Adama New Zealand Ltd v Raam Chem Pte Ltd

JurisdictionNew Zealand
JudgeJohnston
Judgment Date29 May 2020
Neutral Citation[2020] NZHC 1163
CourtHigh Court
Docket NumberCIV-2018-485-961
Date29 May 2020
Between
Adama New Zealand Limited
Plaintiff
and
Raam Chem Pte Limited
Defendant

and

Falcon International Biosciences Private Limited
First third party
Aristo Bio-Tech and Lifescience Private Limited
Second third party
Jay Laxmi Industries
Third party
Orchid Agro Systems
Fourth third party
UPL Limited
Fifth third party

[2020] NZHC 1163

JUDGE Johnston

CIV-2018-485-961

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE WHANGANUI-A-TARA ROHE

International Law — application by the defendant for an order setting aside an appearance under protest to jurisdiction by the fifth third party — plaintiff alleged a breach of contract against the defendant for selling a contaminated fungicide — whether the defendant's claim against the fifth third party should be litigated in New Zealand or India — conflict of laws — forum conveniens — the plaintiff was a New Zealand company — the product was sold in NZ where the damage occurred — Indian companies were involved in the chain of manufacture and sale of the product — Court's discretion whether to assume jurisdiction — whether the claim had a real and substantial connection with New Zealand — High Court Rules 2016 — India's Code of Civil Procedure 1908

Appearances:

W A Holden and N Cannon for defendant

A W Johnson for fifth third party

Z Caughey in attendance in an observational capacity for plaintiff

No appearances for first, second, third or fourth third parties

JUDGMENT OF ASSOCIATE JUDGE Johnston
Introduction
1

The defendant, Raam Chem Pte Ltd (“Raam”), applies for an order setting aside an appearance under protest to jurisdiction by the fifth third party, UPL Ltd (“UPL”).

2

The question to be determined is whether Raam's claim against UPL should be litigated in New Zealand or India. There is much to be said for both jurisdictions. In the end, the issue comes down to an assessment of whether New Zealand is the appropriate forum (forum conveniens).

Background
3

The plaintiff, Adama New Zealand Ltd (“Adama”), is a New Zealand company. Raam is a Singaporean company. In late 2016 Adama and Raam entered into a contract pursuant to which Adama ordered 50,000 kg of Mancozeb, a fungicide used by horticulturalists to protect against a range of diseases in crops, and commonly used by apple growers.

4

In early 2017 the Mancozeb was delivered to Adama in New Zealand in four consignments.

5

During the course of 2017 Adama sold a substantial quantity of the Mancozeb to Horticentre Ltd (Horticentre), another New Zealand company. Horticentre sold the product to various apple growers, who applied it in their orchards.

6

In its claim, Adama alleges that the Mancozeb was contaminated with a chemical known as Azoxytrobin with the result that it damaged the trees.

7

The apple growers claimed compensation from Horticentre. Horicentre in turn looked to Adama.

8

Adama took responsibility for settling the claims and paid out compensation totalling more than $13 m.

9

In late 2018 Adama commenced this proceeding against Raam alleging breach of contract and related causes of action. Raam is defending the claim.

10

It turns out, that, quite possibly unbeknown to Adama, behind Raam there was a prodigiously long manufacturing and supply chain.

11

Raam, which, it will be recalled, is a Singaporean company, ordered the Mancozeb from an Indian company known as Falcon International Biosciences Pte Ltd (“Falcon”). Falcon in turn ordered it from another Indian company known as Aristo Bio-Tec and Lifescience Pte Ltd (“Aristo”). Aristo engaged another Indian concern, Jay Laxmi Industries (“Laxmi”) to manufacture the Mancozeb by blending the necessary ingredients. Aristo supplied the primary chemical component, Mancozeb TC 85%, to Laxmi from its own stock and from additional stock acquired from two other Indian concerns, Orchid Agro Systems (“Orchid”) and UPL. As if this were not complicated enough, it would seem that all or a proportion of the Mancozeb TC 85% that Aristo acquired from Orchid had originally been acquired by Orchid from UPL.

12

One of the deponents who has sworn an affidavit in opposition to Raam's application is Mr Amitesh Mishra who is a principal of UPL's New Delhi solicitors. Mr Mishra exhibits to his affidavit an opinion from Justice V N Khare who is a former Chief Justice of India (one of two former Chief Justices whose opinions on aspects of this matter are in evidence, or, rather, are exhibited to affidavits sworn by others). Justice Khare's opinion includes a diagram of the manufacturing and supply chain involved which is reproduced below:

13

In early 2019 Raam commenced third party proceedings citing Falcon, Aristo, Laxmi, Orchid and UPL as first to fifth third parties.

14

Understandably, given the relatively straight forward nature of its claim against Raam, and that the resolution of this claim would unquestionably be delayed by Raam's third party claims, Adama applied for an order striking out or severing those claims.

15

I heard that application on 14 October 2019. Having explored various options with counsel, in the end, I was able to make an order by consent severing Adama's claim against Raam from Raam's third party claims. This approach had advantages for both parties. From Adama's perspective it could proceed with its claim against Raam unimpeded by Raam's third party proceedings (Adama's claim has since been allocated a fixture and is to be heard over two weeks commencing on 3 August 2020). From Raam's perspective, the approach avoided the necessity of commencing new proceedings.

16

In his submissions on Raam's behalf Mr Holden described that company as a “fixer”. By this I understood him to mean that Raam merely facilitated Adama's acquisition of the Mancozeb. It is common ground that Raam did not handle the product at all. As already said, Aristo was responsible for its preparation, which it engaged Laxmi to undertake. It was also responsible for its packaging and labelling. Falcon arranged shipment.

17

In its third party claims, Raam says that in those circumstances it could not have been responsible for any contamination, which must therefore have occurred further down the manufacturing and supply chain. At this stage, it does not claim to be able to pinpoint exactly where. Accordingly, it sues all of the entities involved.

18

Having filed its third party notices and statements of claim, Raam proceeded on the basis that it was entitled to serve these outside the jurisdiction without leave pursuant to r 6.27 of the High Court Rules 2016.

19

Raam first communicated with the third parties asking whether they were prepared to accept and acknowledge service of the originating documentation in the third party claims against them. These enquiries appear to have been ignored by Falcon, Aristo, Laxmi and Orchid. But UPL accepted service. Raam therefore arranged for service on the other third parties through diplomatic channels. My understanding is that as at the date of the hearing before me the originating documentation had been served on Laxmi and Orchid (though those entities had not taken any steps in the proceeding), but was still to be served on Falcon and Aristo.

20

For its part, having accepted service, UPL filed and served the appearance under protest to jurisdiction pursuant to r 5.49 of the High Court Rules that Raam now applies to have set aside.

21

The Court has the benefit of a considerable amount of affidavit evidence before it. For a start, there is the evidence filed and served by Adama and Raam in connection with the former's application to set aside or sever the third party proceedings to which I have already referred. In relation to this application, Raam relies also on affidavit evidence sworn by Mr Saurabh Gupta, the company's General Manager, Ms Caitlin Barclay, a solicitor employed by the firm representing the company in this proceeding and Mr Gautam Khazanchi, a New Delhi advocate. For its part, UPL relies also on affidavits sworn by Mr Suman Dutta, the company's Vice President, Mr Rohit Kumar, its Global General Counsel, and Mr Amitesh Mishra whose evidence has already been mentioned.

22

The sole purpose of the affidavits sworn by Messrs Khazanchi for Raam and Mishra for UPL was to exhibit the opinions obtained for those parties by, respectively, Justices Dipak Misra and V N Khare, the two former Chief Justices.

Principles governing Raam's interlocutory application
23

Both Mr Holden for Raam and Mr Johnson for UPL took as their starting points r 6.29 of the High Court Rules which provides:

6.29 Court's discretion whether to assume jurisdiction

(1) If service of process has been effected out of New Zealand without leave, and the court's jurisdiction is protested under rule 5.49, the court must dismiss the proceeding unless the party effecting service establishes—

(a) that there is—

(i) a good arguable case that the claim falls wholly within 1 or more of the paragraphs of rule 6.27 ; and

(ii) the court should assume jurisdiction by reason of the matters set out in rule 6.28(5)(b) to (d) ; or

(b) that, had the party applied for leave under rule 6.28,—

(i) leave would have been granted; and

(ii) it is in the interests of justice that the failure to apply for leave should be excused.

24

Mr Holden emphasised that in terms of r 6.29(a)(i) all Raam had to establish was a good arguable case that the claim falls within one or more of the paragraphs r 6.27, as opposed to a good arguable case against UPL on the merits. In Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd 1 the Court of Appeal explained that for the purposes of taking advantage of r 6.27 and serving proceedings abroad without leave, it is sufficient if at least one cause of action falls within the rule, but that if there is a challenge to New Zealand as the forum for the proceeding, because r 6.29(1)(a)(i) requires that the proceeding fall wholly within r 6.27,...

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1 cases
  • Adama New Zealand Limited v Raam Chem Pte Limited
    • New Zealand
    • High Court
    • 29 May 2020
    ...HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE CIV-2018-485-961 [2020] NZHC 1163 BETWEEN ADAMA NEW ZEALAND LIMITED Plaintiff AND RAAM CHEM PTE LIMITED Defendant AND FALCON INTERNATIONAL BIOSCIENCES PRIVATE LIMITED First third party ARISTO B......

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