FEDERAL COURT OF AUSTRALIA
Beluga Shipping GmbH v Suzlon Energy Ltd (No 2)
[2009] FCA 1346
BELUGA SHIPPING GMBH & CO. KS "BELUGA FANTASTIC" v SUZLON ENERGY LTD and OTHERS
NSD 1670 of 2008
RARES J
30 OCTOBER 2009
SYDNEY
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IN THE FEDERAL COURT OF AUSTRALIA |
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In admiralty |
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NEW SOUTH WALES DISTRICT REGISTRY |
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general division |
NSD 1670 of 2008 |
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BELUGA SHIPPING GMBH & CO. KS "BELUGA FANTASTIC" Plaintiff
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AND: |
SUZLON ENGERGY LTD First Second Cross-Claimant
SUZLON ENERGY AUSTRALIA PTY LTD Second Second Cross-Claimant
SUZLON INFRASTRUCTURE LIMITED Third Second Cross-Claimant
SUZLON WIND ENERGY CORPORATION, USA Fourth Second Cross-Claimant
SUZLON STRUCTURES PTE LTD Fifth Second Cross-Claimant
SE SHIPPING PTE LIMITED Sixth Second Cross-Claimant
SANJEEV BANGAD Third Cross-Defendant
SS OCEANWIND PTE LIMITED Fifth Second Cross-Defendant
GENUS SHIPPING SERVICES PVT LIMITED Sixth Second Cross-Defendant
RAJAGOPALAN SRIDHAR Seventh Second Cross-Defendant
BLUEWIND ENTERPRISES (UK) LTD Eighth Second Cross-Defendant
SUNSHINE TRADE SERVICES LIMITED Ninth Second Cross-Defendant
S RAAM KUMAR Tenth Second Cross-Defendant
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JUDGE: |
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DATE OF ORDER: |
30 OCTOBER 2009 |
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WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
PENAL NOTICE
TO: RAJAGOPALAN SRIDHAR
IF YOU:
(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
TO: RAJAGOPALAN SRIDHAR
This is a ‘freezing order’ made against you on 30 October 2009 by Justice Rares at a hearing without notice to you after the Court was given the undertakings set out in Schedule A to this order and after the Court read the affidavits listed in Schedule B to this order.
THE COURT ORDERS:
INTRODUCTION
1. (a) The notice of motion for this order is made returnable immediately.
(b) The time for service of the notice of motion, supporting affidavits and notice of motion is abridged and service is to be effected by 6 November 2009.
2. Subject to the next paragraph, this order has effect up to and including 20 November 2009 (‘the Return Date’). On the Return Date at 9.30 am there will be a further hearing in respect of this order before Justice Rares.
3. Anyone served with or notified of this order, including you, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified.
4. In this order:
(a) the 'Suzlon Parties', means all of the first to sixth second cross claimaints;
(b) you’, where there is more than one of you, includes all of you and includes you if you are a corporation;
(c) ‘third party’ means a person other than you and the Suzlon Parties;
(d) ‘unencumbered value’ means value free of mortgages, charges, liens or other encumbrances.
5. (a) If you are ordered to do something, you must do it by yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions.
(b) If you are ordered not to do something, you must not do it yourself or through directors, officers, partners, employees, agents or others acting on your behalf or on your instructions or with your encouragement or in any other way.
FREEZING OF ASSETS
6. (a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets in Australia (‘Australian assets’) up to the unencumbered value of AUD$26,000,000.00 (‘the Relevant Amount’).
(b) If the unencumbered value of your Australian assets exceeds the Relevant Amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the Relevant Amount.
(c) If the unencumbered value of your Australian assets is less than the Relevant Amount, and you have assets outside Australia (‘ex-Australian assets’):
(i) You must not dispose of, deal with or diminish the value of any of your Australian assets and ex-Australian assets up to the unencumbered value of your Australian and ex-Australian assets of the Relevant Amount; and
(ii) You may dispose of, deal with or diminish the value of any of your ex-Australian assets, so long as the unencumbered value of your Australian assets and ex-Australian assets still exceeds the Relevant Amount.
7. For the purposes of this order,
(1) your assets include:
(a) all your assets, whether or not they are in your name and whether they are solely or co-owned;
(b) any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions).
(2) the value of your assets is the value of the interest you have individually in your assets.
PROVISION OF INFORMATION
8. Subject to paragraph 9, you must:
(a) at or before the further hearing on the Return Date (or within such further time as the Court may allow) to the best of your ability inform the Suzlon Parties in writing of all your assets world wide, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of your interest in the assets;
(b) within 10 working days after being served with this order, swear and serve on the Suzlon Parties an affidavit setting out the above information.
9. (a) This paragraph (9) applies if you are not a corporation and you wish to object that compliance with paragraph 8 may tend to incriminate you or make you liable to a civil penalty;
(b) This paragraph (9) also applies if you are a corporation and all of the persons who are able to comply with paragraph 8 on your behalf and with whom you have been able to communicate, wish to object that compliance may tend to incriminate them respectively or make them respectively liable to a civil penalty;
(c) You must, at or before the further hearing on the return date (or within such further time as the Court may allow), notify the Suzlon Parties in writing that you or all the persons referred to in (b) wish to take such objection and identify the extent of the objection;
(d) If you give such notice, you need comply with paragraph 8 only to the extent, if any, that it is possible to do so without disclosure of the material in respect of which the objection is taken; and
(e) If you give such notice, the Court may give directions as to the filing and service of affidavits setting out such matters as you or the persons referred to in (b) wish to place before the Court in support of the objection.
EXCEPTIONS TO THIS ORDER
10. This order does not prohibit you from:
(a) paying up to AUD $1,000.00 or its foreign currency equivalent a week on your ordinary living expenses;
(b) paying your reasonable legal expenses;
(c) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and
(d) in relation to matters not falling within (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the Suzlon Parties, if possible, at least two working days written notice of the particulars of the obligation.
11. You and the Suzlon Parties may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case the Suzlon Parties or you must as soon as practicable file with the Court and serve on the other a minute of a proposed consent order recording the variation signed by or on behalf of the Suzlon Parties and you, and the Court may order that the exceptions are varied accordingly.
12. (a) This order will cease to have effect if you:
(i) pay the sum ofAUD$26,000,000.00 into Court; or
(ii) pay that sum into a joint bank account in the name of your solicitor and the solicitor for the Suzlon Parties as agreed in writing between them; or
(iii) provide security in that sum by a method agreed in writing with the Suzlon Parties to be held subject to the order of the Court.
(b) Any such payment and any such security will not provide the Suzlon Parties with any priority over your other creditors in the event of your insolvency.
(c) If this order ceases to have effect pursuant (a), you must as soon as practicable file with the Court and serve on the Suzlon Parties notice of that fact.
COSTS
13. The costs of this application are reserved to the judge hearing the application on the Return Date.
PERSONS OTHER THAN THE SUZLON PARTIES AND RESPONDENT
14. Set off by banks
This order does not prevent any bank from exercising any right of set off it has in respect of any facility which it gave you before it was notified of this order.
15. Bank withdrawals by the respondent
No bank need inquire as to the application or proposed application of any money withdrawn by you if the withdrawal appears to be permitted by this order.
16. Persons outside Australia
(a) Except as provided in subparagraph (b) below, the terms of this order do not affect or concern anyone outside Australia.
(b) The terms of this order will affect the following persons outside Australia:
(i) you and your directors, officers, employees and agents (except banks and financial institutions);
(ii) any person (including a bank or financial institution) who:
(a) is subject to the jurisdiction of this Court; and
(b) has been given written notice of this order, or has actual knowledge of the substance of the order and of its requirements; and
(c) is able to prevent or impede acts or omissions outside Australia which constitute or assist in a disobedience of the terms of this order; and
(iii) any other person (including a bank of financial institution), only to the extent that this order is declared enforceable by or is enforced by a court in a country or state that has jurisdiction over that person or over any of that person’s assets.
17. Assets located outside Australia
Nothing in this order shall, in respect of assets located outside Australia, prevent any third party from complying or acting in conformity with what it reasonably believes to be its bona fide and properly incurred legal obligations, whether contractual or pursuant to a court order or otherwise, under the law of the country or state in which those assets are situated or under the proper law of any contract between a third party and you, provided that in the case of any future order of a court of that country or state made on your or the third party’s application, reasonable written notice of the making of the application is given to the Suzlon Parties.
SCHEDULE A
UNDERTAKINGS GIVEN TO THE COURT BY THE SUZLON PARTIES
(1) The Suzlon Parties undertake to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as it may direct) to any person (whether or not a party) affected by the operation of the order.
(2) As soon as practicable, the Suzlon Parties will file and serve upon the respondent copies of:
(a) this order;
(b) the application for this order for hearing on the return date;
(c) the following material in so far as it was relied on by the Suzlon Parties at the hearing when the order was made:
(i) affidavits (or draft affidavits);
(ii) exhibits capable of being copied;
(iii) any written submission; and
(iv) any other document that was provided to the Court.
(d) a transcript, or, if none is available, a note, of any exclusively oral allegation of fact that was made and of any exclusively oral submission that was put, to the Court;
(e) the originating process, or, if none was filed, any draft originating process produced to the Court.
(3) As soon as practicable, the Suzlon Parties will cause anyone notified of this order to be given a copy of it.
(4) The Suzlon Parties will pay the reasonable costs of anyone other than the respondent which have been incurred as a result of this order, including the costs of finding out whether that person holds any of the respondent’s assets.
(5) If this order ceases to have effect the Suzlon Parties will promptly take all reasonable steps to inform in writing anyone to who has been notified of this order, or who he has reasonable grounds for supposing may act upon this order, that it has ceased to have effect.
(6) The Suzlon Parties will not, without leave of the Court, use any information obtained as a result of this order for the purpose of any civil or criminal proceedings, either in or outside Australia, other than this proceeding.
(7) The Suzlon Parties will not, without leave of the Court, seek to enforce this order in any country outside Australia or seek in any country outside Australia an order of a similar nature or an order conferring a charge or other security against the respondent or the respondent’s assets.
THE COURT ORDERS THAT:
1. Leave be granted to the Suzlon Parties to file in the court a copy of the affidavit of Prafull Wankhade affirmed 28 October 2009
2. Leave be granted to the Suzlon Parties to issue a subpoena in the form initialled by Rares J dated today.
3. The proceedings stand over to 20 November 2009 at 9:30am.
4. Leave be granted to any party to apply on two days notice.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
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IN THE FEDERAL COURT OF AUSTRALIA |
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in admiralty |
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NEW SOUTH WALES DISTRICT REGISTRY |
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general division |
NSD 1670 of 2008 |
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BETWEEN: |
BELUGA SHIPPING GMBH & CO. KS "BELUGA FANTASTIC" Plaintiff
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AND: |
SUZLON ENGERGY LTD First Second Cross-Claimant
SUZLON ENERGY AUSTRALIA PTY LTD Second Second Cross-Claimant
SUZLON INFRASTRUCTURE LIMITED Third Second Cross-Claimant
SUZLON WIND ENERGY CORPORATION, USA Fourth Second Cross-Claimant
SUZLON STRUCTURES PTE LTD Fifth Second Cross-Claimant
SE SHIPPING PTE LIMITED Sixth Second Cross-Claimant
SANJEEV BANGAD Third Cross-Defendant
SS OCEANWIND PTE LIMITED Fifth Second Cross-Defendant
GENUS SHIPPING SERVICES PVT LIMITED Sixth Second Cross-Defendant
RAJAGOPALAN SRIDHAR Seventh Second Cross-Defendant
BLUEWIND ENTERPRISES (UK) LTD Eighth Second Cross-Defendant
SUNSHINE TRADE SERVICES LIMITED Ninth Second Cross-Defendant
S RAAM KUMAR Tenth Second Cross-Defendant
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JUDGE: |
RARES J |
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DATE: |
30 OCTOBER 2009 |
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PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)
1 When these proceedings came before me on 31 July 2009 I indicated that I was prepared to make a Mareva or freezing order against Mr Sridhar. I settled the form of those orders in chambers and made them on 13 August 2009, giving reasons for making them on 18 September 2009: Beluga Shipping GmbH v Suzlon Energy Limited [2009] FCA 1020. When the matter came before me on the latter date, the solicitor for the Suzlon parties overlooked seeking an extension of the freezing orders and accordingly they expired later that day. Mr Sridhar was served with the orders and documents commencing these proceedings against him later that day in India.
2 The oversight was unfortunate and unintended. I am satisfied on the material presently before me that no prejudice has been suffered by Mr Sridhar through it having occurred. The matter came before me on 23 October 2009, when the oversight was realised by the legal representatives of the Suzlon parties. Pursuant to leave I gave, they filed a motion returnable today to seek further freezing orders against Mr Sridhar. I directed that those draft orders be prepared so as to comply with Practice Note CM 9 issued by the Chief Justice on 25 September 2009. Having regard to the material on which I relied for the purposes of making my orders of 13 August 2009, I am satisfied that it is appropriate to make orders in terms of the form of freezing orders that I will shortly pronounce upon the undertakings offered by the Suzlon parties.
3 The Suzlon parties have disclosed that since 18 September 2009, Mr Sridhar has been and remained in what is described as magisterial custody, that is, custody pursuant to an order of a magistrate in Pune, in the State of Maharashtra, in India. He is apparently permitted contact with family and legal advisers twice a week and additional contact when he has permission from the gaol authorities. On the material before me, identified in the schedule to the freezing order, I am satisfied that for the reasons I gave in Beluga [2009] FCA 1020, that I should make a further set of freezing orders, subject to the conditions in Practice Note CM 9, and adapted as I have considered appropriate.
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I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. |
Associate:
Dated: 18 November 2009
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Counsel for the First, Second, Third, Fourth, Fifth and Sixth Second Cross Claimants |
AW Street SC and J Hogan-Doran |
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Solicitor for the First, Second, Third, Fourth, Fifth and Sixth Second Cross Claimants |
HWL Ebsworth |
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Date of Hearing: |
30 October 2009 |
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Date of Judgment: |
30 October 2009 |
