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PHILIPPINE AIRLINES v. SPS. SADIC

FACTS:

The respondents, Muslim Filipinos, filed a complaint against Philippines Airlines (PAL) for breach of contract and negligence resulting in damages due to the loss of their checked-in luggages. PAL invoked the limitations under the Warsaw Convention as a defense. However, before the case could proceed to pre-trial, PAL filed a petition for the approval of a rehabilitation plan and the appointment of a rehabilitation receiver before the Securities and Exchange Commission (SEC) due to economic crisis and a strike by its employees. The SEC granted the petition and suspended all actions for money claims against PAL. PAL moved for the suspension of the proceedings in the Regional Trial Court (RTC) but the motion was denied. PAL then filed a petition for certiorari before the Court of Appeals which dismissed the petition due to failure to serve a copy to the respondents. PAL's motion for reconsideration was also denied. PAL subsequently filed a petition with the Supreme Court, arguing that the proceedings before the trial court should have been suspended after the appointment of a rehabilitation receiver by the SEC. The private respondents contended that the instant petition was improper as the assailed orders of the trial court were interlocutory. Despite the technical flaw, the Supreme Court considered the petition as a special civil action for certiorari and resolved to make a pronouncement on the issue. As part of the resolution, the Supreme Court adopted the Interim Rules of Procedure on Corporate Rehabilitation, thereby transferring all petitions for rehabilitation from the SEC to the RTC.

ISSUES:

RULING:

PRINCIPLES:

  • The appointment of a rehabilitation receiver by the Securities and Exchange Commission (SEC) under Section 6(c) of Presidential Decree No. 902-A necessitates the suspension of all actions for money claims against the petitioner.

  • A petition for review on certiorari under Rule 45 may be treated as a special civil action for certiorari if there is no other plain, speedy, and adequate remedy available.