14-6. Judgment; Hearing, When Ordered — Upon a
consideration of the pleadings, the affidavits and other evidences, and
position statements submitted by the parties, the Hearing Officer shall
proceed in accordance with Section 4 Rule 5 of these rules.
SECTION 14-7. Prohibited Pleadings and Motions — The following pleadings, motions or petitions shall not be allowed:
a. Motion to Dismiss;
b. Motion for a Bill of Particulars;
c. Motion for New Trial or for Reconsideration;
d. Petition for Relief from Judgment;
e. Motion for Extension of Time to File Pleadings, Affidavits or any Other Paper;
f. Memorandum;
g. Petition for Certiorari, Mandamus or Prohibition against any Interlocutory Order of the Hearing Officer;
h. Motion to Declare Respondent in Default;
i. Motion for Postponement;
j. Reply or Rejoinder;
k. Third Party Complaint; and
l. Intervention.
SECTION 14-8. Affidavits — The affidavits required to be
submitted under this rule shall state only facts of direct personal
knowledge of the affiants which are admissible in evidence and shall
show their competence to testify to the matters stated therein.
A violation of this requirement may subject the party or the counsel
who submits the same to disciplinary action and shall be caused to
expunge the inadmissible affidavit or portions thereof from the record.
SECTION 14-9. Hearing and Judgment — In cases where a
hearing is ordered, the same must be finished on the same date set
therefor, insofar as practicable. The judgment in the case must be
rendered within fifteen (15) working days from termination of the
hearing.
SECTION 14-10. Decision Immediately Executory — The Decision of the Hearing Officer shall be immediately executory unless stayed by the Commission En Banc.
RULE XV
Petition For Review Of Certiorari
SECTION 15-1. Petition for Review or Certiorari — When any
Hearing Officer/Panel of the Commission, has acted without or in excess
of its jurisdiction, or with grave abuse of discretion and there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a verified petition
with the Commission En Banc alleging the facts with certainty and
praying that judgment be rendered annulling or modifying the
proceedings, order or ruling as the law requires, of such Hearing
Officer or Panel of Hearings Officers.
The Petition shall be accompanied by a certified true copy of the
judgment, order, or ruling subject thereof, together with copies of all
pleadings and documents relevant thereto. Provided that no petition for
review or certiorari shall be given due course unless it includes a
certification non-filing of multiple petitions and complaints provided
for in Section 3-4 of the Revised Rules of Procedure 2000 of the
Securities and Exchange Commission (New).
SECTION 15-2. Where petition filed — The petition shall be
filed with the Clerk of the Commission En Banc in seven (7) copies,
within ten (10) days from receipt of the order or ruling subject of the
petition, furnishing a copy thereof to the party interested in
sustaining the order and the Hearing Officer/Panel who issued the same.
(New)
SECTION 15-3. Docket Fee — Unless otherwise provided by the
Commission, the docket fee shall be Two Thousand Pesos (P2,000) and
Five Thousand Pesos (P5,000) for cases of suspension of payments (New).
SECTION 15-4. Parties Respondent — When the Petition filed
relates to the acts or omission of a Hearing Officer of the Commission
the petitioner shall join, as parties respondent, the person or persons
interested in sustaining the order; and its shall be the duty of such
person or persons to defend the questioned order or ruling (New).
SECTION 15-5. Order to Answer — If the Petition is
sufficient in form and substance to justify such process, the Commission
En Banc shall issue an order requiring the respondents to answer the
petition within ten (10) days from receipt of a copy thereof. Such order
shall be served on the respondent in such manner as the Commission en
Banc may direct. (New).
SECTION 15-6. Expediting proceedings. Preliminary Injunction
— The Commission En Banc in which the petition is filed may make orders
expediting the proceedings and may also grant a preliminary injunction
for the preservation of the rights of the parties pending such
proceedings. (new)
SECTION 15-7. Summary Proceedings — The proceedings before
the Commission En Banc shall be summary in nature. Upon receipt of the
verified petition, the Commission En Banc may either dismiss the
petition if it is not sufficient in form and substance or is filed
manifestly for delay or if from its face there is no showing that in
issuing the questioned Order/Ruling, the Hearing Officer has acted
without or in excess of his jurisdiction, or has acted with grave abuse
of discretion. It may require the party or parties interested in
sustaining the questioned Order/Ruling, to Comment/Answer thereon within
ten (10) days from notice upon the filing of which the petition is
deemed submitted for resolution, unless the Commission En Banc sets the
case for oral arguments. (new)
SECTION 15-8. Stay of the Action — No petition for review
or certiorari shall stay the progress of the action in the main case
unless a restraining order is issued by the Commission En Banc enjoining
the further hearing of the main case and, in which event, the
Commission En Banc may also issue such order for the preservation of the
rights of the parties during the pendency of the proceedings. (new)
RULE XVI
Appeal
SECTION 16-1. Decision, Order or Ruling Subject to Appeal — Only final decision, orders or ruling shall be subject to appeal to the Commission En Banc.
No interlocutory or incidental order shall stay the progress of an
action, nor shall it be the subject of appeal for one party or the other
or ruling is rendered for one party or the other, except as provided in
Rule XV hereof. (New)
SECTION 16-2. How Appeal is Taken — Appeal may be taken by
serving upon the adverse party and filing with the Commission En Banc
within fifteen (15) days from notice of Decision, Order or Ruling, a
notice of appeal and a memorandum on appeal and paying the corresponding
docket fee therefore. Provided, that no appeal shall be given due
course unless it includes a certification of non-filing of multiple
petitions and complaints provided for in Section 3.3 (new)
SECTION 16-3. Perfection of Appeal — The appeal is deemed
perfected upon the filing of notice of appeal, memorandum on appeal and
payment of the required docket fee within the period provided for in
this Rules. (new)
SECTION 16-4. Notice of Appeal — The notice of appeal shall
specify the parties to the appeal designate the Decision, Order, Ruling
or part thereof, appealed from; and shall indicate the material dates
to show that the appeal was seasonably filed. (new)
SECTION 16-5. Memorandum on Appeal; form And Contents Thereof
— The full names of all the parties to the proceedings shall be stated
in the caption of the memorandum on appeal and shall include the
decision, order, or ruling from which the appeal is taken, and in,
chronological order, copies of only such pleadings, petition, motions
and all interlocutory orders as are related to the appealed decision,
order, or ruling and necessary for the proper understanding of the
issue/s involved, together with such date as will show that the appeal
was perfected on time. The memorandum on appeal in seven (7) copies
shall contain a concise statement of the facts and issues involved, the
errors assigned, the ground relied upon for the appeal and the arguments
in support thereof. (new)
SECTION 16-6. Appeal Fee — Unless otherwise provided by the
Commission, a fee of Two Thousand (2,000) Pesos shall be charged for
every appeal to the Commission en banc. Provided however, that cases
involving Petition for Suspension of Payments shall be Five Thousand
(5,000) Pesos.
SECTION 16-7. Reply Memorandum — The appellee shall file
seven (7) copies of the reply memorandum with the Clerk of the
Commission En banc, furnishing copy thereof to the appellant, within ten
(10) days from receipt of the memorandum of appeal.
Failure to file said reply memorandum within the period herein specified shall be construed a waiver to file the same. (new)
SECTION 16-8. Dismissal of Appeal for Non-Compliance — The
appeal may be dismissed by the Commission En ban for failure to comply
with this Rules, or if it is not perfected within the period provided
herein, or if the decision, order or ruling appealed from is not
appealable under the rules. (new).
SECTION 16-9. When Appeal Deemed Submitted for Decision —
Upon the filing of the reply memorandum with the Commission En banc, or
after the expiration of the period to file the same and no such
memorandum has been filed, the appeal shall be deemed submitted for
decision, unless the Commission En banc motu propio, or upon proper
motion and for special reason, sets the case for oral arguments. (new)
SECTION 16-10. Standard Review — Factual Findings
of the hearing officer below shall remain undisturbed unless the
Commission En banc finds that clear error has been committed. (new)
SECTION 16-11. Disposition of Appeal — The
Commission En banc, in the exercise of its appellate jurisdiction, may
affirm, reverse or modify, the decision, order or ruling appealed from,
or may direct further proceedings to be taken. No Motion for
Reconsideration of the Order or Decision of the Commission En banc shall
be entertained. (new)
RULE XVII
Conduct of Parties and Hearing Officers
SECTION 17-1. Code of Ethics — Hearing Officers and Commissioners shall comply with the Code of Ethics for Hearing Officer attached herein as “Annex A” [*] (new)
SECTION 17-2. Prohibition of Ex-parte Communication — No
person who is a party to or an agent of a party to any proceedings
before the Commission shall make or knowingly cause to be made to a
hearing officer in such proceeding an ex parte communication relevant to
the merits of the proceeding.
Any Hearing Officer who receives an ex-parte communication shall
transmit such communication to the Records Officer, SICD Records Unit.
Such materials shall be made part of the public docket of such
proceeding.
Ex-parte communication shall include an oral or written
communication on any matter relevant to a proceeding before a hearing
officer in which other parties to the proceeding are not privy to and
were not given reasonable prior notice thereof. (new)
RULE XVIII
Effectivity
SECTION 17-2. [*] [*] Repeal and Separability
— All existing rules, regulations or orders or any part thereof
inconsistent with this Rules are hereby repealed, amended or modified
accordingly. If any part or provision of these Rules is declared
unconstitutional or illegal, the other parts or provisions shall remain
valid.
SECTION 17-1. [*] [*] Effectivity — These Rules shall take effect fifteen (15) days after publication in a newspaper of general circulation.
Adopted: 30 May 2000
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(SGD.) LILIA R. BAUTISTA |
(SGD.) FE ELOISA C. GLORIA |
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(SGD.) EDIJER A. MARTINEZ |
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(SGD.) ROSALINDA U. CASIGURAN |
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(SGD.) DANILO L. CONCEPCION |
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[*] Annex “A” hereof not filed with ONAR.
[*] [*]
Sections 17-2 and 17-1 of Rule XVIII above erroneously numbered by the
filing agency. They should be Sections 18-1 and 18-2. Please note also
that 17-2 (of the same Rule XVIII) came ahead of Section 17-1
[*] [*] Sections
17-2 and 17-1 of Rule XVIII above erroneously numbered by the filing
agency. They should be Sections 18-1 and 18-2. Please note also that
17-2 (of the same Rule XVIII) came ahead of Section 17-1