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RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
A.M.No.01204SCMarch13,2001
Re:PROPOSEDINTERIMRULESOFPROCEDUREGOVERNINGINTRACORPORATE
CONTROVERSIESUNDERR.A.NO.8799
RESOLUTION
INTERIMRULESOFPROCEDUREFORINTRACORPORATECONTROVERSIES
RULE1
GENERALPROVISIONS
SECTION1.(a)Casescovered.TheseRulesshallgoverntheproceduretobeobservedincivilcases
involvingthefollowing:
1. Devicesorschemesemployedby,oranyactof,theboardofdirectors,businessassociates,
officersorpartners,amountingtofraudormisrepresentationwhichmaybedetrimentaltothe
interestofthepublicand/orofthestockholders,partners,ormembersofanycorporation,
partnership,orassociation
2. Controversiesarisingoutofintracorporate,partnership,orassociationrelations,betweenand
amongstockholders,members,orassociatesandbetween,anyorallofthemandthe
corporation,partnership,orassociationofwhichtheyarestockholders,members,or
associates,respectively
3. Controversiesintheelectionorappointmentofdirectors,trustees,officers,ormanagersof
corporations,partnerships,orassociations
4. Derivativesuitsand
5. Inspectionofcorporatebooks.
(b) prohibition against nuisance and harassment suits. Nuisance and harassment suits are
prohibited.Indeterminingwhetherasuitisanuisanceorharassmentsuit,thecourtshallconsider,among
others,thefollowing:
1. Theextentoftheshareholdingorinterestoftheinitiatingstockholderormember
2. Subjectmatterofthesuit
3. Legalandfactualbasisofthecomplaint
4. Availabilityofappraisalrightsfortheactoractscomplainedofand
5. Prejudiceordamagetothecorporation,partnership,orassociationinrelationtotherelief
sought.
Incaseofnuisanceorharassmentsuits,thecourtmay,motopropriooruponmotion,forthwithdismissthe
case.
SEC.2.SuppletoryapplicationoftheRulesofCourt.TheRulesofCourt,insofarastheymaybe
applicableandarenotinconsistentwiththeseRules,areherebyadoptedtoformanintegralpartofthese
Rules.
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SEC.3.Construction. These Rules shall be liberally construed in order to promote their objective of
securingajust,summary,speedyandinexpensivedeterminationofeveryactionorproceeding.
SEC.4.Executorynatureofdecisionsandorders.AlldecisionsandordersissuedundertheseRules
shall immediately be executory. No appeal or petition taken therefrom shall stay the enforcement or
implementationofthedecisionororder,unlessrestrainedbyanappellatecourt.Interlocutoryordersshall
notbesubjecttoappeal.
SEC.5.Venue.AllactionscoveredbytheseRulesshallbecommencedandtriedintheRegionalTrial
Court which has jurisdiction over the principal office of the corporation, partnership, or association
concerned. Where the principal office of the corporation, partnership or association is registered in the
SecuritiesandExchangeCommissionasMetroManila,theactionmustbefiledinthecityormunicipality
wheretheheadofficeislocated.
SEC.6.Serviceofpleadings.Whensoauthorizedbythecourt,anypleadingand/ordocumentrequired
bytheseRulesmaybefiledwiththecourtand/orservedupontheotherpartiesbyfacsimiletransmission
(tax) or electronic mail (email. In such cases, the date of transmission shall be deemed to be prima
faciethedateofservice.
SEC.7.Signingofpleadings,motionsandotherpapers.Everypleading,motion,andotherpaperof
a party represented by an attorney shall be signed by at least one attorney of record in the attorneys
individualname,whoseaddressshallbestated.Apartywhoisnotrepresentedbyanattorneyshallsign
thepleading,motion,orotherpaperandstatehisaddress.
Thesignatureofanattorneyorpartyconstitutesacertificationbythesignerthathehasreadthepleading,
motion,orotherpaperthattothebestofhisknowledge,information,andbeliefformedafterreasonable
inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the
extension,modification,orreversalofexistingjurisprudenceandthatitisnotinterposedforanyimproper
purpose,suchastoharassortocauseunnecessarydelayorneedlessincreaseinthecostoflitigation.
If a pleading, motion, or other paper is not signed, it shall be stricken off the record unless it is promptly
signedbythepleaderormovant,afterheisnotifiedoftheomission.
SEC.8.Prohibitedpleadings.Thefollowingpleadingsareprohibited:
1. Motiontodismiss
2. Motionforabillofparticulars
3. Motionfornewtrial,orforreconsiderationofjudgmentororder,orforreopeningoftrial
4. Motionforextensionoftimetofilepleadings,affidavitsoranyotherpaper,exceptthosefiled
duetoclearlycompellingreasons.Suchmotionmustbeverifiedandunderoathand
5. Motionforpostponementandothermotionsofsimilarintent,exceptthosefiledduetoclearly
compellingreasons.Suchmotionmustbeverifiedandunderoath.
SEC.9.Assignmentofcases.AllcasesfiledundertheseRulesshallbetriedbyjudgesdesignatedby
theSupremeCourttohearanddecidecasestransferredfromtheSecuritiesandExchangeCommissionto
theRegionalTrialCourtsandfileddirectlywithsaidcourtspursuanttoRepublicActNo.8799,otherwise
knownastheSecuritiesandRegulationCod
RULE2
COMMENCEMENTOFACTIONANDPLEADINGS
SECTION1. Commencement of action. An action under these Rules is commenced by the filing of a
verifiedcomplaintwiththeproperRegionalTrialCourt.
SEC.2.Pleadingsallowed.TheonlypleadingsallowedtobefiledundertheseRulesarethecomplaint,
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answer, compulsory counterclaims or crossclaims pleaded in the answer, and the answer to the
counterclaimsorcrossclaims.
SEC. 3. Verification. The complaint and the answer shall be verified by an affidavit stating that the
affianthasreadthepleadingandtheallegationsthereinaretrueandcorrectbasedonhisownpersonal
knowledgeoronauthenticrecords.
SEC.4.Complaint.Thecomplaintshallstateorcontain:
1. thenames,addresses,andotherrelevantpersonalorjuridicalcircumstancesoftheparties
2. allfactsmaterialandrelevanttotheplaintiffscauseorcausesofaction,whichshallbe
supportedbyaffidavitsoftheplaintifforhiswitnessesandcopiesofdocumentaryandother
evidencesupportiveofsuchcauseorcausesofaction
3. thelaw,rule,orregulationreliedupon,violated,orsoughttobeenforced
4. acertificationthat(a)theplaintiffhasnottheretoforecommencedanyactionorfiledanyclaim
involvingthesameissuesinanycourt,tribunalorquasijudicialagency,and,tothebestofhis
knowledge,nosuchotheractionorclaimispendingtherein(b)ifthereissuchotheractionor
claim,acompletestatementofthepresentstatusthereofand(c)ifheshouldthereafterlearn
thatthesameorsimilaractionorclaimhasbeenfiledorispending,heshallreportthatfact
withinfive(5)daystherefromtothecourtand
5. thereliefsought.
SEC.5.Summons.Thesummonsandthecomplaintshallbeservedtogethernotlaterthanfive(5)days
fromthedateoffilingofthecomplaint.
a. Serviceupondomesticprivatejuridicalentities.Ifthedefendantisadomesticcorporation,
serviceshallbedeemedadequateifmadeuponanyofthestatutoryorcorporateofficersas
fixedbythebylawsortheirrespectivesecretaries.Ifthedefendantisapartnership,service
shallbedeemedadequateifmadeuponanyofthemanagingorgeneralpartnersorupon
theirrespectivesecretaries.Ifthedefendantisanassociation,serviceshallbedeemed
adequateifmadeuponanyofitsofficersortheirrespectivesecretaries.
b. Serviceuponforeignprivatejuridicalentity.Whenthedefendantisaforeignprivatejuridical
entitywhichistransactingorhastransactedbusinessinthePhilippines,servicemaybemade
onitsresidentagentdesignatedinaccordancewithlawforthatpurpose,or,iftherebeno
suchagent,onthegovernmentofficialdesignatedbylawtothateffect,oronanyofitsofficers
oragentswithinthePhilippines.
SEC. 6. Answer. The defendant shall file his answer to the complaint, serving a copy thereof on the
plaintiff,withinfifteen(15)daysfromserviceofsummons.
Intheanswer,thedefendantshall:
1. Specifyeachmaterialallegationoffactthetruthofwhichheadmits
2. Specifyeachmaterialallegationoffactthetruthofwhichhedoesnotadmit.Wherethe
defendantdesirestodenyonlyapartofanaverment,heshallspecifysomuchofitastrue
andmaterialandshalldenyonlytheremainder
3. Specifyeachmaterialallegationoffactastowhichtruthhehasnoknowledgeorinformation
sufficienttoformabelief,andthisshallhavetheeffectofadenial
4. Statethedefenses,includinggroundsforamotiontodismissundertheRulesofCourt
5. Statethelaw,rule,orregulationreliedupon
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6. Addresseachofthecausesofactionstatedinthecomplaint
7. Statethefactsuponwhichhereliesforhisdefense,includingaffidavitsofwitnessesand
copiesofdocumentaryandotherevidencesupportiveofsuchcauseorcausesofaction
8. Stateanycompulsorycounterclaim/sandcrossclaim/sand
9. Statethereliefsought.
Theanswertocounterclaimsorcrossclaimsshallbefiledwithinten(10)daysfromserviceoftheanswer
inwhichtheyarepleaded.
SEC.7.Effectoffailuretoanswer.Ifthedefendantfailstoanswerwithintheperiodaboveprovided,he
shall be considered in default. Upon motion or motu proprio, the court shall render judgment either
dismissingthecomplaintorgrantingthereliefprayedforastherecordsmaywarrant.Innocaseshallthe
courtawardareliefbeyondordifferentfromthatprayedfor.
SEC. 8. Affidavits, documentary and other evidence. Affidavits shall be based on personal
knowledge,shallsetforthsuchfactsaswouldbeadmissibleinevidence,andshallshowaffirmativelythat
the affiant is competent to testify on the matters stated therein. The affidavits shall be in question and
answerform,andshallcomplywiththerulesonadmissibilityofevidence.
Affidavits of witnesses as well as documentary and other evidence shall be attached to the appropriate
pleading Provided, however, that affidavits, documentary and other evidence not so submitted may be
attached to the pretrial brief required under these Rules. Affidavits and other evidence not so submitted
shallnotbeadmittedinevidence,exceptinthefollowingcases:
1. Testimonyofunwilling,hostile,oradversepartywitnesses.Awitnessispresumedprima
faciehostileifhefailsorrefusestoexecuteanaffidavitafterawrittenrequesttherefor
2. Ifthefailuretosubmittheevidenceisformeritoriousandcompellingreasonsand
3. Newlydiscoveredevidence.
Incaseof(2)and(3)above,theaffidavitandevidencemustbesubmittednotlaterthanfive(5)daysprior
toitsintroductioninevidence.
RULE3
MODESOFDISCOVERY
SECTION1.Ingeneral.Apartycanonlyavailofanyofthemodesofdiscoverynotlaterthanfifteen(15)
daysfromthejoinderofissues.
SEC.2.Objections.Anymodeofdiscoverysuchasinterrogatories,requestforadmission,productionor
inspection of documents or things, may be objected to within ten (10) days from receipt of the discovery
deviceandonlyonthegroundthatthematterrequestedispatentlyincompetent,immaterial,irrelevantor
privilegedinnature.
Thecourtshallruleontheobjectionsnotlaterthanfifteen(15)daysfromthefilingthereof.
SEC.3.Compliance.Compliancewithanymodeofdiscoveryshallbemadewithinten(10)daysfrom
receiptofthediscoverydevice,orifthereareobjections,fromreceiptoftherulingofthecourt.
SEC.4.Sanctions. The sanctions prescribed in the Rules of Court for failure to avail of, or refusal to
complywith,themodesofdiscoveryshallapply.Inaddition,thecourtmay,uponmotion,declareaparty
nonsuitedorasindefault,asthecasemaybe,iftherefusaltocomplywithamodeofdiscoveryispatently
unjustified.
RULE4
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PRETRIAL
SECTION1.Pretrialconferencemandatorynature.Withinfive(5)daysaftertheperiodforavailmentof,
andcompliancewith,themodesofdiscoveryprescribedinRule3hereof,whichevercomeslater,thecourt
shall issue and serve an order immediately setting the case for pretrial conference and directing the
partiestosubmittheirrespectivepretrialbriefs.Thepartiesshallfilewiththecourtandfurnisheachother
copiesoftheirrespectivepretrialbriefinsuchmannerastoensureitsreceiptbythecourtandtheother
partyatleastfive(5)daysbeforethedatesetforthepretrial.
Thepartiesshallsetforthintheirpretrialbriefs,amongothermatters,thefollowing:
1. Briefstatementofthenatureofthecase,whichshallsummarizethetheoryortheoriesofthe
partyinclearandconciselanguage
2. Allegationsexpresslyadmittedbyeitherorbothparties
3. Allegationsdeemedadmittedbyeitherorbothparties
4. Documentsnotspecificallydeniedunderoathbyeitherorbothparties
5. Amendmentstothepleadings
6. Statementoftheissues,whichshallseparatelysummarizethefactualandlegalissues
involvedinthecase
7. Namesofwitnessestobepresentedandthesummaryoftheirtestimonyascontainedintheir
affidavitssupportingtheirpositionsoneachoftheissues
8. Allotherpiecesofevidence,whetherdocumentaryorotherwiseandtheirrespective
purposes
9. Specificproposalsforanamicablesettlement
10. Possibilityofreferraltomediationorotheralternativemodesofdisputeresolution
11. Proposedscheduleofhearingsand
12. Suchothermattersasmayaidinthejustandspeedydispositionofthecase.
SEC.2.Natureandpurposeofpretrialconference.Duringthepretrialconference,thecourtshall,
withitsactiveparticipation,ensurethatthepartiesconsiderindetailallofthefollowing:
1. Thepossibilityofanamicablesettlement
2. Referralofthedisputetomediationorotherformsofdisputeresolution
3. Factsthatneednotbeproven,eitherbecausetheyaremattersofjudicialnoticeorexpressly
ordeemedadmitted
4. Amendmentstothepleadings
5. Thepossibilityofobtainingstipulationsandadmissionsoffactsanddocuments
6. Objectionstotheadmissibilityoftestimonial,documentaryandotherevidence
7. Objectionstotheformorsubstanceofanyaffidavit,orpartthereof
8. Simplificationoftheissues
9. Thepossibilityofsubmittingthecasefordecisiononthebasisofpositionpapers,affidavits,
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documentaryandrealevidence
10. Acompletescheduleofhearingdatesand
11. Suchothermattersasmayaidinthespeedyandsummarydispositionofthecase.
SEC.3.Termination.Thepreliminaryconferenceshallbeterminatednotlaterthanten(10)daysafter
itscommencement,whetherornotthepartieshaveagreedtosettleamicably.
SEC.4.Judgmentbeforepretrial.If,aftersubmissionofthepretrialbriefs,thecourtdeterminesthat,
uponconsiderationofthepleadings,theaffidavitsandotherevidencesubmittedbytheparties,ajudgment
mayberendered,thecourtmayorderthepartiestofilesimultaneouslytheirrespectivememorandawithin
a nonextendible period of twenty (20) days from receipt of the order. Thereafter, the court shall render
judgment,eitherfullorotherwise,notlaterthanninety(90)daysfromtheexpirationoftheperiodtofilethe
memoranda.
SEC.5. Pretrial order judgment after pretrial. The proceedings in the pretrial shall be recorded.
Withinten(10)daysaftertheterminationofthepretrial,thecourtshallissueanorderwhichshallrecitein
detailthematterstakenupintheconference,theactionstakenthereon,theamendmentsallowedinthe
pleadings, and the agreements or admissions made by the parties as to any of the matters considered.
The court shall rule on all objections to or comments on the admissibility of any documentary or other
evidence, including any affidavit or any part thereof. Should the action proceed to trial, the order shall
explicitly define and limit the issues to be tried and shall strictly follow the form set forth in Annex "A" of
theseRules.
Thecontentsoftheordershallcontrolthesubsequentcourseoftheaction,unlessmodifiedbeforetrialto
preventmanifestinjustice.
Afterthepretrial,thecourtmayrenderjudgment,eitherfullorpartial,astheevidencepresentedduring
thepretrialmaywarrant.
RULE5
TRIAL
SECTION 1. Witnesses. If the court deems necessary to hold hearings to determine specific factual
mattersbeforerenderingjudgment,itshall,inthepretrialorder,setthecasefortrialonthedatesagreed
uponbytheparties.
Onlypersonswhoseaffidavitsweresubmittedmaybepresentedaswitnesses,exceptincasesspecifiedin
section 8, Rule 2 of these Rules. The affidavits of the witnesses shall serve as their direct testimonies,
subjecttocrossexaminationinaccordancewithexistingrulesonevidence.
SEC. 2. Trial schedule. Unless judgment is rendered pursuant to Rule 4 of these Rules, the initial
hearingshallbeheldnotlaterthanthirty(30)daysfromthedateofthepretrialorder.Thehearingsshall
be completed not later than sixty (60) days from the date of the initial hearing, thirty (30) days of which
shallbeallottedtotheplaintiffsandthirty(30)daystothedefendantsinthemannerprescribedintherep
trial order. The failure of a party to present a witness on a scheduled hearing date shall be deemed a
waiverofsuchhearingdate.However,apartymaypresentsuchwitnessorwitnesseswithinhisremaining
allottedhearingdates.
SEC.3.Writtenofferofevidence.Evidencenototherwiseadmittedbythepartiesorruleduponbythe
court during the pretrial conference shall be offered in writing not later than five (5) days from the
completionofthepresentationofevidenceofthepartyconcerned.Theopposingpartyshallhavefive(5)
daysfromreceiptoftheoffertofilehiscommentsorobjections.Thecourtshallmakeitsrulingontheoffer
withinfive(5)daysfromtheexpirationoftheperiodtofilecommentsorobjections.
SEC. 4. Memoranda. Immediately after ruling on the last offer of evidence, the court shall order the
partiestosimultaneouslyfile,withinthirty(30)daysfromreceiptoftheorder,theirrespectivememoranda.
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Thememorandashallcontainthefollowing:
1. A"StatementoftheCase,"whichisaclearandconcisestatementofthenatureoftheaction
andasummaryoftheproceedings
2. A"StatementoftheFacts,"whichisaclearandconcisestatementinnarrativeformofthe
establishedfacts,withreferencetothetestimonial,documentaryorotherevidenceinsupport
thereof
3. A"Statementoftheissues,"whichisaclearandconcisestatementoftheissuespresentedto
thecourtforresolution
4. The"Arguments,"whichisaclearandconcisepresentationoftheargumentinsupportof
eachissueand
5. The"Relief,"whichisaspecificationoftheorderorjudgmentwhichthepartyseekstoobtain.
Noreplymemorandumshallbeallowed.
SEC.5.Decisionaftertrial.Thecourtshallrenderadecisionnotlaterthan(90)daysfromthelapseof
theperiodtofilethememoranda,withorwithoutsaidpleadinghavingbeenfiled.

RULE6
ELECTIONCONTESTS
SECTION1.Casescovered.Theprovisionsofthisruleshallapplytoelectioncontestsinstockandnon
stockcorporations.
SEC.2.Definition.Anelectioncontestreferstoanycontroversyordisputeinvolvingtitleorclaimtoany
elective office in a stock or nonstock corporation, the validation of proxies, the manner and validity of
elections, and the qualifications of candidates, including the proclamation of winners, to the office of
director,trusteeorotherofficerdirectlyelectedbythestockholdersinaclosecorporationorbymembers
ofanonstockcorporationwherethearticlesofincorporationorbylawssoprovide.
SEC.3.Complaint.Inadditiontotherequirementsinsection4,Rule2oftheseRules,thecomplaintin
anelectioncontestmuststatethefollowing:
1. Thecasewasfiledwithinfifteen(15)daysfromthedateoftheelectionifthebylawsofthe
corporationdonotprovideforaprocedureforresolutionofthecontroversy,orwithinfifteen
(15)daysfromtheresolutionofthecontroversybythecorporationasprovidedinitsbylaws
and
2. Theplaintiffhasexhaustedallintracorporateremediesinelectioncasesasprovidedforinthe
bylawsofthecorporation.
SEC.4.Dutyofthecourtuponthefilingofthecomplaint.Withintwo(2)daysfromthefilingofthe
complaint,thecourt,uponaconsiderationoftheallegationsthereof,maydismissthecomplaintoutrightifit
isnotsufficientinformandsubstance,or,ifitissufficient,ordertheissuanceofsummonswhichshallbe
served,togetherwithacopyofthecomplaint,onthedefendantwithintwo(2)daysfromitsissuance.
SEC. 5. Answer. The defendant shall file his answer to the complaint, serving a copy thereof on the
plaintiff, within ten (10) days from service of summons and the complaint. The answer shall contain the
mattersrequiredinsection6,Rule2oftheseRules.
SEC.6.Affidavits, documentary and other evidence. The parties shall attach to the complaint and
answertheaffidavitsofwitnesses,documentaryandotherevidenceinsupportthereof,ifany.
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ActingontheMemorandumoftheCommitteeonSECCasessubmittingforthisCourtsconsiderationand
approvaltheProposedInterimRulesofProcedureforIntraCorporateControversies,theCourtResolved
toAPPROVEthesame.
The Interim Rules shall take effect on April 1, 2001 following its publication in two (2) newspapers of
generalcirculation.
March13,2001,Manila.
(Sgd.)HILARIOG.DAVIDE,JR.,
ChiefJustice
(Sgd.)JOSUEN.BELLOSILLO,
AssociateJustice
(Sgd.)JOSEA.R.MELO,
AssociateJustice
(Sgd.)REYNATOS.PUNO,
AssociateJustice
(Sgd.)JOSEC.VITUG,
AssociateJustice
(Sgd.)SANTIAGOM.KAPUNAN,
AssociateJustice
(Sgd.)VICENTEV.MENDOZA,
AssociateJustice
(Sgd.)ARTEMIOV.PANGANIBAN,
AssociateJustice
(Sgd.)LEONARDOA.QUISUMBING,
AssociateJustice

(Sgd.)BERNARDOP.PARDO
AssociateJustice

(Sgd.)ARTUROB.BUENA
AssociateJustice

(Sgd.)MINERVAP.GONZAGAREYES
AssociateJustice

(Sgd.)CONSUELOYNARESSANTIAGO
AssociateJustice

(Sgd.)SABINOR.DELEON,JR.
AssociateJustice

(Sgd.)ANGELINASANDOVAL
GUTIERREZ
AssociateJustice

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