IN THE HIGH COURT OF CALCUTTA
AT CALCUTTA
Letters Patent Appeal No. ____/2013 (Under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5& Celltone pl"'''''''''''''. '''''''''''''...Appellant . )nd*o+le Tele"o,s L,ted# 5- tar Netors L,ted'''''''''.....'''''''''....espondents
Clubbed with
Letters Patent Appeal No. ____/2013 (Under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5& Celltone pl" '''''''''''''. ''''''''''''''...Appellant . and an'''''.'''''''''...''''''.''''...''espondent
Clubbed With
Letters Patent Appeal No. ____/2013 (Under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5&
Celltone pl" '...'''''''''''''. ''''''''''''.Appellant . */s arsh Le!al Asso"ates''''''''...''''''''''''.espondent
4rtten su+,ssons on +ehalf of# Tea, Tea, Code H156 Counsel for the espondents.
TABLE OF CONTENTS
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
Lst of A++reatons....................... A++reatons.............................................. .............................................. .............................................. .............................................7 ......................7 )nde8 of Authortes...................... Authortes............................................. ............................................... ............................................... ...............................................% ........................% tate,ent of 9ursd"ton.................................... 9ursd"ton........................................................... .............................................. .................................................: ..........................: ;uestons Presented................................ Presented....................................................... .............................................. ......................................................... ...................................10 .10 tate,ent of 6a"ts............................................. 6a"ts.................................................................... .............................................. ............................................ .........................11 ....11 u,,ar< of Pleadn!s............................... Pleadn!s...................................................... .............................................. ............................................... ................................1 ........15 5 Pleadn!s..................................................................................................................................1$ ). The )n"dents urroundn! the Lo) do not Consttute a 6raudulent rea"h of the AA..1$ =A>. The Lo) does not )nterfere th the ?8e"uton of the AA......................................1$ =>. The Clause estr"tn! the Transfera+lt< of the hares s Unenfor"ea+le A!anst 5- tar........................................... tar.................................................................. .............................................. ................................................. .................................... ..........1$ 1$ =C> =C> Th Thee Lo Lo)) s not Le!al Le!all< l< nd ndn! n! on the Part Parte ess and s Unenf Unenfor" or"ea ea+le +le A!ans A!anstt )nd*o+le...................................................... )nd*o+le............................... .............................................. .............................................. ............................................20 .....................20 =>. No 6raudulent *srepresentaton has +een *ade....................................................23 )). The )n"dents urroundn! the Cal"utta L"ense do not Consttute a.............................25 rea"h of o f the AA...................................... AA............................................................. .............................................. ............................................ ...........................25 ......25 =A>. L"ense et Apart on a Loer tandard...................................................................25 =>. The Pa<,ents *ade ere Le!t,ate............................. Le!t,ate.................................................... ..........................................2@ ...................2@ =C>. The L"ense as not ;uashed untl after Co,pleton of the eal...........................2$ ))). The )n"dents urroundn! the APU do not Consttute a rea"h f epresentaton..2$ =A>. The Corre"t 6!ures ere uppled..........................................................................2$ =>. Celltone had The A+lt< to Condu"t ue l!en"e................................................2: =C>. )n an< eent# There as No 6raudulent *srepresentaton......................................30 )B. )B. The The a,a!es Cla,ed are )n"orre"t and should not +e Aarded.......... Aarded..................................31 ........................31 B.
and and an an s not not +l!at +l!ated ed to ele elease ase the the ?s"ro ?s"ro A, A,ount. ount.... ...... ...... ....... ........ ........ ........ ........ ........ ......32 ..32 =A>. The )nde,nf"aton +l!atons hae Not +een Tr!!ered.....................................32 =>. The ut fled +< Celltone s Pre,ature....................................................................32
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 2
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 =C>. Celltone Cannot ee )nde,nt< for a,a!e Caused +< ts n Ne!l!en"e........33 B). LA s not La+le to Pa< a,a!es to Celltone.............................................................37 =A>. An )n"orre"t pnon s not A"tona+le....................................................................37 A"tona+le....................................................................37 =>. LA oed No ut< f Care toards Celltone........................................................35 =C>. )n an< "ase# the pnon "annot +e Consdered )n"orre"t n l!ht of ts Assu,ptons ............................................. .................................................................... .............................................. .............................................. ...............................................35 ........................35 =>. Celltones n Ne!l!en"e ?8"eeds that of LA...................................................3@ Pra
LIST
OF ABBREVIATIONS
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 3
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 D
Para!raph
AC
Appeal Cases
A)
All )nda eporter
All ?
All ?n!land eports
AoA
Art"les of Asso"aton
APU
Aera!e eenue Per Unt
CC
rtsh Co,pan< La Cases
CLC
utterorths Co,pan< La Cases
Cal.
Calforna upre,e Court
Ch
Chan"er<
Ch..
Chan"er< son
Cr.
Cr"ut
Co,,
Co,,er"al
Co,p Cases
Co,pan< Cases
el. Ch.
elaare Court of Chan"er<
el. C.
elaare upre,e Court
LA
arsh Le!al Asso"ates
?dn.
?dton
?4CA
?n!land and 4ales Court of Appeal
?4HC
?n!land and 4ales H!h Court
6.upp 6.upp
6ederal upple,ent upple,ent
HL
House of Lords
E
En!s en"h
Llo
Llo
Lo)
Letter of )ntent
*ass. App. Ct.*assa"husetts Appeals Court N.G. N.G.
Ne Gor Gor Court of Appeals Appeals
PC
Pr< Coun"l
;
;ueenFs en"h
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 4
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 ;
;ueenFs en"h son# La eports
AA
hare A"uston A!ree,ent
C
upre,e Court
CC
upre,e Court Cases
upp.
upple,ent
TL
The T,es La eports
UEHL
UE House of Lords
4L
4eel< La eports
INDEX
OF AUTHORITIES
Indian Ca!
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 5
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
1. Centre for for Pu+l" )nterest Lt!at Lt!aton on . Unon of )nda# A) 2012 C 1'''''.25 1'''''.25 2. resser and and .A. . */s. ndal ndal A!ro A!ro Che,"al Che,"al Ltd. I Another# Another# A) 200% C $@1'''''''''''''''''..''''...'''....20 3. -uJarat UrJa UrJa Bas Bas N!a, N!a, Ltd. Ltd. s. Tata Tata *otors# *otors# (2013& (2013& )ndla *u, %@:''''.33 %@:''''.33 7. )rdu, )nda )nda Tele Tele"o, "o, Ltd . . *otorola *otorola )n"orporated )n"orporated I rs.# rs.# A) A) 2011 C @7''.2% @7''.2% 5. 9et Ara
1. ar+ ar+ud ude e . ?u ?uro ro"o "o, , Ca+l Ca+lee *ana *ana!e !e,e ,ent nt ul! ul!ar ara# a# =201 =2011> 1> ?4HC ?4HC 15%0 15%0 (; (;## Co,,&......................................... Co,,&................................................................ .............................................. .............................................. .........................20#22# ..20#22# 23 e"he< Lal . e8 =1:50> AL9 5@'''''''''''''''''''...2@ 2. ell . . Leer ros ros Ltd# Ltd# =1:32> AC 1%1'''''''''' 1%1'''''''''''''''' ''''''''23 ''23 3. ottn )nternatona )nternatonall )nest,ents )nest,ents Ltd . . Be Benson -roup pl"# pl"# =2007> ?4CA ?4CA C 13%$'''''''''''''''''''''''''''''''...2: 7. Courtne< and and 6ar+arn 6ar+arn Ltd . Tolan olan ros (Hotels& (Hotels& Ltd.# Ltd.# =1:@5> 1 All All ? @1%''.23 @1%''.23 5. ?uro"op< Tees Teesdale# dale# =1::2> .C.L.C. .C.L.C. 10%@'''''''''' 10%@'''''''''''''''' ''''''27 27 %. 6ole< . . Cassue Cassue Coa"hes Coa"hes Ltd.# Ltd.# =1:37> 2 E 1'''''' 1'''''''''''' ''''''''... ''...21 21 @. *al . . an an of Credt# =1::@> UEHL UEHL 23'''''''''' 23'''''''''''''''' ''''''...32 ...32 $. Pa!nan pA pA . 6eed produ"ts# produ"ts# =1:$@> =1:$@> Llo
CC CC 115''''' 115''''''''... '''...2$ 2$ 10. Pro"ter and -a,+le (Health and eaut< Care& Ltd . Carrer Carrer Holdn!s# =2003> ?4HC $3''''''''''''''''''''''''''''''''...2$ 11. e.ener e.ener Hotel Co.# =1$:3> (1& Ch. 7:5'''''''''' 7:5'''''''''''''''' ''''''.1: .1: 12. T T 6le8+le 1 4L @53'.''''''''''''''''''''''''...21 13. ,th . outh 4ales 4ales t"h!ear# =1:@$> 1 4L 1%5''''''''''''33 17. troer . Harrn!ton# =1:$$> Ch 3:0''''''''''''''''''...27 15. ud+roo Tradn! ?states Ltd. . . ?!!leton# ?!!leton# =1:$3> 1 AC 777''''''''....21 1%. Tes"o Tes"o uper,arets Ltd . Nattrass# =1:@1> 2 4L 11%%'''''''''.2%#2@ 11%%'''''''''.2%#2@
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 6
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 US Ca!
1. AG AG Partners Partners . 6I4 6I4 A"usto A"uston# n# $:1 A.2d 1032 (el. Ch. 200%&......... 200%&.............. .......... .....27#30 27#30 2. rone . o++# 5$3 5$3 A.2d A.2d :7:# :55 (el. (el. 1::0&''''''' 1::0&''''''''''''' '''''''.27 '.27 3. Carlsen . . e"urt< e"urt< Trust Trust I a. a. an# 205 Cal. Cal. 302 (Cal. (Cal. 1:2$&''''''''3 1:2$&''''''''32 2 7. Coastal rtheopad" rtheopad" )nsttute )nsttute PC . on!orno# on!orno# $0@ N e 2d (2007&'''' (2007&''''''... ''...37 37 5. 6ortress 6ortress Credt Corp . . e"hert# e"hert# LLP :37 N.G N.G..2d 11: 11: (App. . . 2011&''' 2011&''''3% '3% th %. -re
S$a$%$! 1" Co,panes A"t# 1:5%'''''''''''''''''''''''''1:
2. Co,pan Co,panes es A"t# A"t# 2013''' 2013'''''' '''''' '''''' '''''' '''''' '''''' '''''' ''''1: '1: 3. )ndan Contra"t A"t# A"t# 1$@2''''''''' 1$@2''''''''''''''' '''''''''''' '''''''21#2: '21#2: 7. Preenton of Corrupton A"t 1:$$................................................... 1:$$.......................................................................... ............................2@ .....2@ B&&'
1. eatson et al, A NN LA4 6 CNTACT (2:th edn.# 2010&................................ 2010&......................................27 ......27 2. *. -ur -urson son et et al# al# L?-AL P)N)N )N ) NT?NAT)NAL NT?NAT)NAL TANACT)N th (7 edn# 2003&'''''''''''''''''''''''''''...35 3. *.P *.P. 9an 9an I .N .N.. 9an 9an## P)NC)PL? 6 A*)N)TAT)B? LA4 (1@th edn. 2013&'.....25 7. P.B. a, a,ar arsh shnan nan## A T?AT)? N ANT)MCUPT)N LA4 )N ) N)A (13th edn.# 2005& '''''''''''''''''''''''''''''''.2%
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 7
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
STATEMENT
OF JURISDICTION
APPEAL I
The appellant has approa"hed ths Honoura+le Court under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5. The respondents hu,+l< su+,t to the Jursd"ton of ths Honoura+le Court.
APPEAL II
The appellant has approa"hed ths Honoura+le Court under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5. The respondent hu,+l< su+,ts to the Jursd"ton of ths Honoura+le Court.
APPEAL III
The appellant has approa"hed ths Honoura+le Court under Clause 15 of Letters Patent for the H!h Court of Cal"utta# 1$%5. The respondent hu,+l< su+,ts to the Jursd"ton of ths Honoura+le Court
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 8
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
QUESTIONS PRESENTED
). 4H?TH?
L)
TH? )NC)?NT UUN)N- TH?
CNT)TUT? A 6AUUL?NT
?ACH 6 TH? AA
)). 4H?TH?
TH? )NC)?NT UUN)N- TH?
CALCUTTA
L)C?N? CNT)TUT? A
?ACH 6 TH? AA
))) ))). 4H?TH?
TH?
)NC)?NT
UUN)N-
TH?
AB?A-? ?B?NU? ?B?NU? P? U N)T
CNT)TUT? A 6AUUL?NT ?ACH 6 TH? AA
)B. )B. 4H?TH? TH? H?TH? TH? A*A-? CLA)*? G C?LLTN? HUL B. 4H?TH? TH? H?TH? TH? ?C4 A*UNT
? A4A?
HUL ? ?L?A? NT NT
B). 4H?TH? AH L?-AL ) L)AL? T PAG PAG A*A-? NT NT B)).
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 9
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
STATEMENT
OF FACTS
THE BAC#GROUN(
)nd*o+le )nd*o+le Tele"o,s ele"o,s L,ted =O)nd*o+le># a "o,pan< n"orporated n )nda and a ,e,+er of Nft< 50# s a su""essful tele"o, eup,ent "o,pan<. The "har,an and ,ana!n! dre"tor of the "o,pan< s *r ardar# ho alon! th hs fa,l<# s also the pro,oter of the )nd*o+le and holds 35 of the shares n the "o,pan< th the,. )n order to enter the tele"o, ser"es +usness# )nd*o+le de"ded to +d for the l"enses for 5- ,o+le netors to +e !ranted +< the -oern,ent of )nda =O-o)>. 6or housn! ths tele"o, ser"e +usness# a holl< oned su+sdar< na,ed 5- tar Netors L,ted =O5tar> had +een set up +< )nd*o+le. THE A)AR( OF LICENSES
)n the +ddn! pro"ess "ondu"ted +< the -o) n 2013# +ds ere pla"ed +< 5- star for Eolata# Chenna and H
Celltone had a Rero toleran"e pol"< for "orrupton and hen"e adopted a "autous approa"h +efore fnalRn! the deal. )t de"ded to "ondu"t a full +lon due dl!en"e and for ths purpose# apponted */s Le8,an Le8 ,an Asso"ates# a leadn! lead n! )ndan )n dan la fr, and A Partners# a leadn! a""ountn! fr,. urn! a ,eetn! n Eolata# *r -an!ston# the proJe"t ,ana!er of Celltone# as assured +< 5- tars representates that the pro"ess of aard of l"enses as transpar transparent ent and entrel< entrel< a+oe +oard. +oard. Cellton Celltonee and ther ther la
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 th !fts. Althou!h "on"erned a+out ths# *r -an!ston de"ded not to es"alate ths ssue to the senor ,ana!e,ent of Celltone sn"e the deal as too ,portant to +e s"uttled. THE SHARE AC*UISITION AGREEMENT
Under the ter,s of the AA# Celltone as to su+s"r+e for 7: shares of 5- tar for a "onsderaton of UQ 7:0 ,llon. 70 of these shares ere to +e su+s"r+ed to Celltone out of a ne ssue of shares undertaen +< the "o,pan< for a "onsderaton of UQ 700 and the re,an re,ann! n! : repre represen sent tn! n! 125 125#: #::$ :$ shares shares ere ere to +e a"ur a"ured ed fro, fro, )nd*o+ )nd*o+l lee for for a "onsderaton of UQ :0 ,llon pad to )nd*o+le =Oale shares>. The AA as e8e"uted on "to+er 3# 3013. THE LEGAL OPINION
A "ondton pre"edent to the AA as the ssue of a "losn! le!al opnon +< */ arsh Le!al Asso"ates =OLA># the le!al "ounsel representn! )nd*o+le and 5- star h"h as ssued on 25th Noe,+er# 2013. LA !ae !ae arous opnons +ased on the assu,pton assu,pton that t had not "o,e a"ross an< eent or "r"u,stan"es that ould render the AA od or oda+le +< reason reason of fraud# fraud# ,srepr ,srepresen esentat taton# on# default default or la" la" of "onsde "onsderat raton. on. LA also o+taned o+taned professonal la+lt< nsuran"e orth at least U Q100 fro, Pro)nsure for ths purpose. n satsfa"ton of the "ondtons pre"edent# Celltone "o,pleted the a"uston under AA on Noe,+er 25# 2013. THE ESCRO) AGREEMENT
Celltone# Celltone# )nd*o+le and 5- star entered nto an es"ro a!ree,ent a!ree,ent dated Noe,+er 25# 2013 th and an =Oan># the es"ro a!ent. ased on the ter,s of ths a!ree,ent# and an as to hold 10 of the "onsderaton pa
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 11
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 THE CANCELLATION OF # OL#ATA OL#ATA METRO LICENSE
After the +usness had "o,,en"ed and hu!e fnan"al nest,ents had +een ,ade# t "a,e to l!ht that the aard of l"ense to 5- star n the Eolata *etro# as "hallen!ed under a rt petton fled +< Naro Tele"o, Tele"o, L,ted n e"e,+er 2013. )t as alle!ed that *r. antha an!a# a proJe"t ,ana!er at )nd*o+le# pad s 2# 50#000 to a "o,pan< oned +< *r. e+ra
4hle Celltone as stll assessn! ts stuaton# ,ore ne ds"oeres ere ,ade. Celltone had +een operatn! on the assu,pton that the proJe"ted APU APU for the H
After the n"dents surroundn! APU# Celltone !ot another sho" on re"en! a le!al not"e fro, fro, -roe -roera ra )n"# )n"# =O-ro =O-roera era> > a tele" tele"o, o, "onsul "onsultan tan"< "< "o,pa "o,pan< n< +ased +ased n -reen -reen "h# "h# Conne"t"ut h"h "la,ed that the sale of 125#::$ shares to Celltone as lle!al sn"e )nd*o+le had s!ned an Lo) th -roera to sell t those shares.
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 12
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 THE SUITS
Celltone de"ded to tae re,edal a"tons and fled three "l suts +efore the Cal"utta H!h Court. )t sued )nd*o+le and 5- stars to refund the pur"hase "onsderaton "onsderaton or pa< eualent da,a!es da,a!es.. +Fi +Fi$$ %i$ %i$ )t sued and an seen! release the ?s"ro a,ount n faour of Celltone Celltone pursuant to the ?s"ro A!ree,ent. A!ree,ent. +S!.&nd %i$" )t sued LA seen! seen! da,a!es to the tune of Q7:0 ,llon for rendern! an n"orre"t le!al opnon. +T/id +T/id %i$" )n parallel# Celltone also ntated an ar+traton "la, under the )ndaMUE lateral )nest,ent Treat< a!anst the -oern,ent of )nda# on the !round that the a"ton of "an"ellaton of the l"en"e for the Eolata ,etro area a,ounted to an e8propraton of ts nest,ent n 5- tar. All three suts ere ds,ssed on ther ,erts +< the Cal"utta H!h Court. Celltone has preferred an appeal ap peal a!anst all the orders to a dson +en"h of o f the Cal"utta H!h Court. )t has de"ded to "lu+ all the appeals and hear the, n a "o,poste fashon.
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 13
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 SUMMARY OF PLEADINGS
).
TH? ) NC)?NT UUN)N- TH? L) NT NT CNT)TUT? A 6AUUL?NT ?ACH 6 TH? AA
)t s su+,tted that the shares sold to Celltone are "orre"t and le!al. First # the Lo) dd not hnder the transfera+lt< of the ale hares to Celltone. The Lo) that as entered nto +eteen )nd*o+le )nd*o+le and -roera as s,pl< "on"ernn! the sale of : shares oned +< )nd*o+le n 5- tar. ?en f those shares are sold to another part<# t ould not "onsttute a +rea"h of the Lo) as the o+l!aton under the Lo) "ould stll +e ,et out of the re,ann! 51 shares held +< )nd*o+le n 5- tar. Secondly# n an< eent# the "lause restr"tn! restr"tn! the transfer of shares to a part< other than -roera s patentl< lle!al as t s a!anst the sprt of free transfera+lt< of shares as proded n the Co,panes A"t# 2013. n"e the prate a!ree,ent does not fnd a pla"e n the AoA of 5- tar# t "ant +e enfor"ed a!anst 5- tar. Thirdly # on a "orre"t "onstru"ton of the Lo) n ueston# t "an +e "on"luded that t as too un"ertan and n"o,plete to "onsttute a +ndn! "ontra"t +eteen the partes and hen"e the partes "ould not hae ntended to enter nto le!al relatons. Nether part< "a,e forard to ne!otate n !ood fath at an< t,e nor dd the< a"t n furtheran"e of the understandn! set forth n the Lo) at all. Ths s nd"ate of a la" of ntenton to enter nto a +ndn! "ontra"t th ea"h other. Therefore# Therefore# the Lo) s not een enfor"ea+le a!anst )nd*o+le. Fourthly, there s no fraudulent fraudulent ,srepresentaton as een thou!h the Lo) as not +ndn!# the do"u,ent as +rou!ht to the noled!e noled!e of Celltone hle t as "ondu"tn! due dl!en"e. )nd*o+le and 5- tar "annot +e held la+le hen t as aare of a "ontra"tual "ontra"tua l representaton representa ton of fa"t +efore the "losn! and nonetheless ele"ted to "lose on the "ontra"t# despte han! a "ontra"tual r!ht to ter,nate. )).
TH? ) NC)?NT UUN)N-
TH? CALCUTTA L)C?N? NT NT CNT)TUT?
A ?ACH 6 TH? AA.
)t s su+,tted that the n"dents surroundn! the "an"ellaton of the Cal"utta l"ense do not "onsttute a +rea"h of the AA. First # the Cal"utta l"ense as set apart +< the Court on a standard of O possibility possibility of bias and not Oexistence existence of bias’ . No a"tual "orrupton as proen and the l"ense as set asde on a loer standard. Thus# 5- tar ere not n olaton of an< la. Second # the pa<,ents ,ade to the "onsultan"< fr, ere le!t,ate. le!t,ate. The pa<,ents ere
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 14
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 dul< a""ounted for and ere quid pro quo for strate!" adsor< ser"es. ser"es. These pa<,ents do not "onsttute a +r+e# as the< are not n respe"t of off"al a"ts# +ut for the ser"es rendered +< *r. e+ara
III"
TH? ) NC)?NT UUN)N- TH? APU NT NT CNT)TUT? A ?ACH 6 ?P??NTAT)N ?P??NTAT)N
)t s su+,tted su+,tted that there as no +rea"h of representaton th respe"t to the APU. First # the "orre"t f!ures ere suppled +< 5- tar thout an< hestaton durn! due dl!en"e. The falure of Celltone to ass,late ths nfor,aton "annot +e used to hold 5- tar la+le. 6urther# 6urther# the "ondu"t of Celltone Celltone nd"ated that the< ere satsfed th the response and thus the "o,,un"a "o,,un"aton ton of the nfor,ato nfor,aton n as "o,plete. "o,plete. Second # Celltone had the ,eans of ds"oern! the truth +< ordnar< due dl!en"e. The prn"ple of caeat e!ptor appled appled and the appellant appellant ou!ht to hae safe!uard safe!uarded ed ts on nterest nterest.. Third # there as no fraudulent ,srepresentaton sn"e there as no ntenton on the part of 5- tar to de"ee the other part< and no n o relan"e as pla"ed on ths representaton representa ton +< Celltone. Celltone . Celltone dd not rase an< an < o+Je"ton re!ardn! re!ardn! the proJe"ton proJe"ton after the phone "all# h"h s nd"ate of the nfor,aton +en! ,,ateral to the,. Hen"e# there ther e as no fraudulent +rea"h +rea "h of representaton. representaton .
)B. )B.
TH? A*A-? CLA)*? A? ) NC?CT AN HUL NT HUL NT ? A4A?
)t s su+,tted that sn"e there s no +rea"h of arrant< or representaton# the da,a!es "la,ed should not +e aarded. )n an< "ase# the da,a!es are l,ted +< the AA to 50 of the pur"hase "onsderaton. )t s onl< the a"tual loss that s suffered +< Celltone that should +e aarded as da,a!es. Ths a,ount should +e "al"ulated +< the Courts on the +ass of the dfferen"e +eteen the pur"hase "onsderaton and a"tual alue of the +usness. Ths s an a"ton of Oactio quanti !inoris’ and and should +e treated as su"h. Hen"e# the da,a!es "la,n! the entre pur"hase "onsderaton are n"orre"t and should not +e aarded.
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 15
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 B.
AN ANE ) ANE ) NT NT L)-AT? T ?L?A? ?L?A? TH? ?C4 A*UNT
)t s su+,tted that and an s not o+l!ated to release the es"ro a,ount sn"e the "ondtons for releasn! the a,ount under the es"ro a!ree,ent hae not +een ,et. As per the es"ro es"ro a!ree a!ree,e ,ent# nt# the es"ro es"ro a,oun a,ountt as as to +e appl appled ed toar toards ds an< nde, nde,nf nf" "at aton on o+l!a o+l!at tons ons that that ,a< hae hae arse arsen n und under er the AA. AA. )t s su+ su+, ,tte tted d the nde, nde,nf nf"a "at ton on o+l!a o+l!at tons ons hae hae not +een tr!!e tr!!ered red sn"e sn"e first, there there has +een +een no +rea" +rea"h h of arr arrant ant< <# representaton# et al. Second # the sut fled +< Celltone s pre,ature sn"e no a"tual da,a!e has +een suffered +< the,. Celltone has also not n"urred an a+solute la+lt< or "r
B). LA ) NT ) NT L)AL? T PAG A*A-? T C?LLTN?
)t s su+, su+,tt tted ed that that LA "annot "annot +e held la+le la+le for rendern! rendern! an n"orre n"orre"t "t opnon. opnon. First, a state,ent on h"h la+lt< "an +e +ased ,ust +e one of fa"t and not of opnon. )n the nstant "ase# LAs opnon letter as not a fa"tual !uarantee and dd not ,ae t an nsurer of the soundness of ts opnon. Thus# t "annot +e held la+le for an n"orre"t opnon. opnon. Second # LA oed no dut< of "are toards Celltone sn"e Celltone as a thrd part< and had "onfl"tn! nterests nterests th LA LAs "lent# )nd*o+le. 4hle Celltone anted to prote"t ts nest,ents# nest,ents# )nd*o+les nterests led n ensurn! that Celltone nested n ts "o,pan<. n! to su"h "onfl"tn! nterests# LA oed no dut< of "are toards Celltone and "annot +e held la+le +< t. Third # n an< "ase# the opnon as "r"u,s"r+ed and ualfed +< the assu,ptons on h"h h"h t as as +ased +ased and and thus thus LA LA "annot "annot +e held held la+l la+lee for ,srep ,srepres resent entat aton. on. Fourth# assu,n! LA as ne!l!entS the ne!l!en"e of Celltone e8"eeds that of LA and e8"ulpates LA of an< la+lt<. )n l!ht of a+oe su+,ssons# t s su+,tted that LA s not la+le to pa< an< da,a!es
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 16
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 PLEADINGS
I. THE INCIDENTS SURROUNDING
THE LOI DO NOT CONSTITUTE A FRAUDULENT
BREACH
OF THE SAA
1. )t s su+,tted su+,tted that that the shares shares sold to Celltone Celltone are "orre"t "orre"t and le!al le!al and )nd*o+ )nd*o+le le s the sole le!al and +enef"al +enef"al oner of the ale hares n ueston# free and "lear of all lens and s a+solutel< a+solutel< enttled to sell the, to Celltone. Ths s on! to three reasons First # the Lo) does not nterfere th the e8e"uton of the AA A. Second # the "lause
restr"tn! restr"tn! the transfera+lt< transfera+lt< of the shares s unenfor"ea+le a!anst 5- tar B. Third # the the Lo Lo)) s not not le!a le!all ll< < +nd +ndn n! ! on the the part parte ess and and s unen unenfo for" r"ea ea+l +lee a!a a!ans nstt )nd*o+leC. Fourth# n an< eent# there as no fraudulent ,srepresentaton (. =A>. TH? L) ? NT ? NT ) NT?6?? 4)TH TH? ??CUT)N 6 TH? AA
2. )t s su+,tted that een f the Lo) s assu,ed to hae +een +ndn! on )nd*o+le and -roe -roera ra )n".# )n".# t does does not rende renderr the the AA AA unenf unenfor" or"ea+ ea+le le.. Th Thee Lo Lo)) as as s,p s,pl< l< "on"erned th the transfer of 125#:$$ shares.1 The a!ree,ent n the Lo) dd not pertan to the spe"f" : shares a"ured +< Celltone n 5- tar +ut an< 125#:$$ shares of the "o,pan<. The o+l!aton under the Lo) "an stll +e ,et out of the re,ann! re,ann! 51 shares held +< )nd*o+le n 5- tar. tar. Therefore# Therefore# the "la, of -roera )n". that the sale of the spe"fed nu,+er of shares n 5- tar to Celltone as lle!al does not hold !ood. =>. TH? CLAU? ?T)CT)N?T)CT)N- TH? TAN6?A)L)TG 6 TH? HA? ) U N?N6C?AL? A-A)NT 5- TA TA
3. )t s su+, su+,tt tted ed that that the ter, ter,ss of the Lo Lo)) restr restr"t "tn! n! )nd*o )nd*o+l +lee fro, fro, selln selln! ! or transferrn! the shares s unenfor"ea+le a!anst 5- star on a""ount of t not +en! n"orporated n the AoA of the "o,pan<.
1 Append8 C# 6a"tsheet. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 17
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 7. e"ton 5$ of the Co,panes Co,panes A"t 2013 holds that shares shares of a pu+l" pu+l" "o,pan< are freel< transfera+le.2 e"ton 77 of the Co,panes A"t# 2013 s,ultaneousl< prodes that shares of an< ,e,+er n a "o,pan< shall +e ,oa+le propert< transfera+le n the ,anner proded n the Art"les of the "o,pan<. )t therefore allos ,e,+ers to la< don the ,anner n h"h shares of a "o,pan< shall +e transfera+le. Courts hae ethe etherr refuse refused d to re"o! re"o!nR nRee "lause "lausess n the the shareh sharehold olders ers a!ree, a!ree,ent entss that that restr restr"t "t trans transfer fera+ a+l lt< t< of shares shares or hae hae enfor" enfor"ed ed su"h su"h "lause "lausess onl< onl< f the< the< hae hae +een +een n"orporated n the AoA of the "o,pan<. "o,pan<.3 5. )n the nstant nstant "ase# "ase# the restr"ton restr"ton on transfer transfer of the spe"f" spe"f" shares shares as ensa!ed ensa!ed n n the Lo) does not fnd a pla"e n the AoA of 5- tar.7 *oreoer# 5- tar as not een a part< to the a!ree,ent n the Lo).5 Th There erefor fore# e# n l!ht l!ht of the proso prosons ns of the Co,panes A"t# su"h a restr"ton on the free transfera+lt< "annot +e enfor"ed a!anst a pu+l" "o,pan< and the "o,pan< "annot +e +ound +< t.% %. Th Thee upr upre, e,ee Cour Courtt of )nda )nda n n "an#ara$ % affr,ed affr,ed that shares are !oable property V. The onl< per,ss+le restr"tons on the and the &rticles re#ulate their transfer V. transfer of shares are those# h"h are "ontaned n the AoA. Addtonall<# n 'afatlal transfera+lt< of shares# n"ludn! +ut not (ndustries,) the Court held that o+sta"les to transfera+lt< l,ted to# preMe,pte r!hts of shareholders unn"orporated n the AoA "annot +e enfor"ed. )t s thus a fr,l< esta+lshed esta+lshed poston of la that a pu+l" "o,pan< n )nda
2
e"ton e"ton 5$ (2&# C*PAN)? ACT# 201 2013. 3. e"to e"ton n 111A 111A (2& of Co,pan Co,panes es A"t# 1:5 1:5% % s the "orres "orrespon pondn dn! ! proson.
3 .P. 9an . Ealn!a# A)1:%5 C1535S B.. an!araJ . B.. -opalarshnan and thers# A) 1::2 C 753. 7 Append8 C# 6a"tsheet. 5 Append8 C# 6a"tsheet. % Append8 C# 6a"tsheet. @ B.. B.. an!araJ . B. B.. -opalarshnan -opalarshna n and thers# A) 1::2 C 753. $ *afatlal )ndustres Ltd. . -uJarat -as Co. Ltd. And rs.#(1:::& :@ Co,pCas 301 -uJ. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 18
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 "annot prode for restr"tons on the transfera+lt< of ts shares sn"e t s O patently patently ille#al .9 @. Ad,ttedl<# the proso to e"ton 5$(2& of the Co,panes A"t# 2013 h"h states that
an< a!ree,ent n respe"t of transfer of se"urtes shall +e enfor"ea+le as a "ontra"t# !oerns the Lo) n ueston. Hoeer# n the a+sen"e of an TH? L) ) NT ) NT L?-ALLG )N)N- N TH? PAT)? AN ) U N?N6C?AL? A-A)NT ) N*)L?
:. )t s su+, su+,t tte ted d that that the the Lo) s!n s!ned ed +< )nd* )nd*o+ o+l lee and and -roe roera ra as as ,erel erel< < a prel,nar< a!ree,ent that la"ed the "hara"terst"s of a +ndn! "ontra"t and thus as not le!all< +ndn! on the,.10 The ueston of hether the Lo) s ,erel< an e8presson of future nterest to transa"t# or s a fnal and +ndn! "ontra"t has to +e de"ded throu!h a "onstru"ton "onstru"ton of the ter,s of the Lo).11 Upon a readn! of the Lo)# t s "lear that t ,erel< reured )nd*o+le to eep the offer open for three ,onths durn! h"h the partes had to or n !ood fath toards the "o,pleton and
:
Pushpa
Eato"h
.
*anu
*aharan#
(200%&
13 1
Co,p
Cas
72
(elh&S
e.ener e.ener Hotel Co.# =1$:3> (1& Chan"er< son 7:5 affi affir!e r!ed d in 4estern *aharashtra eelop,ent Corp . aJaJ Auto Ltd# (2010& 157 Co,p Co ,p Cas 5:3. 10 resser and .A. . */s. ndal A!ro Che,"al Ltd. I Another# A) 200% C $@1. $ @1. 11 resser and .A. . */s. ndal A!ro Che,"al Ltd. I Another# A) A) 200% C $@1. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 19
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 e8e"uton of the defnte do"u,entaton.12 Thus# t s edent that the Lo) as ,erel< an e8presson of future nterest to transa"t and not a +ndn! "ontra"t. 10. 6urther,ore# 6urther,ore# the test for deter,nn! hether the a!ree,ent s le!all< enfor"ea+le# enfor"ea+le# as lad don n *arbude1+ s not satsfed satsfed n the nstant "ase as the Lo) as not ntended to "reate le!al relatonsi# t as ,erel< an a!ree,ent to a!ree ii# and t asnt a suff"entl< "o,plete and "ertan "ontra"tual a!ree,ent iii"
i" T/!! a n& in$!n$i&n $& .!a$! 3!a3 !3a$i&n"
11. )t s su+,tted that n the a+sen"e of a for,all< for,all< "on"luded "ontra"t# "ontra"t# the ntenton ntenton of the partes "an onl< +e dered d ered fro, "ondu"t. "o ndu"t.17 An Oob$ectie theor< of "ontra"t for,aton s appl"a+le h"h la =2011> ?4HC 15%0 (;# Co,,&. Co,,&. = *arbudeV> 14 T 6le8+le
Co E-# =2010> = 2010> 1 4L @53 =TV>.
15 T# =2010> 1 4L @53. 1% Pa!nan pA . 6eed produ"ts# =1:$@> Llo
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 un"ertant<1@. Hoeer# Hoeer# the ,atter ,atter n hand dd not een rea"h ts ne!otaton ne!otaton sta!e# and there as no atte,pt to e8e"ute the Oa!ree,ent partl< or holl<.1$ 12. The Lo) Lo) proded proded that that the parties shall ne#otiate in #ood faith the detailed definitie docu!e docu!enta ntatio tion n to #ie #ie le#al le#al effect effect to the underst understand andin# in# set forth. forth.’ ’ 19 Ths "learl<
nd"ates that partes ntended to !e a Ole#al effect to the a!ree,ent onl< after ne!ot ne!otat aton on on the defn defnt te e do"u, do"u,ent entat aton on had +een +een "on"l "on"lude uded. d. Th There ere as as no deler< deler< of shares# shares# pa<,ent pa<,ent of "onsder "onsderat aton on or "ondu"t "ondu"t to nd"ate nd"ate that the partes partes ere aare of the arous other ,ateral ter,s of the "ontra"t for the, to +e ad ide! on.20 There as no other do"u,ent that as s!ned +eteen )nd*o+le and -roera# pursuant to the a!ree,ent.21 Ths "learl< nd"ates the fa"t that )nd*o+le dd not ntend to "reate a le!al relaton th -roera. ii" I$ a !!36 an a!!!n$ $& a!!
13. )t s su+, su+,tte tted d that the Lo) as not a +ndn! +ndn! "ontra"t "ontra"t sn"e sn"e t as unora+ unora+le le and faled for un"ertant<. un"ertant<. )t as no ,ore than an Oa#ree!ent to a#ree as other ter,s that !o nto do"u,entn! an AA ere left for the, to ne!otate upon n future.22 An a!ree, a!ree,ent ent to a!ree a!ree s le!al le!all< l< unenfo unenfor"e r"ea+ a+le le and t reu reures res addt addto onal nal and fnal fnal ne!otatons to ,ae t a +ndn! "ontra"t.23
17 6ole<
. CSassue Coa"hes Ltd.# =1:37> 2 E 1# ud+roo Trado,! ?sattes Ltd. B. ?!!leton# =1:$3> 1 AC
777.
1$ D 13# 6a"tsheet. 1: Append8 C# 6a"tsheet 20 e". 13# )ndan Contra"t A"t# 1$@2S ",ers Beraltun! -,+h . )ndan l Corporaton Ltd.#A) 1::: C 507.
21 D 13# 6a"tsheet. 22 *arbude, =2011> ?4HC 15%0 (;# Co,,&. 23 *arbude, =2011> ?4HC 15%0 (;# Co,,&. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 21
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 17. As has +een su+,tted su+,tted a+oe# a+oe# the Lo) proded proded that the partes partes shall shall ne#otiate in #ood faith the detailed definitie docu!entation to #ie le#al effect to the understandin#.V Thus# een thou!h the +road ter,s of the nest,ent n the for, of
nu,+er of shares and pur"hase "onsderaton "onsderaton ere set out n the sde letter# letter# t stll left the a!ree,ent openMended +e"ause of the ter,s used n the sde letter. o,ethn! s,lar had +een held n *arbude here the "ourts refused to "onsder an Lo) +ndn! sn"e the ter,s ere to +e ne!otated ne!otated n !ood fath n the future and t as not "ertan and suff"ent to "onsttute a +ndn! "ontra"t.27 The Lo) n the nstant "ase as not ntended to "reate +ndn! le!al relatons +eteen the partes to t. )t as at +est a Letter of Co,fort pendn! the "on"luson of the proposed defnte defnte do"u,entaton to !e t a le!al effe"t.25 Hen"e# Hen"e# t s su+,tted su+,tted that the sde sde letter letter as# on ts proper nterpretaton# onl< an Oa#ree!ent to a#ree’ h"h h"h as unenfor"ea+le. iii" T/! a!!!n$ an$ %88i.i!n$36 .&93!$! and .!$ain
15. )n *arbude t has +een held that an a!ree,ent "annot +e ntended to "reate le!al relatons -if it is unenforceable in its entirety-. )t as held that n a shareholders a!ree,ent# hat s "onte,plated s not ,erel< a s,ple sale of a "ertan nu,+er of shares n the ne# ,er!ed +usness# for a "ertan pr"e. ather t s an a!ree,ent that oul ould d dete deter, r,n nee the the on#oin# +etee een n the the shar shareh ehol olde derr and and the the on#oin# relation relationship shipV +et "o,pan<. "o,pan<.2% )n order to ,ae t suff"entl< "ertan and ora+le# the sde letter ,ust "onta "ontan n "erta "ertan n essen essent tal al ter,s ter,s su"h su"h as share sharehol holder ders s r!ht r!htss and other other "orpor "orporat atee !oernan"e prosons. prosons.2@ Thus# Thus# n the nstan"e nstan"e "ase# "ase# s,pl< dentf< dentf<n! n! pur"hase pur"hase "onsderaton and the a,ount of shares s nsuff"ent to "reate "ertant< as to the proposed relatons +eteen the partes.
27 *arbude, =2011> ?4HC 15%0 (;# Co,,&. 25 *arbude, =2011> ?4HC 15%0 (;# Co,,&. 2% *arbude#=2011> ?4HC 15%0 (;# Co,,&. 2@ *arbude, #=2011> ?4HC 15%0 (;# Co,,&. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 22
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 1%. 6urt 6urther her,o ,ore# re# n Tolaini *ros /otels0 td, 2)t has +een held that f the la does not een re"o!nRe a "ontra"t to enter nto a "ontra"t (hen there s a funda,ental ter,
,poss+le to "al"ulate as t "annot +e pred"ted hether the ne!otatons ould +e su""essful or fall throu!h and f su""essful# hat the result of the ne!otaton ould +e.30 1@. Hen"e# on the "orre"t "onstru"ton "onstru"ton of the Lo) n ueston# ueston# t "an +e "on"luded that the a!ree,ent +eteen the partes ,erel< proded -roera an opportunt< to nest n the "o,pan<. )t as too un"ertan to "onsttute a +ndn! "ontra"t and hen"e the partes "ould not hae ntended to enter nto le!al relatons. )t s therefore su+,tted that the Lo) s not een enfor"ea+le a!anst )nd*o+le. =>. N 6AUUL?NT *)?P??NTAT)N HA ??N *A?
1$. )t s su+, su+,tt tted ed that# n an< "ase# no fraudule fraudulent nt ,sreprese ,srepresentat ntaton on has +een +een ,ade +< )nd*o+le and 5- tar. The falure to ds"lose a ,ateral fa"t does not !e the r!ht to the affe"ted part< to sue for fraudulent ,srepresentato ,srepresentaton. n.31 )t s settled la that a nonM ds"losure s not fraudulent f the person on ho, the fraud has +een "o,,tted "an ds"oer the truth th due dl!en"e.32 )n the nstant "ase# Celltone as n fa"t proded th the Lo) durn! the due dl!en"e and hen"e hen" e "annot hold the respondents la+le for nonMds"losure of a ,ateral fa"t.
2$ Courtne< and 6ar+arn Ltd . Tolan ros (Hotels& Ltd.#=1:@5> 1 All ? @1%. 2: Courtne< and 6ar+arn Ltd . Tolan ros (Hotels& Ltd.#=1:@5> 1 All ? @1%. 30 Courtney# =1:@5> 1 All ? @1%. 31 ell . Leer ros Ltd# =1:32> AC 1%1. 32 hr Ershnan . Eurushetra Unerst<# A) 1:@% C 3@%. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 23
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 1:. 6urther,ore# 6urther,ore# to ,ae a "la, of fraudulent ,srepresentaton ,srepresentaton t s n"u,+ent upon the +u
33 rone . o++# 5$3 A.2d :7:# :55 (el. 1::0&. 37 Nna!aa Ch 3:0. 3@ AG AG Partners . 6I4 6I4 A"uston# $:1 A.2d 1032 ( el. Ch. 200%&. 3$ ?uro"op< Teesdale# =1::2> .C.L.C. 10%@ *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 24
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 II. THE INCIDENTS SURROUNDING
THE CALCUTTA LICENSE DO NOT CONSTITUTE A
BREACH
OF THE SAA
21. )t s su+,tted su+,tted that the n"dents of the Cal"utta Cal"utta l"ense do not a,ount a,ount to a +rea"h of a arrant< n the AA for three reasons. First # the l"ense as set apart on a standard of O suspicion suspicion of biases and not Oexistence of bias A. Second # the pa<,ents to the "onsultn! fr, ere le!t,ate pa<,ents and do not nd"ate "orrupton or +r+er< B. Third # the l"ense as not uashed untl after the "o,pleton of the deal and thus
no +rea"h of arrant< "an +e "la,edC. =A>. L)C?N? ?T APAT N A L4? TANA.
22. )t s su+,tted that the Cal"utta Cal"utta l"ense as as set apart +< the H!h Court on the ellM esta+lshed standard of O suspicion suspicion of bias and not +e"ause of ts Oactual existence.3: There Th erefor fore# e# all all that that as as proen proen +efor +eforee the Court Court as s,pl< s,pl< the the O possibility possibility of corruption# +ut no a"tual "orrupton. Therefore# there s no Oiolation of a law or re#ulation +< 5- tar or )nd*o+le. 23. The alle!atons alle!atons +efore the Cal"utta Cal"utta H!h Court ere Oalle#ations a#ainst the biddin# process70 and not alle!atons a!anst 5- tar. The "ase as therefore# de"ded on
hether a reasona+le outsder ,!ht assu,e +as n the tendern! pro"ess.71 The de"son of the H!h Court n ths "ase therefore# n no a< alle!es a +rea"h of a la or re!ulaton +< 5- tar or )nd*o+le. 27. Th Thee Jud!,ent Jud!,ent n Centre for 4ublic (nterest iti#ation also affr,s affr,s the sa,e prn"ple# +< statn! that pron! "orrupton s not ne"essar< to set asde a tender aard.72 Therefore# the representatons ,ade +< 5- tar that the O process process was aboe board 73 3: *.P. 9an I .N. 9an# P)NC)PL? 6 A*)N)TAT)B? LA4# 572 (1@th edn.# 2013&. 70 D11# 6a"tsheet. 71 Supra# note 3:. 72 Centre for Pu+l" )nterest Lt!aton . Unon of )nda# A) 2012 C 1. 73 D5# 6a"tsheet. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 25
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 hae not +een +rea"hed as there as no a"tual ta,pern! th the pro"ess. The test lad don n Tata Cellular 55 s not appl"a+le# as t reures suff"ent ne8us +eteen the to partes to +e proen. )n ths "ase# the alle!ed "orrupt pa<,ents ere pad to a "onsultn! fr,# and ere dul< a""ounted for n the +oos as O pay!ent pay!ent of consultin# fees.75 Therefore# the dentt< of *r. e+ara
,eet the standard reured +< the PCA for esta+lshn! +r+er<.7% 25. 6urther 6urther## the l"ense l"ense as aarded aarded to 5- tar due to the O pheno!enal pheno!enal nature of the bids7@ pla"ed +< 5- tar. Ths as done after an ealuaton of O stipulated stipulated financial and technical criteria .7$ n a "onsderaton of all these fa"ts# t s su+,tted that the
de"son of the H!h Court n no a< proes the Oiolation of a law or re#ulation # +ut s ,erel< on the !rounds of a O possibility possibility of bias. )n ths "ase# there s no dre"t or "orro+orate eden"e of de,and and a""eptan"e of +r+e# h"h as per the de"son n '."adha 6rishna!urthy, 6rishna!urthy,59 ,eets the standard to ae "orrupton "har!e. 2%. )n an< eent# eent# een f t ere to +e a""epted a""epted that *r. antha antha an!a as en!a!n! en!a!n! n "orrupt dealn!s# the +la,e for the sa,e "annot +e ,puted to the Co,pan<. The Court n (ridiu!,78 dealn! th the ueston of attr+uton of !ens rea# folloed the standard lad lad don don n Tesco ,71 h" h"h h held held that that the the !ens rea of an e,plo
7@ D3# 6a"tsheet. 7$ D2# 6a"tsheet. 7: *. adha Ershna,urth< . . tate# (2002& Cl.L9 2%2 50 )rdu, )nda Tele"o, Ltd . *otorola )n"orporated I rs.# A) 2011 C @7. 51 Tes"o uper,arets Ltd . Nattrass# =1:@1> 2 4L 11%%. 52 ;.@# Clarf"atons. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 26
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 as not the Oalter e#o of the Co,pan<. ?en th re!ard to the l"ensn! pro"ess# *r. an!a an!a as as not not leadn leadn! ! the the l"en l"ense se "o,, "o,,tt ttee ee##53 and theref therefore ore## as as not !rante !ranted d e8e"ute authort< authort< +< the Co,pan<. Co,pan<. )n ths s"enaro# s"enaro# therefore# he as not actin# as the co!pany and his !ind was not the !ind of the co!pany V.57 He had +een entrusted
th hs tass +< a s. TH? PAG*?NT *A? 4?? L?-)T)*AT?
2@. )t s su+, su+,tte tted d that the pa<,ents pa<,ents ,ade +< 5- tar to the "onsultn! "onsultn! "o,pan< "o,pan< ere le!t,ate pa<,ents# thorou!hl< a""ounted for and therefore there s no +rea"h of arrant<. 2$. Th Thee pa<,ent pa<,entss ,ade ,ade ere quid pro quo for O strate#ic strate#ic adisory serices55 o+taned fro, the "onsultan"< fr,# as s shon n the +oos of 5- tar .5% These pa<,ents ere not Oin resp ere s,pl< s,pl< "o,pen "o,pensat sato on n for ser ser"es "es respect ect of an offi officia ciall act act 5@# +ut ere proded. The nature of these ser"es s nherentl< nherentl < a!ue and ntan!+le# ntan!+l e# and falure to prode O precise precise5$ detals a+out these ser"es "annot +e a !round for rendern! the transa"ton as Ocorrupt or a O sca! sca!. 2:. )n an< eent# eent# these pa<,ents pa<,ents ere onl< for the adsor< adsor< ser"es ser"es proded proded +< *r e+ara
53 ;.:# Clarf"atons. 57 Tes"o uper,arets Ltd . Nattrass# =1:@1> 2 4L 11%%. 55 D10# 6a"tsheet. 5% (d. 5@ e". @# Preenton P reenton of Corrupton A"t# 1:$$. 5$ D10# 6a"tsheet. 5: e"he< Lal . e8# =1:50> AL9 5@. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 27
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 of briberyV.%0 )n the nstant "ase# the pa<,ents ere "o,pensaton for the a"t of
prodn! adsor< ser"es# and thou!h ad,ttedl< ,a< rase a susp"on of +asS do not proe an e8sten"e of +as. =C>. TH? L)C?N? 4A C*PL?T)N 6 TH? ?AL 4A NT ;UAH? UNT)L A6T? C
30. )t s su+, su+,tte tted d that 5- tar aldl< aldl< held all the l"enses l"enses and approals approals to "arr< on +usness at the t,e of the s!nn! of the AA# therefore an< later "hallen!e to the l"ense ould not a,ount to a Obreach of warranty . The onl< date at h"h the arrant< "an poss+l< +e +rea"hed# th respe"t to Clause %.5 of the AA# s the date at h"h the deler< of the shares as ,ade.%1 )n the nstant "ase# on ths date# 5tar as the ald holder of all l"enses. Therefore# Therefore# at the t,e of s!nn! the "ontra"t# 5- tar as not n +rea"h of an< arrant< re!ardn! the Cal"utta l"ense# as there as no ,srepresentaton re!ardn! the aala+lt< of l"enses.
III. THE INCIDENTS SURROUNDING
THE ARPU DO NOT CONSTITUTE A BREACH
OF REPRESENTATION
31. )t s su+,tted that there as no +rea"h of representaton representaton as the "orre"t f!ure of APU APU had +een suppled to Celltone. The su+,sson s on three !rounds. First # the "orre"t f!ures f!ures ere supp suppled led.. A Second # Celltone had the opportunt< of "ondu"tn! due dl!en"e B. Third # n an< "ase# there as no fraudulent ,srepresentaton. C. =A>. TH? C?CT 6)-U? 4?? UPPL)?
32. )t s su+, su+,tte tted d that 5- tar prode proded d the "orre"t "orre"t f!ures after enur< enur< durn! due dl!en"e# and therefore# there as no su!!eston of a ron! fa"t. 33. The ntal f!ure f!ure of s.250 as not a representaton representaton of fa"t# +ut ,erel< O preli!inary preli!inary infor!ation sub$ect to the purchasers’ ability to chec that infor!ation in the course of the due dili#ence inesti#ation of the co!pany, which all parties understood would
%0 e"he< Lal . e8# =1:50> AL9 5@. %1 Pro"ter and -a,+le (Health and eaut< Care& Ltd . Carrer Holdn!s# =2003> ?4HC $3. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 28
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 representaton to +e "arred nto the "ontra"t# +ut follow.%2 The ntal f!ure as not a representaton ,erel< a prel,nar< nd"ator of O pro$ected un"ertan#%3 pro$ected reenue’ # h"h s nherentl< un"ertan# and su+Je"t to due dl!en"e. The nfor,aton proded +< 5- tar durn! the due dl!en" dl!en"ee e8er"s e8er"se# e# h"h h"h s the ds"la, ds"la,er er a+out a+out ds"ount ds"ountss and re+ates re+ates proded proded durn! the "onferen"e "all# s the representaton representaton to +e "arred nto the "ontra"t# and the sad nfor,aton as true and "orre"t. 37. 6urt 6urther her## und under er e"t e"to on n 12 of the )T A"t# "t# n the the a+sen a+sen"e "e of a stpu stpulat laton on that the the a"noled!e,ent of nfor,aton should +e "o,,un"ated n a "ertan ,anner# the "o,,u "o,,un n"at "aton on of nfor nfor,a ,ato ton n s sad sad to +e "o,ple "o,plete ted d hen hen the "ondu "ondu"t "t of the the addressee s suff"ent to nd"ate to the or!nator that the nfor,aton has +een a"noled!ed.%7 Th Ths s pro pros so on n s appl appl" "a+ a+le le n the the nst nstan an"e "e "ase "ase +e"a +e"aus usee the the nfor,aton as trans,tted n a for,at h"h ,eets the defnton of Oelectronic record as per the )T A"t.%5 )n the present "ase# there as no su"h stpulaton and
Cellton Celltonee thout thout rasn! rasn! an< o+Je"t o+Je"tons ons re!ardn re!ardn! ! ths ssue ssue pro"eede pro"eeded d th th the "ontra"t.%% The "ondu"t "ondu"t of Cellto Celltone ne therefor thereforee nd"ate nd"atess ether ether ass,l ass,lato aton n of the nfor,aton# or ns!nf"an"e of ths nfor,aton to Celltone. A reasona+le thrd part< ould assu,e the, to +e satsfed th the response. The +urden of ds"losure s therefore lfted fro, 5- tar# ho ,ade the "orre"t representaton# and Celltones "ondu"t nd"ates a"noled!e,ent of ths representaton. =>. C?LLTN? HA TH? A)L)TG T CNUCT U? )L)-?NC?
35. )t s su+, su+,tt tted ed that that Cell Cellton tonee had the the ,eans ,eans of ds"o ds"oer ern! n! the trut truth h +< ordna ordnar< r< dl!en"e. urn! the due dl!en"e e8er"se# 5- tar had no ntenton to "on"eal ths nfor,aton and pro,ptl< responded to the enur<.%@ Thus# the e8"epton lad don n
%2 Phoen8 )nternatonal Lfe "en"es . lett# =2001> CC 115. %3 ottn )nternatonal )nest,ents Ltd . Benson Benson -roup pl"# =2007> ?4CA C 13%$. %7 e". 12(+&# )nfor,aton Te"hnolo!< A"t# 2000. %5 e". 2(t&# )nfor,aton Te"hnolo!< A"t# 2000. %% D12# 6a"tsheet. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 29
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 e"ton 1: of the )ndan Contra"t A"t apples and the respondents "annot +e held la+le for ,srepresentaton or fraud.%$ 3%. Addto Addtonall< nall<## the prn"pl prn"plee of "aeat "aeat e,ptor e,ptor apples# apples# and the partes partes ou!ht to hae safe!uarded ther on nterest nterest..%: Celltone "annot es"ape ts on ne!l!en"e durn! due dl!en"e# and ,pute the +la,e for ts on falure of ass,laton of nfor,aton onto 5- tar.
=C>. ) N ANG ?B?NT# TH?? 4A 4A N 6AUUL?NT *)?P??NTAT)N
3@. )n order order to su""essf su""essfull ull< < +rn! +rn! a "la, "la, for fraud# fraud# t ,u ,ust st +e proe proen n that that there there as as su!!eston of an untrue fa"t# th the ntenton to ndu"e the other part< to enter nto the "ontra"t# and ths su!!eston as reled upon +< the other part<. part<.@0 3$. )t s su+ su+, ,tt tted ed that that n ths ths "ase# none of the the three three ele,en ele,ents ts hae hae +een +een ,et# ,et# and therefore a "la, for fraud "annot +e sustaned. 3:. )n the nstant "ase# 5- tar tar has not ,ade a su!!eston of an untrue fa"t. fa"t. The "orre"t "orre"t nfor,aton as ds"losed +< 5- tar personnel durn! due dl!en"e.@1 The fault for Celltones na+lt< to ass,late su"h nfor,aton# and pro"eed thout "larf"aton "annot +e ,puted to 5- tar.@2 The representaton ,ade +< the 5- tar off"als s
%@ D12# 6a"tsheet. %$ e" 1:# )ndan Contra"t A"t# 1$@2. %: hr Ershnan . Eurushetra Unerst<# A) A) 1:@% C 3@% @0 C Thaar . -uJarat H- oard# A) 1:@3 -uJ 37. @1 D12# 6a"tsheet. A"uston# CA No.1@5%MN. (el. Ch 200%&. @2AG Partners . 6I4 A"uston#
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 30
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 therefore that the f!ure as Owithout re#ard to discounts, rebates and refunds #@3 and ths representaton s "ate!or"all< true. 70. 5- tar had no ntenton to de"ee the other part< nto entern! the "ontra"t. "ontra"t. Ths s nd"ated +< the response !en +< the 5- tar off"al durn! the telephone "all.@7 The fa"t that the response a+out Odiscounts and rebates as !en pro,ptl< nd"ates a la" la" of !ens rea on the part of Celltone# ho dd not tr< to hde or o+fus"ate ths nfor,aton. 71. Celltone Celltone ,!ht "ontend that the ssue as ,ateral and relan"e as +en! +en! pla"ed on t +< the,. Hoeer# the respondents su+,t otherse. The< had the ,eans of ds"oern! the truth. The fa"t that Celltone ent ahead th the "ontra"t# despte noled!e noled!e and nfor,aton nfor,aton fro, A partners that Othe co!ponents that went into the calculation of the &"4: !ay not be unifor! across countries #@5 and thout
ass,laton of the "one
IV. THE DAMAGES CLAIMED
ARE INCORRECT AND SHOULD NOT BE AWARDED .
72. )t s su+, su+,tte tted d that there there has +een no +rea"h of representat representaton on or arrant< arrant< +< the respondents# as proen a+oe. )n the nstant "ase# therefore# no da,a!es should +e aarded to Celltone. 73. )n an< "ase# een f the Court fnds the respondents respondents to +e n +rea"h of a arrant<# arrant<# t s su+,tted that the da,a!es "la,ed are n"orre"t and should not +e aarded. The nde,nf"aton o+l!atons of the respondents are l,ted to 50 of the pur"hase "onsderaton and da,a!es !reater than ths should not +e aarded. aarded.@% @3 D12# 6a"tsheet. @7 D12# 6a"tsheet. @5 D12# 6a"tsheet. @% Cl. 10.1# Append8 A# 6a"tsheet. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 31
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 77. )n an< eent# f t s Jud!ed to +e a fraudulent +rea"h +rea"h of arrant<# arrant<# the heads of da,a!es as esta+lshed n ion ;athan td %% reure that onl< a"tual loss suffered +< Celltone should +e aarded as da,a!es. )n the nstant "ase# the rule of Oactio quanti !inoris should +e appled and the da,a!es should +e "al"ulated +< the Court on the +ass of the dfferen"e +eteen the pur"hase "onsderaton and the a"tual aluaton of the +usness.@$ Hen"e# da,a!es seen! the entre pur"hase "onsderaton should not +e aarded.
V.
BAND BANK IS ANK IS
NOT OBLIGATED TO RELEASE THE ESCROW AMOUNT
75. )t s su+, su+,tte tted d that and an s not +ound to release release the es"ro es"ro a,ount a,ount sn"e the es"ro a!ent s +ound to follo the nstru"tons n the es"ro a!ree,ent str"tl< and the "ondtons for ts release hae not +een ,et.@: A""ordn! to the a!ree,ent# the es"ro es"ro a,oun a,ountt as as to +e apple appled d toar toards ds satsf satsfa"t a"to on n of an< nde, nde,nf nf"a "at ton on o+l!atons of )nd*o+le and 5- tar that ,a< arse under the AA.$0 )t s su+,tted that no nde,n nde,nf"a f"aton ton o+l!aton o+l!aton has arsen for three three reasons. reasons. First # there as no +rea"h of arrant<# ar rant<# representaton# "oenant# a!ree,ent# fraud or del+erate del +erate o,sson. A Second # the sut fled +< Celltone s pre,ature B. Third # Celltone "annot "la,
nde,nt< for da,a!es "aused due to ts on ne!l!en"eC. =A>. TH? ) N?*N)6)CAT)N N?*N)6)CAT)N L)-AT)N HAB? NT ??N T)--??
7%. As su+,tted a+oe# there has +een no +rea"h of arrant<# arrant<# representaton representaton et". and thus no nde,nf"aton o+l!atons hae arsen. The es"ro a!ent s +ound to follo the nstru"tons str"tl< and "annot release the es"ro a,ount +efore the "ondtons hae +een ,et. $1 6urther,ore# no la+lt< atta"hes atta"hes to the es"ro holder for hs falure to do @@ Lon Nathan Ltd . CC ottlers# =1::%> 1 4L 173$. @$ 6ortune . 6raser# =1::3> CL 7@0. @:*al . an of Credt# =1::@> UEHL 23. $0 D:# 6a"tsheet. $1 *al . an of Credt# =1::@> UEHL 23. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 32
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 so,ethn! not reured +< the ter,s of the es"ro or for a loss n"urred hle o+edentl< follon! hs es"ro nstru"tons.$2 Hen"e# t s su+,tted that and an "annot +e ordered to release the es"ro a,ount. =>. TH? U)T 6)L? G C?LLTN? ) P?*ATU?
7@. )t has +een held +< the Courts that a "ause of a"ton for seen! nde,nt< ould ould arse onl< hen the da,a!e s suffered +< the nde,nt< holder and f a sut s +rou!ht +efore a"tual loss t ll +e a pre,ature sut.$3 )t s su+,tt su+,tted ed that the sut fled s pre,ature sn"e sn "e no da,a!e da ,a!e has +een + een "aused or no a"tual a "tual loss has +een n"urred +< + < the partes. )n "ases of nde,ntes nde ,ntes a proof that loss los s s suffered s reured.$7 )n the nstant "ase# the loss ould o""ur onl< n the eent of ts alle!atons of +rea"h of arrant<# representaton et" +en! upheld +< the Court. 6ln! a sut +efore the da,a!es +en! proed to hae +een suffered s pre,ature. ?en f t s a""epted that suffern! a"tual loss s not ne"essar< and the nde,nfer "an +e "alled upon to nde,nf< een hen an a+solute la+lt< has +een n"urred +< the nde,nt< holder or hs "la, has "r. C?LLTN? CANNT ??E ) ) N?*N)TG 6 A*A-? CAU? G )T 4N N?-L)-?NC?.
7$. )t s a ellMesta+lshed ellMesta+lshed prn"ple that the s"ope of an nde,nt< nde,nt< "lause "annot e8tend to "ases here the part< has "aused har, to tself due to ts on ne!l!en"e unless the $2Carlsen . e"urt< Tru Trust st I a. an# 205 Cal. 302 (Cal. 1:2$&. $3 hanar N,+aJ hntre and others s. La8,an updu hele and others# A) 1:70 o, 1%1. $7 tate an of aurashtra . Asht hppn!# A) 2002 C 1::3. $5 9et Ara
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 "lause "lause e8pres e8pressl< sl< prod prodes es so.$@
The ords ords Oany and all da,a!es n the
nde, nde,nf nf"a "ato ton n "lause "lause "annot "annot +e read read as eua eualen lentt to an e8pre e8press ss refere referen"e n"e to ne!l!en"e sn"e the< are no ,ore than ords of e,phass.$$ )t s su+,tted that Celltone Celltone as ne!l!ent n the nstant "ase. The "orrupton ,atter as not nest!ated nest!ated een after *r. -an!ston a"ured noled!e a+out the dealn!s of the "o,pan< th the !oern,ent.$: A "larf"aton as not sou!ht re!ardn! the "o,ponents n"luded n "al"ulat "al"ulaton on of APU een thou!h thou!h the "onferen "onferen"e "e "all !ot nterrup nterrupted ted ,dMa< ,dMa<.:0 6urther,ore# Lo) had een +een proded to the professonal a!ents en!a!ed +< Celltone Celltone durn! the due dl!en"e dl!en"e +ut no a"ton as taen at the t,e.:1 Thus# Celltone faled to tae steps that ere reasona+l< reured on ts part and hen"e as ne!l!ent n ts dealn!s th )nd*o+le. Celltone thus "annot "la, nde,nt< for the losses n"urred due to ts on ne!l!en"e.
VI. DLA
IS NOT LIABLE TO PAY D DAMAGES TO CELLTONE
7:. )t s su+,tted that LA "annot +e held la+le for rendern! rendern! an n"orre"t opnon. The The su+, su+ ,ss sson on s on four four !round !rounds. s. First # an n"orr n"orre"t e"t opnon opnon s not a"tona a"tona+le +le A. Second # LA oed no dut< of "are to Celltone and "annot +e sued +< the, B. Third #
n an< "ase# the opnon "annot +e "onsdered n"orre"t n l!ht of the assu,ptons on h"h t as +ased C Fourth# Celltones on ne!l!en"e e8"eeded that of LA and hen"e t "annot +e held la+le +< the, (" =A>. A N ) NC?CT P)N)N ) NT ) NT ACT)NAL?
$@ ,th . outh 4ales t"h!ear# =1:@$> 1 4L 1%5. $$ ,th . outh 4ales t"h!ear# =1:@$> 1 4L 1%5. $: D %# 6a"tsheet. :0 D12# 6a"tsheet. :1 ;.3# Clarf"atons. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 34
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 50. A state, state,ent ent on h"h h"h la+lt< la+lt< "an +e +ased +ased ,ust not +e one of opnon# opnon# est,at est,atee or Jud!,ent.:2 Le!al opnons are e8pressons of professonal Jud!,ent# not #uarantees O#uarantees that a court will reach the sa!e conclusions as the opinion #ier. :3 ased on ther
er< ttle# the opnon letters "annot +e "hara"terRed as factual Ofactual #uarantees.:7 )t s su+,tted that the opnon proded +< LA# as not a fa"tual !uarantee and dd not ,ae t an nsurer of the soundness of ts opnon and hen"e "annot +e held la+le on the !round that t s n"orre"t.:5 Attorne. LA 4? N UTG 6 CA? T4A C?LLTN?
51. Ad,ttedl< Ad,ttedl<## an attorne< "an +e held la+le for ne!l!ent ,srepresentato ,srepresentaton n to a thrd part< nonM"lent. n onM"lent. Hoeer# for there to +e la+lt<# the plantff p lantff ,ust esta+lsh that the defendant oed the nonM"lent a dut<. dut<.:@ )t s a ellMesta+lshed prn"ple that the ,ost ,portant dut< of an attorne< s to uphold the nterest of the "lent.:$ A dut< of reasona+le "are of the attorne< to the nonM"lent "annot e8st f su"h an ndependent dut< ould potentall< "onfl"t th the dut< the attorne< oes to hs or her "lent.:: The "onfl"t need not ne"essarl< +e a"tual# een potental "onfl"t of nterest "an +e :2 ,,er,an . Eent# 5@5 N.?.2d @0 (*ass. App. Ct. 1::1&. 93 4ashn!ton ?le" Coop )n" . *ass *un 4holesale ?le" Co# $:7 6 supp @@@# @:0 (1::5&. = Washin#ton
:7 Washin#ton
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 35
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 used to deter,ne the e8sten"e of a dut< toards a nonM"lent.100Assu,n! that the do"u,ents do"u,ents perused +< + < LA# nd"ated a poss+le +rea"h of AA# LA had no dut< to ds"lose t to Celltone sn"e there e8sted "onfl"tn! nterests nterests +eteen the to partes. 4hle 4hle Cell Cellton tonee ante anted d to prote prote"t "t ts nes nest, t,ent ents# s# )nd*o )nd*o+l +le ess ntere nterests sts led led n ensurn! that Celltone nested n ts "o,pan<. n! to su"h "onfl"tn! nterests# LA had no dut< of "are toards Celltone and thus "annot +e held la+le +< t. =C>. ) N ANG CA? # TH? P)N)N CANNT ? CN)?? ) NC?CT )N L)-HT 6 )T AU*PT)N
52. 52. Th Thee le!a le!all opn opno on n has has +een +een "lea "learl rl< < and and une uneu uo o"a "all ll< < "r" "r"u, u,s" s"r r+e +ed d +< the the ualf ualf"a "at tons ons that that the respo responde ndent ntss assu, assu,ed ed all all state state,e ,ents nts as to ,atte ,atterr of fa"t fa"t "ontaned n the AA to +e Otrue, accurate and co!plete. 101 )t s further ualfed +< the assu,pton that there ere no fa"ts or "r"u,stan"es n e8sten"e h"h "ould render the AA od or oda+le due to reasons of fraud or ,srepresentaton.102 The respondents +ased ths assu,pton on the AA and the do"u,ents perused +< the, and undertoo no further nest!aton nest!aton n as"ertann! as"ertann! those fa"ts. tated assu,ptons assu,ptons shft the respons+lt< to the opnon re"pent for "onfr,n! the assu,ed fa"ts for tself or tan! the rs that hat s assu,ed ,!ht turn out to +e untrue.103 53. Therfore# Therfore# t s su+,tted that LA LAs state,ents state,ents n the le!al opnon# +ased on these assu,ptons do not a,ount to ,srepresentaton. Ths has +een held n the "ase of Fortress Credit Corp .107 )n ths "ase the opnon letter "onssted of an assu,pton that
the s!natures on all of the do"u,ents ere !enune and that all of the do"u,ents t :: La,are . as+anes# 71$ *ass. 2@7# 2@% (1::7&. 100 *ller . *oone<# 731 *ass. 5@# %3 (2000&. 101 Append8 # 6a"tsheet. 102 Append8 # 6a"tsheet. 103 *. -urs -urson on et et al# al# L?-AL P)N)N
)N ) NT?NAT)NAL NT?NAT)NAL
TANACT)N# 53 (7th edn#
2003&. 107 6ortress Credt Corp . e"hert# LLP :37 LLP :37 N.G..2d 11: (App. . 2011&. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 36
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 had seen ere authent". authent". As t turned out# all of these do"u,ents ere for!ed# +ut the Court held that the opnon letter was clearly and unequiocally circu!scribed by alloed to +e read as f all of the do"u,ents these qualifications.3 187 The opnon as alloed ere approed and s!ned +< the +orroers and the la fr, as not held la+le. The sa,e sa,e has +een +een held held n ;olte18= here the "ourt held that the nestors "ould not reasona+l< hae hae reled on the opnon opnon that "ontaned ,ore ,ore Wred fla#sW than assuran"es assuran"es and the opnon as as not false +e"ause +e"ause t stated t as as +ased on the fa"ts proded proded +< the "lent and that the opnon !er had not "ondu"ted an< nest!aton. 57. )n ths "ase# LA has e8pl"tl< e8pl"tl< stated n the opnon letter letter that the opnon s >based assu,ptons stated theren.10@ Hen"e t "annot +e held la+le on and sub$ected to3 the assu,ptons for an n"orr n"orre" e"tt opno opnon n een een f there there as as a fraud fraud or ,sre ,srepre prese senta ntat ton on n the the transa"ton sn"e t had not taen undertaen an< ndependent nur< and had +ased ther opnon on the assu,ptons e8pl"tl< stated. =>. C?LLTN? 4N N?-L)-?NC? ?C?? THAT 6 LA
55. Assu,n! Assu,n! LA as ne!l!ent ne!l!ent n nest!aton# the ne!l!en"e of Celltone e8"eeded that of LA. )t had a,ple opportuntes opportuntes to ds"oer a+out the "orrupton ssue and the Lo) n ueston. 4hen the opnon re"pents ne!l!en"e e8"eeds that of the opnon !er# the opnon !er s e8"ulpated entrel< for not ,an! proper nest!aton +efore !n! the opnon op non due to the re"pents re"p ents on ne!l!en"e.10$ 5%. )n the nstant "ase# *r. -an!ston# -an!ston# the proJe"t ,ana!er of Celltone# had "o,e a"ross "erta "ertan n reel reelat atons ons a+out a+out "orru "orrupt pton on hle hle nes nest t!at !atn n!# !# +ut the ,atte ,atterr as as not pursued further.10: The Lo) too as !en to Le8,an Asso"ates and A Partners durn! the due dl!en"e pro"ess.110 Ths nd"ates the< had suff"ent opportuntes opportuntes to ds"oer the fraud and ,srepresentaton. There ne!l!en"e# n ths "ase# e8"eeds that 105 6ortress Credt Corp . e"hert# LLP :37 LLP :37 N.G..2d 11: (App. . 2011&. 10% Nolte Pearson# ::7 6.2d 1311 ($th Cr. 1::3&. 10@ Append8 # 6a"tsheet. 10$ -re
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 of LA# LA# f an<# an<# and and thus thus LA LA "annot "annot +e held held la+l la+lee for the sa,e. sa,e. Hen"e Hen"e## t s su+,tted that LA s entrel< e8"ulpated fro, la+lt< n ths "ase sn"e Celltones ne!l!en"e ne!l!en"e e8"eeded that of LA. )n l!ht of the a+oe su+,ssons# su+,ssons# t s aerred that LA s not la+le to pa< an< da,a!es to Celltone.
PRAYER
4herefore n l!ht of the ssues rased# ar!u,ents adan"ed and authortes "ted# t s hu,+l< pra
110 ;.3# Clarf"atons. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 38
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
APPENDIX I
A" R ELE:ANT ELE:ANT PRO:ISIONS FROM LEGISLATIONS; 1" S!." 2+$, 2+$, In8& In8&a$i&n a$i&n T!./n&3&6 ./n&3&6 A.$ A.$ 2000"
Wele"tron" re"ordW ,eans data# re"ord or data !enerated# ,a!e or sound stored# re"eed or sent n an ele"tron" for, or ,"ro fl, or "o,puter !enerated ,"ro f"he. 2" S!." 12, 12, In8& In8&a$i& a$i&n n T! T!./n&3&6 ./n&3&6 A.$ A.$ 2000" 2000"
(1& 4here the or!nator has not a!reed th the addressee that the a"noled!,ent of re"ept of ele"tron" re"ord +e !en n a part"ular for, or +< a part"ular ,ethod# an a"noled!,ent ,a< +e !en +72" 1>72"
Boda+lt< of a!ree,ents thout free "onsent.X 4hen 4hen "onse "onsent nt to an a!ree a!ree,e ,ent nt s "ause "aused d +< "oer" "oer"on on## fraud fraud or ,sre ,srepre presen sentat tato on# n# the a!ree,ent s a "ontra"t oda+le at the opton of the part< hose "onsent as so "aused. (?8"epton& (?8"epton& X )f su"h "onsent as "aused +< ,srepresentaton ,srepresentaton or +< slen"e# fraudulent fraudulent thn thn the ,eann! ,eann! of se"ton se"ton 1@# the "ontra"t# "ontra"t# neerthele neertheless# ss# s not oda+le# oda+le# f the part< part< hose "onsent as so "aused had the ,eans of ds"oern! the truth th ordnar< dl!en"e. 4" P&?i& P&?i& $& S!.$i& S!.$i&n n 5>+2, 5>+2, C&9ani C&9ani! ! A.$, A.$, 201<; 201<;
(2& 4thout preJud"e to su+Mse"ton (1&# the se"urtes or other nterest of an< ,e,+er n a pu+l" "o,pan< shall +e freel< transfera+le transfera+l e *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 39
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 Proded that an< "ontra"t or arran!e,ent +eteen to or ,ore persons n respe"t of transfer of se"urtes shall +e enfor"ea+le as a "ontra"t.
5" S!.$ S!.$i&n i&n 11 111A+2, 1A+2, C&9ani! C&9ani! A.$, A.$, 1=5@; 1=5@;
(2& u+Je"t to the prosons prosons of ths se"ton# the shares or de+entures de+entures and an< nterest theren of a "o,pan< shall +e freel< transfera+le =Proded that f a "o,pan< thout suff"ent "ause refuses to re!ster transfer of shares thn to ,onths fro, the date on h"h the nstru,ent of transfer or the nt,aton of transfer# as the "ase ,a< +e# s delered to the "o,pan<# the transferee ,a< appeal to the 3 =Tr+unal> and t shall dre"t su"h "o,pan< to re!ster the transfer of shares>. SUMMARIES OF R ELE:ANT ELE:ANT CASE LA)S A)S
1. Cente !" !" P#$%&' Intee(t Intee(t L&t&)*t&"n +. Un&"n "! In,&* 111 )n ths "ase re!ardn! the allo"aton of 2- pe"tru,# the standard for settn! asde of the tendern! pro"ess as lad don. The Court held that an< dstr+uton dstr+uton oer natural resour"es resour"es should tae pla"e n a ,anner that ,a8,Res the "o,,on !ood. 6urther# the do"trne of reasona+le +as as adopted +< the Courts# h"h held that the standard for settn! asde -oern,ent "ontra"ts as the standard of a Oposs+lt< of +as n the e
The appellant as offern! a ds"ount on ashn! poder h"h as adertsed on posters dspla
111 Centre for Pu+l" )nterest Lt!aton . Unon of )nda# 2012 3 CC 1. 112 Tes"o Tes"o uper,arets Ltd . Nattrass# 1:@1 UEHL 1. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 40
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 The House of Lords a""epted the defen"e and found that the ,ana!er as not a Wdre"tn! ,ndW of the "orporaton and therefore hs "ondu"t as not attr+uta+le to the "orporaton. Thee "orp Th "orpor orat ato on n had had done done all all t "oul "ould d to enfo enfor" r"ee the the rule ruless re!a re!ard rdn n! ! ade adert rts sn n!. !.
Lord ed held that WThe person ho a"ts s not spean! or a"tn! for the "o,pan<. He s a"tn! as the "o,pan< and hs ,nd h"h dre"ts hs a"ts s the ,nd of the "o,pan<. )f t s a !ult< ,nd then that !ult s the !ult of the "o,pan<.W
-. P"en&/ Inten*t&"n*% L&!e S'&en'e( S'&en'e( In'. +. R&%ett 11The plantffs plantffs entered nto ne!otatons ne!otatons to pur"hase a "o,pan< n respe"t of h"h re"eers# the defendants# had +een apponted. The plantffs ere part"ularl< nterested n the e8tent of the "o,pan<s outstandn! de+tors and the alue of a +a"lo! of "ontra"t or. urn! the "ourse of prel,nar< ds"ussons# the defendant !ae an est,ate of +oth those alues and the plantff ,ade an offer to pur"hase the "o,pan< su+Je"t to "ertan "ondtons# a due dl! dl!en en"e "e e8er" e8er"se se and the the We8e"u We8e"uto ton n of a ,u ,utua tuall< ll< sat satsfa sfa"to "tor< r< "ontra "ontra"t "tW. W. ne ne of the the "ondtons as that a pa<,ent of -P 200#000# ,ade +< the plantff on a""eptan"e of the offer# ould +e returned f the plantff ere to thdra fro, the transa"ton due to +rea"h of an< of the spe"fed "ondtons or s!nf"ant due dl!en"e fndn!s. The plantff su+seuentl< su+seuentl< ds"oered that the alues ere su+stantall< less than those !en n the est,ate. The plantff thdre ts offer and ssued pro"eedn!s for re"oer< of the -P 200#000 )t as held +< the Court that the offer letter as not n tself a "ontra"t# +ut an a!ree,ent to "ontra"t n the future. The est,ate as the +est h"h the defendant "ould prode at the t,e +ut as su+Je"t to the plantff plantff "arr<n! out detaled "he"s# as understood +< all partes at the t,e. The prel,nar< est,ate est,ate therefore# as not a"tona+le and no ,srepresentato ,srepresentaton n had taen pla"e +< rtue of the prel,nar< nfor,aton. 4" F&$ F&$! ! C!d C!di$ i$ C&9 C&9 ?" ?" (!./! (!./!$ $ 114
)n ths "ase# the lender (pettoner& a!reed to loan the +orroers so,e ,one< on the "ondton that the +orroers hre an ndependent la fr, to ssue an opnon letter to the lender. 113 Phoen8 )nternatonal Lfe "en"es )n" . lett# 2001 CC 115. 117 6ortress Credt Corp . e"hert# LLP :37 N.G..2d 11: (App. . 2011&. *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 41
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 reer# the la
for!ed do"u,ents# the lender sued e"hert. Althou!h the "ourt held that the lender "ould sue e"hert +e"ause t found Wnear prt<#Wt ult,atel< de"lned to hold e"hert la+le for da,a!es to the lender. The "ourt noted that +e"ause the "o,plant "o,plan t dd not alle!e that the lender adsed ad sed e"hert e"her t that ts o+l!atons o+l! atons ere not l,ted to the ree of onl< spe"fed do"u,ents and the "o,plant dd not alle!e that the lender adsed e"hert that t needed to nest!ate# erf<# and report on the le!t,a"< of the loan transa"ton# the lender "ould not esta+lsh that e"hert +rea"hed a dut< of "are. The "ourt also found that e"hert had no reason to suspe"t that the +orroers ere not a"tuall< part"pants n the loan transa"ton or that ther s!natures had +een for!ed. The "ourt found that e"hertFs state,ents n the opnon letter ere not ,srepresentatons# as ould +e reured to fnd la+lt< +e"ause the opnon letter stated that e"hert had not ,ade an ndep ndepend endent ent nu nur< r< nto nto the a""ur a""ura"< a"< of the fa"t fa"tual ual repres represent entat atons ons or "ert "ertf f"at "ates. es. !nf"antl<# e"hert n"luded n ts opnon letter an assu,pton that the s!natures on all of the do"u,ents ere !enune and an assu,pton that all of the do"u,ents t had seen ere authent". The "ourt sad that the opnon letter Was "learl< and uneuo"all< "r"u,s"r+ed +< the=se> ualf"atons.W ualf "atons.W ?ssentall<# these assu,ptons had the effe"t of ena+ln! e"hert e"h ert to ssue the opnon letter as f the "ertf"ates of the +orroers# the resolutons of the +orroers# and the loan do"u,ents ere authorRed +< the +orroers and that the< ere properl< s!ned and delered +< the,. 5" G! G!6/&% 6/&%nd nd L!ain L!ain .& ?" ?" FinN& FinN&!$ !$ Ban' 115
)n ths "ase# the transa"ton transa"ton as ntended to +e a lease/pur"hase# lease/pur"hase# stru"tured n su"h a ,anner as to per,t the lender to tae ,a8,u, adanta!e of arous ta8 "redts. -re
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 42
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 ,a"hner< and eup,ent. -re
)n ths "ase the shares of a prate "o,pan< ere held +< to +rothers and there as an a!ree,ent +eteen the +rothers that ea"h +ran"h of the fa,l< ould hold eual nu,+er of shares. )f an< ,e,+er of the +ran"h shed to sell ts share# frst opton to pur"hase as to +e !en to ,e,+er of that +ran"h. The a!ree,ent as not n"orporated n AA. ne of the ,e,+ers sold the shares n "ontraenton of a!ree,ent. Contenton arose as to sn"e the restr"ton restr"ton as not ensa!ed ensa!ed +< AA# t as not +ndn! on shareholders shareholders or a endee of the shares. )t as unenfor"ea+le at la and not +ndn! on the "o,pan<. upre,e Court of )nda o+se o+ser red ed that that Co, Co,pan panes es A"t ,aes aes t "lea "learr that that AA s +nd +ndn n! ! on "o,p "o,pan an< < and and shareholders and transfer of shares s re!ulated +< AA. The onl< restr"ton on transfer of shares are one "ontaned n AA. estr"tons not spe"fed n AA s nether +ndn! on "o,pan< nor on the shareholders.
11% . an!araJ . B. B.. -opalarshnan and thers# A) 1::2 C 753 *?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 43
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
7" (!! (!! Rand S"A" S"A" ?" M" M" Binda3 Binda3 A& A& C/!i. C/!i.a3 a3 L$d" An&$/ An&$/! ! 117
)n ths "ase# the Court held that that a letter of ntent ,erel< nd"ates a part<s ntenton ntenton to enter nto a "ontra"t th the other part< n future. A letter of ntent s not ntended to +nd ether part< ult,atel< to enter nto "ontra"t. Hoeer# t ,!ht +e "onstrued as a letter of a""eptan"e f su"h ntenton s edent fro, ts ter,s. The ueston hether the letter of ntent s ,erel< an e8presson of an ntenton to pla"e an order n future or hether t s a fnal a""eptan"e of the offer there+< leadn! to a "ontra"t# s a ,atter that has to +e de"ded th referen"e to the ter,s of the letter. Partes ,a< e8press ne!ate "ontra"tual ntenton# +ut here ths s not so# the "ourt "an hold partes +ound +< the do"u,ent# espe"all< hen partes hae a"ted on t# or hae spent ,one< ,one < on ts relan"e. relan" e. A letter of ntent# for e8a,ple# ,!ht ,erel< prode that the offer shall +e left open. >" BaD%d!? BaD%d!? ?" E%&.& E%&.& CaD3! CaD3! Mana!! Mana!!n$ n$ B%3a B%3aii 11>
*arbude "on"erned a sde letter to a hare and Pur"hase A!ree,ent n relaton to the
proposed sale of a ul!aran "a+le TB and nternet "o,pan< h"h appeared to offer *r ar+ude (the nestor& the opportunt< to nest n a nel< ,er!ed entt< on ter,s that ere to +e a!reed n an )nest,ent and hareholders A!ree,ent. The sde letter "onfr,ed that ?uro"o, Ca+le *ana!e,ent ul!ara ? I rs (the sellers of the "o,pan<& ould ne!otate the sale of the "o,pan< n !ood fath and so,e of the prn"pal ter,s of the the nes nest, t,ent ent (n"l (n"lud udn! n! a ,n, ,n,u, u, sale sale f!ure f!ure for for the "o,pan "o,pan< < of not less less than than Y1.%5,llon& ere n"luded. The sde letter as drafted +< la ?4HC 15%0 (;# Co,,&. 11$ *arbude .
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 44
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015 a!ue to +e enfor"ea+le. The out"o,e as therefore the sa,e n the H!h Court as n the Court of Appeal. The sde letter dd no ,ore than prode *r ar+ude th the opportunity to inest in the 4urchase on ter!s to be a#reed between us V# h"h as not the lan!ua!e of a +ndn!
"o,,t,ent# "o,,t,ent# re!ardless of the "o,,er"al "o,,er"al "onte8t and purpose for h"h the sde letter as produ"ed. 4hat *r ar+ude as left th# therefore# the refore# as an a!ree,ent to a!reeV.
=" Panan Panan SP SPA ?" ?" F!!d F!!d P& P&d%. d%.$ $.11:
)n ths "ase# there as a dspute +eteen the partes as to hether ne!otatons for the sale and pur"hase of "orn !luten feed pellets that had +een "ondu"ted a nter,edar< +roers had resulted n a +ndn! "ontra"t. The Court of Appeal held that the< had. Lord 9ust"e Llo
11: Pa!nan PA . 6eed Produ"ts# =1:$@> Llo
7TH NUJS-HSF NATIONAL CORPORATE MOOT COURT COMPETITION , 2014-2015
*?*)AL 6 TH? 6 TH? ?PN?NT ?PN?NTPA-? 46
