Case Digest: LEPANTO CONSOLIDATED MINING COMPANY v. WMC RESOURCES INTERNATIONAL PTY. LTD. and WMC (PHILIPPINES), INC.

LEPANTO CONSOLIDATED MINING COMPANY v. WMC RESOURCES INTERNATIONAL PTY. LTD. and WMC (PHILIPPINES), INC.

412 SCRA 101 (2003), THIRD DIVISION

In a contract denominated as “Tampakan Option Agreement”, respondent WMC Resources International Pty. Ltd. (WMC), through its local subsidiary Western Mining Corporation (Philippines), Inc. (WMCP), acquired the mining claims in Tampakan, South Cotabato of the Tampakan Companies. The “Tampakan Option Agreement” was amended by subsequent agreements under which the Tampakan Companies were given preferential option to acquire the shares of WMC in WMCP and Hillcrest Inc. in the event WMC decided to sell them. WMC, by a Sale and Purchase Agreement, sold to Lepanto Consolidated Mining Company (Lepanto) its shares of stock. As the Tampakan Companies later availed of their preferential right under the “Tampakan Option Agreement,” a Sale and Purchase Agreement was concluded between WMC and the Tampakan Companies over the same shares of stock priorly purchased by Lepanto.

The Tampakan Companies notified the Director of the Mines and Geosciences Bureau (MGB) of the DENR of the exercise of their preemptive right to buy WMC‘s equity in WMCP and Hillcrest, Inc. Lepanto wrote the DENR Secretary about the invalidity of said agreement and reiterated its request for the approval of its acquisition of the disputed shares.

Lepanto subsequently filed before the Regional Trial Court (RTC) of Makati a complaint against WMC, WMCP, Tampakan Companies. WMC et al. filed before the RTC a Joint Motion to Dismiss on the ground of forum shopping. The RTC denied WCM et al.‘s Motion to Dismiss. On appeal, the CA granted the petition of respondents ruling that Lepanto is guilty of forum shopping. Petitioners filed a motion for reconsideration with the CA. The CA denied said motion.

ISSUE:

Whether or not Lepanto is guilty of forum shopping

HELD:

It is clear from the proceedings before the DENR, specifically before the MGB, that the issue of which –– between petitioner and respondent Tampakan Companies –– possesses the better right to acquire the mining rights, claims and interests held by WMC through its local subsidiary WMCP, especially with respect to the 1995 FTAA, had been brought to the fore. The MGB cannot just assess the qualifications of petitioner and of the Tampakan Companies as potential transferee or assignee of the rights and obligations of WMCP under the FTAA without also resolving the issue of which has priority of right to become one.

True, the questioned agreements of sale between Lepanto and WMC on one hand and between WMC and the Tampakan Companies on the other pertain to transfer of shares of stock from one entity to another. But said shares of stock represent ownership of mining rights or interest in mining agreements. Hence, the power of the MGB to rule on the validity of the questioned agreements of sale, which was raised by Lepanti before the DENR, is inextricably linked to the very nature of such agreements over which the MGB has jurisdiction under the law. Unavoidably, there is identity of reliefs that Lepanto seeks from both the MGB and the RTC.

Forum shopping exists when both actions involve the same transactions, same essential facts and circumstances and raise identical causes of actions, subject matter, and issues. Such elements are evidently present in both the proceedings before the MGB and before the trial court. The case instituted with the RTC was thus correctly ordered dismissed by the appellate court on the ground of forum shopping. Besides, not only did Lepanto commit forum shopping but it also failed to exhaust administrative remedies by opting to go ahead in seeking reliefs from the court even while those same reliefs were appropriately awaiting resolution by the MGB.