IN THE SUPREME COURT OF INDIA

(Civil Appellate Jurisdiction)

Civil Appeal No. 8276 of 2018

Ms. Lampros International Investments Ltd …Appellant

versus

Ms. Sanderson Partners Pvt Ltd …Respondent

Civil Appeal No. 8277 of 2018

Ms. Lampros International Investments Ltd …Appellant

versus

Ms. Sanderson Partners Pvt Ltd …Respondent

Written submissions on behalf of the Respondent/Appellant,

B54

Counsel for the Respondent/Appellant.

1
 STATEMENT OF FACTS

THE PARTIES INVOLVED

Sanderson Partners Pvt Ltd. [Sanderson], is a private company and has established itself as
one of India’s leading manufacturers and exporters of precious metals and gold jewellery.
Founded in 1969, it has offices in New Delhi, Mumbai, and London. The company foundered
in the late 2000’s, especially after the death of its CEO and Founder in 2008, who they could
they not replace with a person of equal competency. Post the 2008 financial crisis the
company was on the verge of insolvency in 2009 but still remained an attractive proposition
for global players due to its well-known brand-name in India.

Lampros International Investments Ltd. [Lampros], a British Virgin Islands company, is a

company dealing in the purchase and sale of gold. It is controlled by a Frugalian Billionaire
Jeweller, one of the world’s largest importers of gold, who uses Lampros as a vehicle for
trading in gold and manufacturing gold jewellery. Lampros and Sanderson have been in a
pre-existing relationship since the early 1990s. The company has been a long standing
customer of Sanders and has complete faith in the quality of the product purchased from
Sanderson, however it has been sceptical of the new Board and Management of Sanderson.

THE CHANGE IN MANAGEMENT OF SANDERSON

After the death of Sanderson’s CEO, the company failed to replace him with someone of
comparable ability and standing. The company seemed ideal for a global investor, it could be
easily revived by someone with deep pockets due to its well-known name in India. It was
eventually taken over by a consortium led by Mr. Joseph Securicor. He had established a
chain of thriving auction houses across London, New York, and Frugalia. Mr. Securicor
replaced several long-standing staff with new, inexperienced, but loyal, staff members. By all
accounts, Sanderson was a ‘tightly-run ship’ at Mr. Securicor’s behest.

2
 ARGUMENTS ADVANCED

[1] Tort of deceit is located out of the BSA contract:

Lampros’ proceedings against Sanderson were founded solely on the tort of deceit, i.e. ex
delicto and not a breach of contract, i.e. ex contractu. It is important to establish that in the
case Henderson v Merrett Syndicates Ltd,1 the possibility of concurrent liability in tort and
contract has been theorised. Tort law being the general law and not merely a supplement to
any contract, can also be exclusively considered and possibly impose a wider duty than a
contract.2 A UK Court of Appeals case3 held “It is a matter of interpretation whether the
jurisdiction clause, if there is one, will also cover the dispute in tort.”

The widely accepted principle that tortuous and contractual liability are not subsidiary to each
other and independent was theorised in Hedley Byrne & Co Ltd v Heller & Partners Ltd,
wherein tortuous liability was instituted even in the absence of contractual liability.
In Wemyss v Karim4, a similar sale dispute, the Court of Appeal has laid down guidance with
respect to the differences between the contractual and tortuous measures of damages and the
availability of choice to claimants. Torts are enforced by law in general and hence any
wrongs committed would hold the tortfeasor liable even in absence of an existing contract
The companies were in a pre-existing contractual relationship by virtue of having traded in
gold and gold jewellery with each other before. This relationship means that both companies
owed a “reasonable duty of care to the other”. This duty was clearly breached when
Sanderson made fraudulent misrepresentations to Lampros about the details of the gold they
would sell.

In a Court of Appeal case5 confirmed that there is no separate, standalone requirement to

prove an intention to deceive in order for a defendant to be liable under the tort of deceit.
Furthermore, the requirements of tort of deceit laid down in Pasley v. Freeman are in no way
dependent on a contract’s existence to give rise to a suit and a liability.

1
[1994] UKHL 5
2
Richard Glofcheski, 'Tort/Contract Concurrency: The Demise of Tai Hing Cotton Mill Ltd' (1996)
26 HKLJ 34, 44
3
Peterson v. AB Bahco Ventilation (1979) 107 DLR (3d) 49 (BCSC) 131
4
[2016] EWCA Civ 27
5
Eco 3 Capital Ltd v Ludsin Overseas Ltd

3
In the Kochert Case6, the court held that a fraudulent misrepresentation in the inducement of
a contract is not “necessarily” incorporated into the contract. In Knieriemen v. Bache Halsey
Stuart Shields7, the court held that the choice-of-law clause does not encompass claims for
negligence, fraud and punitive damages and separate tortuous claim is actionable.

[2] Indian Law should goven the tort of deceit claim:

“Whether an act done in a foreign country is or is not a tort depends upon the combined
effect of the lex loci delicti commissi (law of the country where the act is committed) and lex
fori (law of the country where the action is brought)”8

This rule will lead to the application of Indian laws. Since, the tort was committed in India
(proved below) and the action is brought in the Indian jurisdiction.

It was held in a UK Court of Appeals case, 9 that the question in court is not where the
damage was suffered, even though damages maybe the gist of the action but where the
wrongful act was committed from which the damage flowed. ‘The connecting factor’,
namely, suffering of damages was given less relevance than the commission of wrongful act.

The wrongful act in tort of deceit is the “recklessly or knowingly made false statement by A to
B with intent that it shall be acted upon by B, who thereby suffers damages.” which has been
well established in Indian judgment 10 following the authority of Pasley v. Freeman into
Indian tort law. Sanderson committed this wrongful act on 28th October, 2012 by making
false representations in Mumbai, India.11 Hence, the lex loci delicti commissi is the Indian
Law.

The application of Double Actionability doctrine 12 entails two burdens on the claimant,
namely:

(a) The tort must be actionable under the lex fori,

(b) The tort must be actionable under the lex loci delicti commissi.

Since Indian Law is both the Lex loci and lex loci delicti commissi, the application of the
Doctrine doesn’t hold good. Alternately, assuming the Frugalian Law is regarded as the lex
6
Carolyn G. Kochert v. Adagen Medical International Inc. & North American Medical Corp.
7
KNIERIEMEN v. BACHE HALSEY, 427 N.Y.S.2d 10
8
Dicey’s Conflict of Laws: Rule 180
9
George Monro, Ltd. v. American Cuanamid and Chemical Corporation
10
Kh. Saifuddin & anrs. V State of Jammu & Kashmir
11
Factsheet, Paragraph 7, Page 3
12
Phillips v Eyre (1870) LR 6 QB 1

4
loci delicti commissi, the changes to the doctrine by a House of Lords 13 and a Privy Council
case14, allow for the higher relevance and closer connection of lex loci limb, which again is
the Indian Law.

Furthermore, the case facts have the ‘closest connection’ to the Indian Law, making it the
ideal governing law for deceit claim. 15 The US courts when adopting “policy oriented”
choice-of-law solution, as in the case Babcock v. Jackson16, the “center of gravity” test also
strengthens the application of the Indian Law over the Frugalian Law.

Alternately, assuming the application of Frugalian Law is correct, it will hold the PIL Act17 in
high regard, the Section 11(2) of which reads, “Applicable law is the law of the country in
which the most significant element or elements of those events occurred”, thereafter
supporting the application of Indian Law.

13
Boys v Chaplin [1971] AC 356
14
Red Sea Insurance Co Ltd v Bouygues SA[1995] 1 AC 190
15
Boissevain v Weil
16
Babcock v. Jackson, 12 N.Y. 2d 473, 240 N.Y.S. 2d 765, 191 N.E. 2d 279 (1963).
17
Private International Law (Miscellaneous Provisions) Act, 1995