SBMA v.

UIG
Topic: The Corporation and the State

FACTS:
 SMBA and UIG entered into a lease and development
agreement for the lease of SBMA’s binictican golf course
and its facilities
 The agreement included that UIG would transform the said
golf course into a world class golf course in time for the
upcoming ASEAN summit
 Later on, SBMA sent a letter to UIG telling them that they
(UIG) have failed to deliver various contractual obligations,
such as the development of the said golf course
 UIG argued that its main contractor failed to deliver, hence
their failure to deliver
 SBMA rescinded the contract and took over (took
possession) of the said golf course
 UIG filed for TRO/ preliminary injunction before the RTC
 In reply, SBMA argued that UIG had no capacity to sue since
it is a foreign, non-resident corporation, not licensed by the
SEC
 RTC: UIG
 CA: UIG

ISSUE: WON UIG had the capacity to sue

HELD:
 YES
 The general rule is: foreign, non-registered and non-resident
corporations have no capacity to sue. HOWEVER, the Court
found that SBMA is estopped from raising such defense
because it entered into a lease and development agreement
with UIG. SBMA’s effectively recognized the personality and
capacity to sue of UIG