G.R. No. 167173 December 27 2007 STANDAR STANDARD D CHARTER CHARTERED ED BANK BANK (Philippin (Philippinee Branch Branch), ), PAUL PAUL SIMON SIMON MORRIS MORRIS,, SUNDA SUNDARA RA RAMESH, OWEN BELMAN, SANJAY AGGARWAL, RAJAMANI CHANDRASHEKAR, MARIVEL GONZALES, GONZALES, MA. ELLEN VICTOR, CHON CHONA A G. REYE REYES, S, ZENA ZENAID IDA A IGLE IGLESI SIAS AS,, RAMO RAMONA NA BERN BERNAD AD,, MICH MICHAE AELA LANG NGEL ELO O AGUI AGUILA LAR, R, and and FERN FERNAN AND D TANS TANSIN INGC GCO, O, Petiti Petitione oners, rs, vs. SENA SENATE TE COMM COMMIT ITTE TEE E ON BANKS, BANKS, FINAN FINANCIA CIAL L INSTIT INSTITUT UTION IONS S AND AND CURRENCIES, CURRENCIES, as represented by its Chairperson, HON. EDGARDO J. ANGARA, Respondent. Facts: Before us is a Petition for Prohibition (With Prayer for Issuance of Temporary Restraining Order and/or Injunction) dated and filed on March 11, 2005 by petitione petitioners rs against against respondent respondent Senate Senate Committee Committee on Banks, Banks, Financial Financial Institutions Institutions and Currencie Currencies, s, as represented by Edgardo Angara. Peti Petiti tion oner er SCB SCB is a bank bank inst instit itut uted ed in England. England. Petitione Petitioners rs are Executive Executive officers officers of said. said. Respondent is is one of the permanent committees of the Senate of the Philippines. The petition seeks the issuance of a temporary restraining order (TRO) to enjoin respondent from (1) proceeding with its inquiry pursuant to Philippine Senate (P.S.) Resolution No. 166; (2) compellin compelling g petitioner petitionerss who are officers officers of petitioner SCB-Philippines to attend and testify before any further hearing to be conducted by respondent, parti particul cularl arly y that that set on March March 15, 2005; and (3) enforc enforcing ing any hold-de hold-depar partur turee order order (HDO) (HDO) and/or and/or putting the petitioners on the Watch Watch List. It also prays that judgment be rendered (1) annulling the subpoenae the subpoenae ad testificandum and duces tecum issued to petitioners, and (2) prohibiting the respondent from compelling petitioners to appear and testify in the inquiry being conducted pursuant to P.S. Resolution No. 166. Senator Juan Ponce Enrile, Vice Chairp Chairpers erson on of respon responden dent, t, delive delivered red a privil privilege ege “Arrogance of Wealth” Wealth” before the speech speech entitled entitled “Arrogance Senate based on a letter from Atty. Mark R. Bocobo denouncing SCB-Philippines for selling unregistered forei foreign gn secu securi riti ties es in viol violat atio ion n of the the Secu Securi riti ties es Regula Regulatio tion n Code Code (R.A. (R.A. No. 8799) 8799) and urging urging the Senate to immediately conduct an inquiry, in aid of legisl legislati ation, on, to preven preventt the occurre occurrence nce of a simila similar r fraudulent fraudulent activity activity in the future. Upon motion of Senator Francis Pangilinan, the speech was referred to respondent. respondent. Prior to the privilege privilege speech, speech, Senator Enri Enrile le had had intr introdu oduce ced d P.S. P.S. Reso Resolu luti tion on No. No. 166, 166, DIR DIREC ECTI TING NG THE THE COMM COMMIT ITTE TEE E ON BANK BANKS, S, FINANCIAL FINANCIAL INSTITUTIONS INSTITUTIONS AND CURRENCIES, CURRENCIES, TO CONDUCT AN INQUIRY, IN AID OF LEG LEGIS ISLA LATI TION ON,, INTO INTO THE THE ILLE ILLEGA GAL L SALE SALE OF UNREGISTERED AND HIGH-RISK SECURITIES BY STA STANDAR NDARD D CHA CHARTE RTERED RED BANK, ANK, WHICH HICH RESULTED IN BILLIONS OF PESOS OF LOSSES TO THE INVESTING PUBLIC. Acting on the referral, respondent, through its Chairperson, Senator Edgardo J. Angara, set the initial hearing on February 28, 2005 to investigate, in
POLITICAL LAW REVIEW DIGESTS By: Diana Ann E. Somera
aid of legislation, the subject matter of the speech and resolution filed by Senator Enrile. Respondent invited petitioners to attend the hearin hearing, g, reques requestin ting g them them to submit submit their their writte written n position paper. Petitioners, through counsel, submitted to resp respon onde dent nt a lett letter er date dated d Febr Februa uary ry 24, 24, 2005 2005 presentin presenting g their position, position, particular particularly ly stressing stressing that there were cases pending in court allegedly involving the same same issues issues subjec subjectt of the legis legislat lative ive inquir inquiry, y, thereb thereby y posing posing a challe challenge nge to the jurisd jurisdic ictio tion n of respondent to continue with the inquiry. On Febr Februa uary ry 28, 28, 2005 2005,, resp respon onde dent nt commenced the investigation. investigation. Senator Enrile inquired who among those invited as resource persons were present present and who were absent. absent. Thereafter Thereafter,, Senator Enrile moved that subpoenae be issued to those who did not attend the hearing and that the Senate request the Depart Departme ment nt of Justic Justice, e, through through the Bureau Bureau of Immigration and Deportation, to issue an HDO against them and/or include them in the Bureau’s Watch List. Senato Senatorr Juan Juan Flavie Flavierr secon seconded ded the motion motion and the motion was approved. Resp Respon onde dent nt then then proc procee eede ded d with with the the investigation proper. Towards the end of the hearing, pet petit itio ione ners rs,, thro throug ugh h couns counsel el,, made made an Open Openin ing g Statement that brought to the attention of respondent the lack of proper authorization from affected clients for the bank to make disclosures of their accounts and the the lack lack of copie opiess of the the accu accusi sing ng docu docume ment ntss mentioned in Senator Enrile's privilege speech, and reit reiter erat ated ed that that ther theree were were pendi pending ng court court case casess regarding the alleged sale in the Philippines by SCBPhilippines of unregistered foreign securities. Issue: petitioners claim that since the issue of whether or not SCB-Phili SCB-Philippines ppines illegally illegally sold unregister unregistered ed foreign securities is already preempted by the courts that that took took cogniz cognizanc ancee of the forego foregoing ing cases cases,, the respondent, respondent, by this investigation investigation,, would encroach encroach upon the judicial powers vested solely in these courts. Ruling: Contention is UNTENABLE. P.S. Resolution No. 166 is explicit on the subject and nature of the inquiry to be (and already being) being) conducted conducted by the respondent Committee, Committee, as found in the last three Whereas clauses thereof. The unm unmista istaka kabl blee obj objecti ective ve of the invest investiga igatio tion, n, as set set forth forth in the said said resolu resolutio tion, n, exposes exposes the error in petitioner petitioners’ s’ allegati allegation on that the inquiry, as initiated in a privilege speech by the very same Senator Senator Enrile, Enrile, was simply simply “to denounce the illegal practice committed by a foreign bank in selling unregistered foreign securities securities x x x.” This fallacy is made made more more glarin glaring g when when we consid consider er that, that, at the conclusion conclusion of his privilege privilege speech, speech, Senator Senator Enrile Enrile urge urged d the the Sena Senate te “to immed immedia iatel tely y conduc conductt an inquiry, in aid of legislation, so as to prevent the occurrence of a similar fraudulent activity in the future.” Indeed, the mere filing of a criminal or an administr administrative ative complaint complaint before a court or a quasiquasi judicial body should not automatically bar the conduct
of legislative investigation. Otherwise, it would be extremely easy to subvert any intended inquiry by Congress through the convenient ploy of instituting a criminal or an administrative complaint. Surely, the exercise of sovereign legislative authority, of which the power of legislative inquiry is an essential component, cannot be made subordinate to a criminal or an administrative investigation. In Arnault vs. Nazareno, “the power of inquiry – with process to enforce it – is an essential and appropriate auxiliary to the legislative function. A legislative body cannot legislate wisely or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change; and where the legislative body does not itself possess the requisite information – which is not infrequently true – recourse must be had to others who possess it.” The Court has already expounded on the essence of the contempt power of Congress and its committees in this wise – The principle that Congress or any of its bodies has the power to punish recalcitrant witnesses is founded upon reason and policy. Said power must be considered implied or incidental to the exercise of legislative power. How could a legislative body obtain the knowledge and information on which to base intended legislation if it cannot require and compel the disclosure of such knowledge and information, if it is impotent to punish a defiance of its power and authority? When the framers of the Constitution adopted the principle of separation of powers, making each branch supreme within the realm of its respective authority, it must have intended each department’s authority to be full and complete, independently of each other’s authority or power. And how could the authority and power become complete if for every act of refusal, every act of defiance, every act of contumacy against it, the legislative body must resort to the judicial department for the appropriate remedy, because it is impotent by itself to punish or deal therewith, with affronts committed against its authority or dignity.
The exercise by Congress or by any of its committees of the power to punish contempt is based on the principle of self-preservation. As the branch of the government vested with the legislative power, independently of the judicial branch, it can assert its
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authority and punish contumacious acts against it. Such power is sui generis, as it attaches not to the discharge of legislative functions per se, but to the sovereign character of the legislature as one of the three independent and coordinate branches of government. In this case, petitioners’ imputation that the investigation was “in aid of collection” is a direct challenge against the authority of the Senate Committee, as it ascribes ill motive to the latter. In this light, we find the contempt citation against the petitioners reasonable and justified. the power of legislative investigation includes the power to compel the attendance of witnesses. Corollary to the power to compel the attendance of witnesses is the power to ensure that said witnesses would be available to testify in the legislative investigation. In the case at bench, considering that most of the officers of SCBPhilippines are not Filipino nationals who may easily evade the compulsive character of respondent’s summons by leaving the country, it was reasonable for the respondent to request the assistance of the Bureau of Immigration and Deportation to prevent said witnesses from evading the inquiry and defeating its purpose. In any event, no HDO was issued by a court. The BID instead included them only in the Watch List, which had the effect of merely delaying petitioners’ intended travel abroad for five (5) days, provided no HDO is issued against them.
