SC tosses Okada dispute back to CA

The Supreme Court remanded to the Court of Appeals the status quo ante order that the group of Japanese gaming tycoon Kazuo Okada employed in a hostile takeover of the Okada Manila Resort in Parañaque.

SC then gave the CA 30 days to decide on whether or not it should lift the SQAO.

The SC’s First Division, in a 22-page resolution issued last 10 August 2022, deemed it prudent to refer to the CA the reception of evidence that would finally resolve the ownership dispute involving Okada Manila.

“The CA has the authority to receive evidence and perform any and all acts necessary to resolve actual issues. When supported by substantial evidence, the CA’s findings are binding on this Court. In fact, the practice of remanding a case to the CA for the determination of factual matters is not novel,” the SC declared.

Among the evidence that the CA was tasked to receive was the propriety of maintaining the SQAO in view of alleged developments in Tiger Resorts, Leisure and Entertainment Inc. following Kazuo’s ouster, specifically, its financial condition and the alleged dissipation of its assets; supposed non-payment of landlord, suppliers and contractors; TRLEI alleged intention to list Okada Manila International Inc., in the United States; TRLEI’s purported plan to transfer its casino business permit to OMI; supposed waiver of TRLEI’s leasehold rights over the land on which Okada Manila is situated; and other acts claimed to be ultra vires (beyond the powers) and prejudicial to TRLEI.

The CA was also tasked to determine the existence, authenticity, and accuracy of the translations of the purported decisions of the Japanese and Hong Kong courts which allegedly have effectively ruled that Kazuo has no control over Okada Holdings Limited, the ultimate parent company of TRLEI, OMI, TRAL and UEC.

Such a decision will establish the limiting of Kazuo’s ability to influence and control the affairs of TRLEI.

“To aid this Court in resolving the matters raised by the parties in relation to the issuance of the SQAO, we deem it proper to refer the pending factual issues to the CA for its determination,” the SC said.

“The CA, as commissioner, may issue subpoenas and subpoena duces tecum, swear witnesses, and rule on the admissibility of evidence. Upon conclusion of the trial or hearing, the CA shall be required to submit a reporter to the Court. Ultimately, this shall form the basis of the Court’s final adjudication on the matter,” the tribunal added.

Justice Remedios Salazar-Fernando, presiding justice of CA, was directed by the SC to cause the immediate raffle of the case and to report the action taken within three days from the raffle.

The court also directed the division of the CA, where the associate justice to whom the case was raffled, “to conduct continuous hearings on the reception of evidence, with utmost dispatch and to submit to the SC its findings and recommendations within an unextendible period of 30 days”  from receipt of the Court’s directive.

ase tossed to CA
The controversy was tossed to the CA by the high bench even as it upheld the SQAO it issued on 27 April 2022 directing the parties to observe the status quo prevailing prior to Kazuo’s removal as a stockholder, director, chairperson, and chief executive officer of TRLEI, which operates the hotel-casino.

The SQAO stemmed from the petition that Kazuo filed before the Court questioning his removal as the shareholder of TRLEI and insisted that it was done through a series of fraudulent and illegal acts.
He named TRLEI and its directors Manuel Lazaro, Kenji Sugiyama, Wolstenholme, Reynaldo David, Yoshinao Negishi, and Tiger Resort Asia Limited and its directors Kenshi Asano and Takako Okada as respondents.

A motion for reconsideration was filed by TRLEI seeking to set aside the SQAO that was issued last 27 April 2022.

During the pendency of the motion, the TRLEI filed a motion for clarification on the scope of SQAO following Kazuo’s violent takeover of Okada Manila on 32 May 2022 and the installation of new directors and officers who were not occupying such positions in 2017.

In clarifying the scope of the SQAO, the Court noted that it merely recognized Kazuo’s interest in TRLEI as an indirect beneficial owner.

Thus, the Court said SQAO “is meant only to preserve his right as a beneficial owner of TRLEI during the pendency of the main case.”

CA was also tasked to determine the existence, authenticity, and accuracy of the translations of the purported decisions of the Japanese and Hong Kong courts which allegedly have effectively ruled that Kazuo has no control over Okada Holdings Limited.

“The Court determined that the status quo ante or the last, actual, peaceable, and uncontested state of things that preceded the present controversy is the time when Kazuo was a stockholder, director, chairperson, and CEO of TRLEI, or prior to his sudden removal as such,” the SC noted.

“The grant of the SQAO was based on the equity in recognition of the right of Kazuo to protect his interest as an indirect beneficial owner of TRLEI, pending the disposition of the main case. It is in this context that the clear language of the SQAO should be read and implemented,” the Court said.

The Court stressed that “disruption was never the intent of the SQAO.”

TRLEI accused Kazuo of illegally expanding the coverage of the SQAO when he called for a special stockholder’s meeting and organization meeting to install his own set of board of directors’ officers namely Dino Espeleta, Maximo Modesto Flores, Tetsuya Yokota, and Hiroshi Kawamura.

Kazuo’s group also forcibly ejected Japanese nationals Michiaki Satate, co-vice chairperson and director of TRLEI; Hajima Tokuda, co-vice chairperson  and authorized representative of Universal Entertainment Corporation; and  James Lorenzana, a Filipino member of the Board of Directors of TRLEI, from the premises of Okada during the violent takeover.

UEC, a publicly-listed company in Japan, owns 99.99 percent of TRLEI, the Philippine firm that owns and operates the Okada Manila Resort.

The SC advised the parties to avail of other legal remedies if there are violations committed in the implementation of the SQAO.

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