TITLE Nestle vs.

Uniwide
GR No. 174674, Oct 20, 2010
Carpio, J.,

TICKLER Uniwide cannot pay creditors including Nestle

DOCTRINE Under the doctrine of primary administrative jurisdiction, courts will not determine
a controversy where the issues for resolution demand the exercise of sound
administrative discretion requiring the special knowledge, experience, and services
of the administrative tribunal to determine technical and intricate matters of fact.
SUMMARY xx
FACTS 1. Respondents filed in the Securities and Exchange Commission (SEC) a
petition for declaration of suspension of payment, formation and
appointment of rehabilitation receiver, and approval of rehabilitation plan.
2. The newly appointed Interim Receivership Committee filed a rehabilitation
plan in the SEC. The plan was anchored on return to core business of
retailing; debt reduction via cash settlement and dacion en pago; loan
restructuring; waiver of penalties and charges; freezing of interest payments;
and restructuring of credit of suppliers, contractors, and private lenders.
3. The Interim Receivership Committee filed in the SEC a Second Amendment to
the Rehabilitation Plan (SARP) in view of Casino Guichard Perrachon's
withdrawal. SEC approved the SARP.
4. Petitioners, as unsecured creditors of respondents, appealed to the SEC
praying that the Order approving the SARP be set aside and a new one be
issued directing the Interim Receivership Committee, in consultation with all
the unsecured creditors, to improve the terms and conditions of the SARP.
5. SEC denied petitioners' appeal for lack of merit. Court of Appeals denied for
lack of merit the petition for review filed by petitioners. Petitioners moved
for reconsideration, which was also denied.
PETITIONER’S  The SARP may no longer be implemented, rehabilitation case should be
ARGUMENTS terminated.
 SARP are unreasonable, biased and incapable of a determination of
feasibility.
RESPONDENT’  In their answer, the defendants-respondents alleged that the shares of
S ARGUMENTS plaintiffs-petitioners had likewise been sold to Dionisio their brother, who, in
turn, sold the same to Juanito Camacho and Dalmacio Ramos.
SEC and CA  Sustained the SARP and the findings of the fact in administrative decisions
must be respected.
Issue  Whether or not the SARP should be revoked and the rehabilitation
proceedings terminated?
SC RULING In light of supervening events that have emerged from the time the SEC approved the
SARP on 23 December 2002 and from the time the present petition was filed on 3
November 2006, any determination by this Court as to whether the SARP should be
revoked and the rehabilitation proceedings terminated, would be premature.

Undeniably, supervening events have substantially changed the factual backdrop of

this case. The Court thus defers to the competence and expertise of the SEC to
determine whether, given the supervening events in this case, the SARP is no longer
capable of implementation and whether the rehabilitation case should be terminated
as a consequence.

Under the doctrine of primary administrative jurisdiction, courts will not determine
a controversy where the issues for resolution demand the exercise of sound
administrative discretion requiring the special knowledge, experience, and services
of the administrative tribunal to determine technical and intricate matters of fact.

In other words, if a case is such that its determination requires the expertise,
specialized training, and knowledge of an administrative body, relief must first be
obtained in an administrative proceeding before resort to the court is had even if the
matter may well be within the latter's proper jurisdiction.

The objective of the doctrine of primary jurisdiction is to guide the court in

determining whether it should refrain from exercising its jurisdiction until after an
administrative agency has determined some question or some aspect of some
question arising in the proceeding before the court.