anshu private intnl law

8/4/2019 Anshu Private Intnl Law

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Presented byAnshu Pratap Singh

08IP6009



There are five main protagonists

FRANCE◦ Technip

◦ Coflexip

◦ Institut Francais du Petrol (referred to as IFP) which

through its subsidiary ISIS, was a shareholder inTechnip and Coflexip,

INDIA

◦ South East Asia Marine Engineering andConstruction Ltd. (referred to as SEAMEC)- a

subsidiary of Coflexip in the as it controls themajority shareholding in SEAMEC.

◦ SMS Holding (Pvt.) Ltd. and Ors. - the shareholdersof SEAMEC



Technip acquired control in coflexip.Therefore, it also controls SEAMEC

a change of control of SEAMEC Technip wouldbe bound to offer to purchase the shares of the minority shareholders in SEAMEC inaccordance with the provisions of the

Securities And Exchange Board of India(Substantial Acquisition of Shares andTakeover) Regulations, 1997.



Whether Technip acquired control of SEAMECthrough Coflexip in April, 2000, or in July,

2001?

This issue was taken to SEBI.

Importance of date: The price of SEAMEC shares in April 2000 was

Rs. 238 per share which was much higherthan the price of Rs. 43.12 per share in July,

2001.



French law applied to the takeover of Coflexip and consequentlySEAMEC by Technip for the purpose of determining when such

takeover was effected.

Decision

Technip had obtained control of Coflexip in July 2001 Regulations 10 and 12 of the Regulations violated as acquired

58.24% of the shares/voting rights and control in SEAMEC in July2001 without making any public offer.

Technip directed to make a public announcement within 45 daysof its order taking 3rd July, 2001 as the specified date forcalculation of the offered price.

Technip to pay interest at the rate of 15% per annum to thewilling minority shareholders of SEAMEC, for the delayed publicannouncement.

Technip followed the SEBI’s decision



Minority shareholders preferred the appeal Applicable law to the question as to when control of

SEAMEC had been taken over by Technip, was IndianLaw.

Decision

Tribunal directed Technip to treat the relevant date for calculating the offer

price as 12th April, 2000

to pay SEAMEC shareholders the difference betweenthe price of the shares between 3.7.2001 and 12th April, 2000 together with the interest on suchdifference at the rate of 15%.



IssueWhether the impugned transaction is to be judged according to French Law or IndianLaw?



A question of law or fact?

It is a question of law.

However,

Determination as to what French Law isapplicable is a question of fact.



A generally accepted rule of privateinternational law:◦ questions of status of a person's domiciled ought in

general to be recognized in other countries unlessit is contrary to public policy.

STATUS OF CORPORATIONS◦

according to the laws of its domiciled orincorporation subject to certain exceptionsincluding the exception of domestic public policy.

REASON◦ "a corporation is a purely artificial body created by

law. It can act only in accordance with the law of itscreation".



General rule regarding determination of status by the lex incorporations will NOTapply.

because such obligation is imposed by orright arises under statute or contract which isgoverned by the law of such other country.



National Bank of Greece and Athens S.A. andMetliss 58 A.C. 509.

Adams v. National Bank of Greece S.A. 1961 A.C.255, 282

"This was an English debt and the obligation topay it, its quantum and the date of payment, areall governed by English law which will not giveeffect to the Greek Moratorium,"

what was sought to be enforced was not "a Greekright, but a right arising under a contract underEnglish law



The relationship of Technip to Coflexip whetherone of control or not-a question of status-law of their domiciled- French law.

Having determined their status according toFrench Law,

obligation under the Indian Law vis a vis SEAMEC- Indian law (in this case the Act and theRegulations).

SATs error- NOT differentiating between the two

issues of status and the obligation by reason of the status and in seeking to cover both under asingle system of law.



SEBI's order must prevail and the order of SAT

must be set aside



The judgment has very logically tackled thetwo issues .

It is important case as it shows how to applythe law in cases of the conflict of laws and onwhat ground.

anshu private intnl law

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