Parthiban v Oliaji & Ors (CC 8/2016) [2018] SCSC 8262 (18 September 2018)

\ . IN THE SUPREME COURT OF SEYCHELLES Civil Side: CCS/2016 [2018] SCSC g% KARTHIK PARTHIBAN Plaintiff Versus SOONA OLIAJI First Defendant DARIUS OLIAJI Second Defendant MEHER OLIAJI Third Defendant BEROZE OLIAJI Fourth Defendant OLIAJI PROPERTIES AND LEISURE (OPAL) Co. LTD Represented by SOONA OLIAJI Fifth Defendant Heard: Counsel: Mr Camille for plaintiff Mr Shah for defendants Delivered: 19 September 2018 JUDGMENT Robinson J [1] The plaintiff is a Seychellois national. The first, second, third and fourth defendants are the shareholders of the fifth defendant. The fifth defendant is a company incorporated in Seychelles. [2] The plaintiff, by an amended plaint, dated 28 March, 2016, and filed on 30 March, 2016, seeks by way of specific performance of an agreement, dated 9 November, 2006, the transfer by the first, second, third and fourth defendants (the shareholders of the fifth defendant) - jointly and severally - of fifty percent of the shares held by them in the fifth defendant, to the plaintiff. [3] It is not disputed that on 9 November, 2006, Siva Limited Bermuda and the shareholders of the fifth defendant, represented by the first defendant, entered into a joint venture agreement for a tourism project (hereinafter referred to as the ''Joint Venture Agreemenr'i P3. [4] On 31 December, 2012, Siva Limited Bermuda and the plaintiff entered into an ASSIGNMENT AGREEMENT (P21), whereby Siva Limited Bermuda "assigned the ... Joint Venture agreement dt. 09th November 2006 to and in favour of the Assignee [the plaintiff] ". [5] The plaintiff in his amended plaint averred at paragraph 10 - the "Assignment Agreement"), that in pursuance to a further agreement dated 31 December 2012, "lO .... rights, powers and (hereinafter obligations under the Agreement between Siva Limited Bermuda and/or any of its affiliates there under and the Defendants, were duly assigned onto Plaintiff and accepted by Plaintiff as per the terms and conditions stated in the same Assignment Agreement." all Emphasis is mine [6] The plaintiff, in his reply to the defendants' request for further and better particulars of the amended plaint, averred, "3. Under Paragraph 10 of the Amended Plaint: ... (b) As per the same Assignment Agreement, Mr. Sivasankaran assigned all his rights accrued in the agreement of the 9 November 2006 between the Defendants and Siva Limited Bermuda, to Plaintiff'. [Emphasis is mine]. [7] The defendants, in their defence, dated 20 September, 2016, and filed on 20 September, 2016, have raised a number of arguments in limine litis contesting the claim of the plaintiff, specifically - "1. 2. 3. that aver the purported assignment The Defendants by Siva Limited Bermuda to the Plaintiff dated 31 st December 2012 of the joint venture agreement between Siva Limited Bermuda and the first four Defendants dated 9th November 2006 is not valid and binding on the Defendants. The Defendants having consented to this Assignment are not bound by it. are not parties to the said Assignment and not The l " to 4th Defendants having signed ajoint venture agreement with Siva Limited Bermuda having rights and obligations on both parties, cannot be bound by the said Assignment to the same rights and obligations as they have not consented to the Assignment replacing Siva Limited Bermuda by the Plaintiff." [8] The defence on the merits denied the claims of the plaintiff and asked this court to dismiss the amended plaint with costs. Joint Venture Agreement and ASSIGNMENT AGREEMENT [9] In light of the issues raised in this suit, this court finds it appropriate to set out the Joint Venture Agreement and the ASSIGNMENT AGREEMENT (so far as they are relevant)- Joint Venture Agreement: "This agreement made this 9th day of November 2006 BETWEEN The Shareholders of Oliaji Properties and Leisure (OPAL) Co. Ltd represented by Soona Oliaji (Soona) AND Siva Limited Bermuda IT IS AGREED AS FOLLOWS: (I) (2) (3) to their The patties by this agreement wish to bind themselves main obligations to be followed by a more stipulated below, detailed agreement of terms and conditions, which shall provide for the organization, management and good order of the company and project. contribution shall be the land parcels V8734, V8735, Soona's V8737, V8738, V8739, V8740, V8741, V8742, V9062 and V833 J situate at Beau Vallon Mahe totall ing 12591 sq. metres free of any encumbrances which land is valued at 1 Million Pound Sterling. Siva's contribution shall be the sum of Pound Sterling 1 Million, which shall only become due, once planning permission for a Hotel project is approved. However whatever monies are required for preliminary matters and planning permission will be provided by Siva. (4) (i) Each party shall hold 50 % equity in a new company to be formed, or the existing company as me be subsequently decided by the parties. (ii) (iii) Each party shall have an equal number of Directors. The Chairman for the first five years shall be nominated by Soona and the Chairman will not have a casting vote. for The Chairman nominated by Siva. the subsequent 5 years shall be (5) (6) Siva shall arrange (if the parties so decide) for a loan of up to 20% of the project cost at 8.5 % interest, repayment to start once the project shall be from revenue of the project on a priority basis. is operational. Repayment The parties try to resolve amicably, but in the event that this is not possible then shall any disputes between them (a) (b) Soona shall stipulate a price for her shares over which Siva shall have the option of either buying or selling. In the alternate if Soona wants Siva to stipulate a price, then Soona would have the option of purchasing or selling Siva's shares at that price. (7) The completed project shall be managed by a reputable Hotel group. (8) This Agreement shall become operational only after Siva receives a due diligence and communicates his satisfaction therewith to Soona, by a legal counsel in writing. on the properties Made in double original this day, month and year above written ... ", ASSIGNMENT AGREEMENT: "ASSIGNMENT AGREEMENT This Assignment Agreement executed on 3 l" December, 2012 By and Between M/s. Siva Limited Bermuda, a company incorporated under the laws of having ots Bermuda, sregistered address at Clarendon House, 2 Church Street, Hamilton HM 11 Bermuda (hereinafter by its Director C. Sivsankanan, referred to as ASSIGNOR") represented And Mr. Karthik Parthiban S/o. Mr. Ganesan Parthiban aged about 23 years having address at St. Joseph, Anse royale, Mahe, Seychelles (hereinafter referred to as the "ASSIGNEE") WHEREAS The Assignor herein has entered into an Agreement on 9th November, 2006 ("Joint Venture Agreement") with "The Shareholders of Oliaji Properties and Leisure (OPAL) Co. Ltd", a company incorporated under the laws of Seychelles and having its registered address at Seychelles (hereinafter for joint venture of development of land referred to as "the Company") parcels V8734, V8735, V8736, V8738, V8739, V8740, V8741, V8742, V9062, V8331 situated at Beau Vallon Mahe totalling to an extent of 12 59] sq,mtrs. the said Joint Venture agreement, Under the Assignor herein had paid advances to the said Company in a sum of GBP 50,000 on 20th December 2006 and GBP 110,000 on 9th August 2007 ("Advances"). The ASSIGNOR intends to assign the said Joint Venture Agreement to and in favour of the ASSIGNEE herein and is desirous of reducing the same on the following terms: NOW TH1S ASSIGNMENT FOLLOWS: AGREEMENT WlTNESSETH AS 1. The Assignor hereby agrees and confirms to have assigned the said Joint Venture agreement dt.09th November 2006 to and in favour of the Assignee herein. 2. 3. 4. 5. 6. The said Assignment shall take effect from 31'1 December, 2012. The Assignor hereby confirms that henceforth with effect from 3 l " Decem ber, 2012 all the rights accrued to the Assignor under the said Joint Venture Agreement is hereby assigned to the ASSIGNEE herein. the ASSIGNEE herein shall In view of the said Assignment, accrue all rights and control over all investments, advances and services rendered by the M/s. Siva Limited Bermuda under the said Joint Venture Agreement. In view of the said Assignment, the ASSIGNOR herein shall absolve itself from all responsibilities, obligations under the said Joint Venture. Any amount due and payable by the said company including but not limited to the advances GBP 160,000 made by the ASSIGNOR shall henceforth payable to the account of the ASSIGNEE. In view of the said Assignment, henceforth the ASSIGNEE shall decide upon all further course of actions under the said Joint and shall be legally entitled to deal with, Venture Agreement communicate "The and Leisure (OPAL) Co. Ltd". Shareholders ofOliaji Properties and correspond with the said Company IN WITNESS WHEREOF, THE ASSIGNOR AND ASSIGNEE affix their signatures on the day, month and year above written ASSIGNOR ASSIGNEE". The evidence for the plaintiff [10] The evidence of Mr. Chinnadurai Pillai. Mr. Pillai testified on behalf of the plaintiff, pursuant to a general power of attorney. The plaintiff is in California, where he is studying. Mr. Pillai was the "business development manager" of Mr. Chinnakannan Sivasankaran, who is the uncle of the plaintiff. [11] The ASSIGNMENT AGREEMENT "assigned the ... Joint Venture agreement dt. 091h November 2006 to and infavour of the Assignee [the plaintiff]". [12] Mr. Pillai testified that clause 8 of the Joint Venture Agreement was fulfilled. [13] The project obtained approval from the Seychelles Investment Bureau (hereinafter referred to as "SIB'') on 18 February, 2009, P5 following which the issue of the transfer of shares of the fifth defendant to Spring Wonder Limited arose. Spring Wonder Limited is a special purpose vehicle, which was created by Mr. Sivasankaran, on 28 January, 2010, for the hotel project. The first, second, third and fourth defendants resolved, at an "Extraordinary General Meeting", held on 15 July, 2009, to authorise the directors of the fifth defendant to allot 10,000 shares of the fifth defendant to Mr. Sivasankaran. On 30 April, 2010, at a "Meeting of Directors", the directors of the fifth defendant resolved to "allot J 0,000 shares of RJ/- each to Spring WonderLimited of the British VirginIslands ... " (P7). [14] Spring Wonder Limited obtained Government Sanction - "Immovable Property Transfer Restriction Act Sanction for the acquisition of shares in Oliaji Properties and Leisure (OPAL) Limited by Spring Wonder Limited", IPTRl908 of 15 April, 2010, - to acquire shares in the fifth defendant PI O. The said Government Sanction was extended, on 3 April, 2012, for a period of three months, effective from 3 April, 2012, to allow Spring Wonder Limited to complete the procedures for transfer of shares of the fifth defendant. [15] This court sets out PIO (so far as relevant)- "Spring Wonder Limited C/O The Wharf Hotel and Marina P. O. Box 740 Victoria Dear Sirs Immovable Property (Transfer Restriction) Act Sanction for the acquisition of shares in Oliaji Properties and Leisure (OPAL) Limited Sanction is hereby granted to Spring Wonder Limited to subscribe to in Oliaji Properties and 10,000 shares (representing 50% shareholding) Leisure (OPAL) Limited, of £lM (One Million for the consideration British Pound Sterling), subject to the following conditions; 1. 2. The sanction Processing fee of SR 1000 is paid to the Ministry of National Development; Money Processing fee must be brought to pay the Consideration and the Sanction into Seychelles through a local commercial Rupees. bank and exchanged into Seychelles Proof of payment to this effect must be produced to the Registrar General when the deed of transfer is transmitted for registration. Payment of the fee referred to above, must be made in Seychelles Rupees to the respective Government Authority specified above, calculated at the prevailing exchange rate of the Commercial Bank. Your attention is drawn to Regulation 8( 1) of the Immovable Property (Transfer Restriction) Act Fees Regulations 1974 which provides that:- the under granted shall provisions "Sanctions automatically lapse at he end of one year from the date upon which they were first granted if during that time the immovable property or rights therein to which they relate have not been either purchased or leased as the case may be." the Act of " [16] Mr. Pillai also referred this court to a letter dated 6 May, 2010, emanating from the second defendant, in his capacity as a director of the fifth defendant CP8), whereby the fifth defendant acknowledged having received 160,000.00/- pounds sterling from Mr. Sivasankaran in relation to the issue of the transfer of 10,000 shares of the fifth defendant to Spring Wonder Limited. That letter (P8) mentioned "on the confirmation of the receipt [GBP S40,000] by [Oliaji Properties and Leisure Ltd] bankers [they] will immediately issue the share certificate andfile the return of allotment and register the same with Registrar 0.[Companies". Mr. Pillai testified that the project had not received planning permission on the date of receipt of the letter dated 6 May, 2010, (PS). At the time of the receipt of PS Mr. Sivasankaran had requested for a shareholders' agreement on the basis of clause 1 of the Joint Venture Agreement. The parties could not agree to a shareholders' agreement. [17] On 6 October, 2011, Mr. Pillai received a letter from the first defendant - "Re: BEAUVALLON HOTEL PROJECT" - addressed to Mr. Sivasankaran (PI2). That letter (PI2) informed Mr. Pillai that the first defendant did not wish to continue with the hotel project. Mr. Sivasankaran wrote to the first defendant, by a letter dated 23 November, 2011, - "Ref Letter dated 6th October 2011 - Beau Vallon Hotel Project" - informing her that he "demand[s] that the agreement of the 91h November, 2006 which is still valid be respected" (PI3). P12 and P13 led to more written communication between the parties in relation to their respective position with respect to the Joint Venture Agreement (see PIS, PI6, PI7 and PI9). [18] Mr. Basil Hoareau, an Attorney-at-Law, instructed by Mr. Sivasankaran, wrote to the first defendant, on 16 October, 2012, PI9, telling her that they [the first, second, third and fourth defendantsJ have breached their contractual obligations and demanding inter alia that they transfer a "total fifty percent of the shares in Opal to Spring Wonder Limited, failing which legal proceedings will be instituted". [19J He testified that the first, second, third and fourth defendants never allotted to the plaintiff any of the shares of the fifth defendant. [20J He denied the allegations of the defendants, contained in their defence, that Siva Limited Bermuda had breached its agreement by not providing funds to enable the project to obtain Town and Country Planning Authority approval; and that Spring Wonder Limited did not honour Government Sanction conditions. In reply to both allegations, he stated that they were prepared to advance the money upon signature of a shareholders' agreement, which they had asked them [the first, second, third and fourth defendants] to prepare. [21] The plaintiff is seeking by way of specific performance of the Joint Venture Agreement, the transfer by the first, second, third and fourth defendants jointly and severally of fifty percent of the shares held by them in the fifth defendant, to the plaintiff. [22] Mr. Pillai was cross-examined in relation to condition 2 of the Government Sanction conditions. It was put to him that the first, second, third and fourth defendants never transferred any shares of the fifth defendant to Siva Limited Bermuda because Siva Limited Bermuda did not comply with condition 2 of the Government Sanction conditions. His response was that it was a precondition of the Joint Venture Agreement, specifically clause 1 of it, that a shareholders' agreement must be signed, by the parties, before any money is transferred to the bank. Later in the proceedings, he accepted upon being pressed by Mr. Shah, that the Joint Venture Agreement "does not say the pre-condition but it says an agreement shouldfollow. I ". [23] He accepted that SIB's approval was subject to the conditions inter alia that "Planning Authority's approval is requiredfor thisproject"P5. He also accepted that SIB's approval was valid for six months; and that within that period of six months "the procedure for implementation of the project needs to start" P5. With reference to clause 3 of the Joint Venture Agreement, Mr. Pillai admitted that Siva Limited Bermuda was to provide funds to finance "preliminarymatters andplanning permission". He also accepted the content of Dl, which is an email, dated 4 October, 2010, emanating from the second defendant to Mr. Sivasankaran, copied to him, which principally asked Mr. Sivasankaran if "he was able to advance the sum of £750,000.00/- ...within the next couple of months so we may inform the various parties to begin work". That email (01) informed them that the ''project is now at the end of the Concept Design Stage and needs to be taken to Scheme Design Stage and thereafter to Detailed Design Stage ". He also accepted the content ofD2, which is an email, dated 3 August, 2009, emanating from the second defendant to him, which reiterated their demand for funds. He accepted that Mr. Sivasankaran did not advance any money. Exhibit D3, an email dated 4 October, 2010, emanating from the first defendant to Mr. Sivasankaran, copied to one Philip Haller and one Kash Chandarana, informed Mr. Sivasankaran that the first and second defendants have handed over negotiations of the Beau VallonProject to their consultants, one Philip Haller and one Kash Chandarana; and that he may contact them. That email D3 informed Mr. Pillai that he should contact Philip Haller and Kash Chandarana. He admitted that he never contacted the consultants. [24] Mr. Pillai was asked about one Mr. Sajee Ryan who, according to Mr Shah, had contacted the defendants on behalf ofMr. Sivasankaran in 2014. Mr. Pillai stated initially that he did not know whether Mr. Sajee Ryan had contacted the defendants on behalf of Mr. Sivasankaran; and that Mr. Sivasankaran had never told him that Mr. Sajee Ryan had contacted the defendants. However, later in the proceedings, he acknowledged the content of an email, dated 6 March, 2014, emanating from Mr. Sajee Ryan to the second defendant, I Proceedings of II July, 2017, at 9 a.m. at p. 35. copied to Mr. Sivasankaran and him, which informed the second defendant "Mr. Siva is Very seriously contemplating of taking legal action should you not reimburse 1 million pounds and do an out of court settlement ... the 2,15,000 pounds was transferred by him to you over a decade ago and with interest works to 1 million today" (D4). [25] In relation to the purported Assignment Agreement, the position of the defendants put to Mr. Pillai was that the plaintiff had never contacted them. Mr. Pillai agreed that the plaintiff, who had left Seychelles in 2014, had never contacted the defendants, but stated that he was not aware why he had not contacted them. [26] When re-examined, he stated that he was not aware about the relationship between Mr. Sajee Ryan and Mr. Sivasankaran. He reiterated that Mr. Sivasankaran never advanced the sum of 840,000.001- pounds sterling because a shareholders' agreement was never signed. The evidence for the defendants [27] The evidence 0.[Darius Oliaji. The second defendant is the son of the first defendant and the third and fourth defendants are his sisters. The first, second, third and fourth defendants are the shareholders of the fifth defendant. [28] He testified that Mr. Sivasankaran was required to pay the expenses involved in the process of obtaining Town and Country Planning Authority's approval. Mr. Sivasankaran had advanced 160,000.001- pounds sterling, which had been used to finance some preliminary expenses, including to pay consultants who had been engaged to do the work. [29] Spring Wonder Limited applied for Government Sanction to receive fifty percent of the shares of the fifth defendant. Exhibit P8, which referred to "Sub:Allotment 0.[10,000shares to Spring Wonder Limited", requested Spring Wonder Limited to transfer 840,000.00/ pounds sterling to the account of the fifth defendant before the shares of the fifth defendant could be trans ferred to it. Mr. Sivasankaran never transferred the money in terms of Government Sanction conditions. He stated that they would have transferred the shares had payment been made in terms of Government Sanction. As a result the project stopped. [30] He added that the defendants' request for more money came before Mr. Sivasankaran had asked them for a share holders' agreement. He testified that they did not prepare the draft shareholders' agreement. A draft shareholders' agreement was emailed to the defendants. They did not agree to various aspects of the draft shareholders' agreement and expressed their disagreement to it. A shareholders' agreement was never signed. [31] He testified that Mr. Sajee Ryan came to their office a few days or a few weeks before the email was sent (D4). Mr. Sajee Ryan informed them that he represented Mr. Sivasankaran; and that he has come to negotiate on behalf ofMr. Sivasankaran. They informed Mr. Sajee Ryan that they did not want to build the hotel anymore. [32] He stated that the plaintiff had never contacted them. He came to know of the assignment when he was served with court documents in relation to this suit. Mr. Sivasankaran did not tell him that he had assigned the Joint Venture Agreement to the plaintiff. [33] When cross-examined, with reference to clause 3 of exhibit P3, he agreed to the suggestion ofMr. Camille that the Joint Venture Agreement did not provide that "anything in regards to the preliminary expenses was to be over and above ... the one million that was agreed:". [34] He agreed that Mr. Sivasankaran had abide by the Joint Venture Agreement by paying 160,000.001- pounds sterling in relation to some preliminary matters, but he was adamant that he did not pay the full amount. [35] He denied the suggestion of Mr. Camille that they had disagreed with the content of the draft shareholders' agreement because they did not want to pursue with the project. He accepted that they had taken the first step to terminate the Joint Venture Agreement. [36] The second defendant stated that they would not transfer fifty percent of the shares of the fifth defendant to Mr. Sivasankaran because he has not paid for them. 2 Proceedings of II July, 2017, at 13:15 at p 17 of37. The submissions and analysis The purported assignment [37] As this court understands it the plaintiffs amended plaint pleaded an assignment of rights and obligations to the plaintiff. The WRITTEN SUBMISSION OF THE PLAINTIFF3 contended principally that the position of the defendants, in their SUBMISSION ON BEHALF OF THE DEFENDANTS', that the assignment is not valid and binding on them, under article 1690 of the Civil Code of Seychelles Act," is misconceived in law and unsustainable. [38] The Civil Code regulates (articles 1689 - 1701of the Civil Code) the assignment of claims and other incorporeal rights. In light of the position of the plaintiff and the defendants, the relevant provisions of the Civil Code are articles 1689 and 1690, which provide - "Article 1689 the In the assignment of a claim or a right or an action to a third party, delivery shall be effected between the assignor and the assignee by the handing over of the document of title. Article 1690 1. With regard to third parties, the assignment shall on ly be effective when notice of it is given to the debtor. Nevertheless, if the debtor accepts the assignment by a document the assignment may also be effective as regards the assignee in an authentic form. the provisions of paragraph I of this article, the rights Notwithstanding resulting on behalf of any party from any assignment or transfer of any life insurance or of insurance against fire or any other casualty shall duly vest in such party after such assignment or transfer shall have been registered at the Office of the Registrar General." [39] ENCYCLOPEDIE DALLOZ CESSION DE CREANCE (Recueil, VO Cession de creance) under "Generalites, 1-21, at notes 1, 2 and 12, states - 3 Hereinafter 4 Hereinafter 5 Hereinafter referred to as the "plaintiff's submissions". referred to as the "defendants' submissions". referred to as the "Civil Code". "1. La cession de creance, quelquefois cession-transport ou transport-cession, laquelle un creancier transmet volontairement a un tiers qui devient creancier a sa place ... appelee encore transport de creance ou est la convention par son droit contre Ie debiteur 2. La denomination «cession de creance» englobe non seulement la transmission des creances proprement dites, rnais encore celie des droits de droits personnels pourvu qu'il incorporels (AUBRY et Rau, t. 5, §359, p. 133 : BAUDRY-LACANTINERIE ET SAIGNAT, t. 19, nOS753 et 754 ; Beudant, 1. 11, n" 354 ; PLANIOL et RIPERT, t. 7, n° 1112; Civ. 24 fevr. 1931, D. H. 1931. 233). en general, s'agisse facile, en raison de I'imprecision ou de 12. II n'est pas toujours l'inexactitude des termes employes par les pal·ties, de savoir si I'acte passe entre elles est une cession de creance ou un autre contrat ou convention. Pour determiner Ie veritable caractere de la convention, aux clauses de I'acte plutot qu'a la denomination il faut s'attacher employee par les contractants ; Ie juge du fait constate souverainment l'existence des conventions, ainsi que les termes dans lesquels elles ont ete arretees, d'apres l'intention des contractants (Civ. 17 mai 1858, D. P. 58. 1. 212 : 21 mai 1879, S. 81. 1. 347; Req. 6 Janv. 1880, D. P. 80. 1. 361 ; 19 dec. 1923, D. P. ]925. 1. 9, note Capitant). Emphasis is mine [40] The question raised in this case is whether the ASSIGNMENT AGREEMENT is an assignment of rights to the plaintiff, under article 1689 of the Civil Code, or is another contract? The written submissions of both Counsel have acknowledged that Siva Limited Bermuda has assigned the totality of its rights and obligations set out in the Joint Venture Agreement to the plaintiff. According to note 12, this court has to examine the clauses of the ASSIGNMENT AGREEMENT, in accordance with the intention of the parties, to determine the veritable character of the agreement entered into by the parties. [41] Siva Limited Bermuda had assigned the Joint Venture Agreement to the plaintiff (clause 1). The Joint Venture Agreement sets out the plaintiff's and the defendants' rights and obligations in relation to the Joint Venture Agreement. In relation to the parties' obligations, clause 1 of the Joint Venture Agreement sets out "[t]he parties by this agreement wish to bind themselves to their main obligations stipulated below ... ". The obligations of the parties inter alia are - (a) "a more detailed agreement of terms and conditionsprovidingfor the organisation, management and good order of the company and project" (clause 1); (b) "whatever monies are required for preliminary matters and planning permission will be provided by Mr. Sivasankaran" (clause 3). It is undisputed that Mr. Sivasankaran had advanced 160,000.001- pounds sterling; (c) "[t]he completed project shall be managed by a reputable Hotel group", (which would require both patties to agree on the Hotel group ) (clause 7); (d) the first defendant was to contribute eleven parcels of land, which was valued at one million pounds sterling in 2006 (clause 3); (e) Mr. Sivasankaran was to pay one million pounds sterling, which would become due, once planning permission for a Hotel Project is approved (clause 3); (f) Mr. Sivasankaran "shall arrange (if the parties so decide)for a loan of up to 20 % of the project cost at 8.5 % interest ... " (clause 6). [42] Mr. Pillai testified that clause 8 of the Joint Venture Agreement was fulfilled, which kick started the Joint Venture Agreement. The project had obtained SIB's approval, subject to conditions. Some preliminary works had been done in relation to the project, which had reached Concept Design Stage. It is undisputed that Mr. Sivasankaran had advanced 160,000.001- pounds sterling towards the project. Spring Wonder Limited had obtained Government Sanction to acquire fifty percent of the shares of the fifth defendant. The second defendant claimed that the first, second, third and fourth defendants never transferred any shares to Spring Wonder Limited because Mr. Sivasankaran had not paid 840,000.001- pounds sterling in accordance with Government Sanction conditions. Mr. Pillai claimed that Mr. Sivasankaran would have advanced the sum of 840,000.001- pounds sterling upon signature of a shareholders' agreement by the parties. [43] A careful reading of Article 1689 of the Civil Code shows that it permits inter alia the "assignment of a right". It is pertinent to note that paragraph 10 of the plaintiff's plaint expressly pleaded "that in pursuance to ..... the "Assignment Agreement", all rights, powers and obligations under the Agreement between Siva Limited Bermuda ... and the Defendants, were duly assigned onto Plaintiff and accepted by Plaintiff as per the terms and conditions stated in the same Assignment Agreement". [Emphasis is mine). Clause 4 of the ASSIGNMENT AGREEMENT stipulated "[i]n view of the said Assignment; the Assignee herein shall accrue all rights and control over all the investments, advances and services rendered by the Mis Siva Limited Bermuda assigned to the Assignee herein". It is also pertinent to note that in accordance with clause 5 of the ASSIGNMENT AGREEMENT "[Siva Limited Bermuda} shall absolve itselffrom all responsibilities, obligations under the Joint VentureAgreement. Any amount due and payable by the said company including but not limited to the advances GBP 160, 000 made by the Assignor shall henceforth payable to the account of the Assignee". Pursuant to clause 6 of the ASSIGNMENT AGREEMENT, the plaintiff "shall decide upon allfurther course of actions under the said Joint VentureAgreement ... ". [44] Having a due regard to the clauses of the ASSIGNMENT AGREEMENT, pursuant to the intention of Siva Limited Bermuda and the plaintiff; the subject matter of and the rights and obligations of the parties under, the Joint Venture Agreement; and the brief facts of this case, this court is satisfied that the said parties did not intend to enter into an assignment agreement under article 1689 of the Civil Code. The evidence establishes on a balance of probabilities that the ASSIGNMENT AGREEMENT consisted in transferring to the plaintiff, a third party to the Joint Venture Agreement, the "qualite de contractant'"'. with the totality of the rights and obligations of SIVA Limited Bermuda, set out in the Joint Venture Agreement. [45] This court is satisfied, therefore, that Siva Limited Bermuda did not assign rights to the plaintiff, a third party to the Joint Venture Agreement, under article 1689 of the Civil Code; and that, in consequence therefore, the plaintiff does not have a right of action against the 6 ENCYCLOPEDIE DALLOZ CESSION DE CONTRA T (Recueil, yO Contrats et obligations) Generalites A. - Definition et evolution at note 1. first, second, third and fourth defendants for specific performance of the Joint Venture Agreement for the transfer by them jointly and severally of fifty percent of the shares held by them in the fifth defendant, to the plaintiff. [46] Having come to the above conclusion, this couli shall not consider the other issues canvassed by both Counsel, in their respective written submissions, in relation to Article 1690 of the Civil Code. "La cession de contrat" [47] In light of the above, the difficult question raised in this case is whether "la cession de contrat" is possible. The defendants' submissions alluded briefly to this proposition. Because this case is an appealable one, this court considers the following - (a) whether the purported ASSIGNMENT AGREEMENT is effective as regards the defendants ("condition deforme '')? (b) Arguing in the alternative, whether the Joint Venture Agreement is susceptible to be assigned (condition defond)? [48] It is pertinent to note that, although the Civil Code does not regulate the institution of fa cession de contrat, it provides sporadically for certain "cession de contrats". For instance article 1717 of the Civil Code allows a tenant to assign his lease to another and article 1743, the legal assignment of the lease in case of the sale of the property leased. [49] ENCYCLOPEDIE DALLOZ CESSION DE CONTRAT (Recueil, VO Contrats et obligations) Generalises A. - Definition et evolution, at note 1, defines la cession de contrat - "1, Selon la definition la plus moderns, «la cession de contrat a pour object Ie rem placement d'une partie par un tiers au cours de l'execution du contrat» (MALAURlE et AYNES, Droit civil. Les obligations, n? 809). it un tiers la qualite de contractant avec Elle consiste done it transferer l'ensemble des droits et obligations qui y sont attaches ... " "Condition de forme" - whether the purported ASSIGNMENT AGREEMENT is effective as regards the defendants? [50] It is to be noted that the definition, set out above, does not remove the important obstacle constituted by the presence of the "cocontractant" and the principle of the relative effect of contracts. Article 1690 of the Civil Code provides for certain procedures. [51] This court cannot do better than to quote from ENCYCLOPEDIE DALLOZ CIVIL CESSION DE CONTRAT SECT. Ire. - Conditions de la cession de contrat. Art. 2 - "CONDITION DE FORME", at notes 35 and 36 - "§ 2. - Cessions conventionnelles les rapports qui constituent de forme. Si, dans la cession de contrat n'est 35. Ce sont les cessions conventionnelles conditions cessionnaire) particuliere, etre portee communication 1690 du code civil it propos de la cession de creance? Ie domaine des (cedant soumise it aucune formalite il en est differemrnent du cede it la connaisance duquel doit simple la cession. Suffit-il pour cette information les formalites prevues par l'article entre les parties ou faut-il respecter d'une a toujours declare que I'articlee 1690 du code civil 36. La jurisprudence constitue aussi aux Ie systeme de droit commun qui doit s'appliquer cessions de contrat. Les applications de cette formule sont innombrables, qu'il agisse de la cession de bail (Req. 4 mai 1925, D. H. 1925.345 : Soc. 20 nov. 1958. Bull. civ ... II faut done soit une signification au cede par acte d'huissier, soit une acceptation par Ie cede dans un acte authentique. La simple connaissance de la cession par Ie cede est, en regie generale, insuffisante pour remplacer les formalites de l'article 1690 et lui rendre la cession opposable (Ass. Plen, 14 fevr. 1975.349; V. Cession de creance), [52] This court also reads from Droit Civil Les Obligations Francois Terre Phillippe Simler Yves Laquette "loe edition" Dalloz SECTION 2 CESSION DE CONTRAT 1310 nature juridique : addition d'une cession de creance et d'une cession de dette ou concept original?" - la cession de la qualite de contractant, des lors que des obligations y " ... sont attachees, ne peut etre oppose au cocontractant du cedant s'il n'a pas donne son accord it I'operation." This note goes on to say that if we are in the presence of a "cession de contrat purement conventionelle, la signification que prevo it I 'article 1690 est de toute maniere insuffisante, une veritable cession exigeant une acceptation par le cocontractant. Si cette acceptation est acquise, la signification parait superjlue". [53] Both Counsel have dealt extensively with the "conditions de forme" in relation to an assignment of a right under article 1689. Mr. Shah has contended that the defendants' consent is required for the purported ASSIGNMENT AGREEMENT to be effective as regards them. In light of the evidence, the question raised by the submissions as to whether or not notice of the purpOliedASSIGNMENT AGREEMENT is sufficient does not arise for the consideration of this court. Mr. Pillai admitted that the plaintiff did not notify the defendants of the assignment of the Joint Venture Agreement". In fact the second defendant stated that they came to know of the purported ASSIGNMENT AGREEMENT when they were served with court documents in relation to this suit. [54] In consequence therefore, if this comi were to conclude that the ASSIGNMENT AGREEMENT is "une cession de contrat", this court would, nevertheless, have concluded that the plaintiff could not, in any case, oppose the ASSIGNMENT AGREEMENT to the defendants, third parties to it. The effects of the ASSIGNMENT AGREEMENT are regulated by article 1165 of the Civil Code. The plaintiff, in this court's opinion, would not have had a right of action against the defendants. "Condition de fond" - Arguing in the alternative, whether the Joint Venture Agreement is susceptible to be assigned? [55] This question involves a consideration of whether the Joint Venture Agreement could be the object of an assignment. Where the "conditions defond" of "la cession de contrat" are concerned a distinction is made between "les cession legales et les cessions conventionnelles". In relation to the "cessions conventionnelles" ENCYCLOPEDIE DALLOZ CIVIL CESSION DE CONTRAT SECT I". - Conditions de la cession de contrat. Art. I", - CONDITIONS DE FOND. § 2. - Cessions conventionelles at notes 19,20 and 21, states- "19. Les conditions de fond des cession conventionnelles les lines sont relatives all contrat transmis, ordres: volontes. sont de deux les autres it I'accord de A. - Conditions relatives au contrat. 7 Each of the defendants should have been notified: Rouen, 15 Juin 1847, D. 49 2.25, S. 49.2.241. Pour pourvoir faire I'objet d'une cession, un contrat doit repondre 20. a une double caracteristique 21. a) Seuls les contrats successifs, c'est a dire ceux dont principale d'etre la duree, dans MALAURIE et AYNES, susceptible s'inscrit sont loc. Cit. ; AYNES, op. cit., nOS262 et s.)". : etre un contrat successif et etre cessible. I'obligation (V. cedes [56] ENCYCLOPEDIE DALLOZ CIVIL III CO - DIS CONTRATS ET CONVENTIONS chap. preliminaire, 1-76 SECT. 2 - Classification des contrats, 30-76, ART. 4. - CLASSIFICATION SELON LEUR MODE D 'EXECUTION.' "CONTRATS INSTANTANES ETCONTRATS SUCCESSIFS, at note 66, states- se manifeste "66. Cette distinction n'est pas formulee par Ie code civil. Son interet essentiel au cas de nullite ou de resolution du contrat. Normalement, celles-ci doivent aboutir a une remise des choses dans l'etat anterieur a I'accord ayant eu lieu. Or s'agissant d'un contrat successif, tel que Ie louage ou Ie contrat de travail, cette restitution in integrum est impossible car on ne peut faire disparaitre la jouissance qui a ete celie du II faut bailleur ou la prestation de travail dont donc maintenir au moins dans une certaine mesure, la prestation recue par I'autre nul, on Ie fait en parlant est declare generalernent d'Indemnite. S'il est attaque sur la base de I'article 1184 du code civil, on substitute a la notion de resolution retrocative, celie de resiliation n'operant que dans I'avenir a beneficie. I'employeur partie. Si Ie contrat ... ". [57] In light of the distinction at note 66 above, this court thinks that the Joint Venture Agreement is not a "contrat successif". For instance the various obligations set out in the Joint Venture Agreement are not susceptible of "resiliation". This court ought to find therefore, that the Joint Venture Agreement is not susceptible to be assigned. In light of this finding, this court shall not consider the question raised as to whether the purported ASSIGNMENT AGREEMENT is "cessible" or not. Article 109 (3) a/the Commercial Code [58] The defendants' submissions state that article 109 (3) of the Commercial Code applies in this case. This court cannot make a finding in relation to this issue because the defendants defence has not pleaded the material facts. The decision [59] In light of the above, this court is satisfied that the plaintiffhas not proven his claim against the defendants on a balance of probabilities and dismisses his case with costs. and delivered at Ile du Port on 19 September 2018 F Robinsor Sitting as Judge of the Supreme Court 21