Traxys Europe SA v Balaji Coke Industry Pvt Ltd

2. Where Balaji claims that a document requires special protection, the document should be produced in the first instance (by the relevant date ordered by the Court or agreed by the parties and production should not await determination of any claims to confidentiality) to Traxys on the basis that disclosure will be restricted to individuals contemplated by the terms of the undertaking set out in Schedule 1 and who have provided such an undertaking, unless otherwise agreed. Balaji should also provide at the time of production a written statement of the basis for the claim of confidentiality (but is not required to disclose the nature of the contents of the document to the extent that such disclosure would destroy the claimed confidentiality).

3. Where Balaji claims that a document requires special protection beyond that conferred by paragraph 2 above, Balaji is to provide a written statement of the basis for the claim (but is not required to disclose the nature of the contents of the document to the extent that such disclosure would destroy the claimed confidentiality) and the parties will endeavour to agree a further regime for the production of the documents. Until such time as that regime is agreed Balaji must produce the documents to Traxys on the basis that disclosure of the documents will be limited to Traxys' external lawyers who have executed the undertaking set out in Schedule 1 and who also undertake to not disclose the documents to any person other than Traxys's external lawyers.

4.1 challenges the claim for confidentiality over a document; or

4.2 challenges the need for a confidentiality regime in accordance with that set out in paragraph 2 or paragraph 3 above in respect of the document, then Traxys may provide written notice of the challenge to Balaji. Any challenge under this clause must be in writing and must be made within ten (10) business days of the documents being produced or as otherwise agreed. If Traxys does not make a challenge before the applicable deadline, it will be taken to have waived its right to make such a challenge (subject to any other order of the Court).

If any challenge is made as provided for in paragraph 4, then Balaji shall, if a confidentiality regime is still sought to be imposed, within five (5) business days or as otherwise agreed, express its position to Traxys in writing. If Balaji does not do so:

a. in the case of documents the subject of paragraph 2 above, it will be taken to have waived its right to confidentiality;

b. in the case of documents the subject of paragraph 3 above, the document will still maintain the confidentiality afforded by paragraph 2 (subject to any other order of the Court).

Following any written notice by Balaji as provided for in paragraph 5 above, Traxys may give further written notice to Balaji within five (5) business days or as otherwise agreed that it presses its challenge in relation to any confidentiality claimed over a document or the need for a confidentiality regime.

Within five (5) business days of receipt of written confirmation of Traxys's position under paragraph 6 above, or within such other time as the Court orders or is otherwise agreed, Balaji may make application to the Court for an order modifying the obligation to produce the document by the imposition of a confidentiality regime, failing which confidentiality will be waived. Until the application is determined, the document shall continue to be protected in accordance with the confidentiality regime set out in paragraph 2 or paragraph 3 (as applicable) above. To the extent that it is practicable and without causing undue delay, such applications may be heard together.

Subject to any further agreement between the parties or Court order to the contrary, any document for which Balaji asserts confidentiality under paragraph 2 or special protection under paragraph 3 will be governed by the confidentiality regime set out in paragraph 2 or paragraph 3 above (whichever is applicable).

For the avoidance of doubt, nothing stated herein is taken to relieve the parties of the implied undertakings that attach to documents produced in the proceedings.

Ordered by the Court Schedule 1 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY DIVISION: GENERAL No NSD 1490 of 2011 TRAXYS EUROPE SA Applicant BALAJI COKE INDUSTRY PVT LTD First Respondent BOOYAN COAL PTY LIMITED ACN 115 420 598 Second Respondent

Confidentiality Undertaking Confidentiality claims by Balaji in relation to documents produced to Traxys as referred to in clause 2 of the confidentiality regime I undertake to the Court and to the First Respondent (Balaji) in relation to documents produced by Balaji in these proceedings and identified as falling within paragraph 2 of the confidentiality regime in force between the Applicant and Balaji (the documents), that subject to the written consent of Balaji or an order of the Court, or as required by law:

1. I will not use the documents or any information contained in them other than for the conduct of these Federal Court proceedings numbered NSD 1490 of 2011, and any proceedings which are joined to, or to be heard with, these proceedings or any appeal from the proceedings.
2. Subject to paragraph 3 below, I will not, without the prior written consent of Balaji, or an order of the Court, or as required by law, disclose the documents or their contents either directly, or indirectly to any person.
3. The documents and their contents may be disclosed by me to: (a) any of the following persons provided that that person has signed a confidentiality undertaking substantially in the terms of this confidentiality undertaking: (i) any partner or employee of any firm of solicitors retained by the Applicant; (ii) any barrister retained by the Applicant; (iii) any independent expert retained by the Applicant; (iv) Mr Jonathan Director, General Counsel of the Applicant. (b) any Judge of the Court, or his or her associate, in connection with proceedings NSD 1490 of 2011.
4. The documents will be kept secure by me.
5. I undertake to ensure the return of the documents to the solicitors for Balaji by such date as is ordered by the Court.
6. Where I am a person referred to in paragraph 3(a)(i) or (ii) above and where Balaji has claimed that the documents attract the protection of paragraph 3 of the confidentiality regime and Traxys and Balaji have not yet agreed upon a regime, I further undertake that I will not disclose the documents to any person other than the external lawyers for Traxys who have signed a confidentiality undertaking substantially in the terms of this confidentiality undertaking until a regime is agreed upon that relieves me of this obligation or until the Court orders that the protection in paragraph 3 does not apply.
7. The restrictions in this undertaking shall not apply if, and to the extent that, the documents or the information contained in the documents are in, or enter, the public domain, other than as a result of a breach of this undertaking. Dated: Signature Name (please print) Representative of/position

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1490 of 2011

JUDGE: FOSTER J DATE: 5 JUNE 2012 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 The applicant (Traxys) has applied this morning for an order joining a company called Concast Exim Limited (Concast), which is a company incorporated in India, as an additional respondent to this proceeding and for leave to serve the current form of Originating Application on Concast in India. In Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2) [2012] FCA 276, I addressed, to some extent, the involvement of Concast in the events relevant to the dispute which has arisen between Traxys and the first respondent (Balaji). In that judgment, under the heading "Balaji's Interest in Booyan", I said: Balaji's Interest in Booyan 30 According to official records maintained by the Australian Securities and Investments Commission (ASIC) in respect of Booyan, as at 25 August 2011 and also as at 21 September 2011, the whole of the issued capital of Booyan (two ordinary fully paid shares of $1.00 each) are registered in the name of Balaji and are said to be beneficially owned by it. It appears that those shares were transferred to Balaji in the first half of 2010. 31 As at 29 August 2011, Booyan was the holder of Exploration Permit No 969 in the District of Rockhampton issued by Queensland Mines and Energy, Department of Employment, Economic Development and Innovation. That permit authorises Booyan to explore for coal in the area covered by the permit, which is an area located approximately 30 km north-west of Bundaberg, Qld. 32 At the hearing before me, Balaji tendered a copy of the Minutes of a Meeting of the Board of Directors of Balaji held in Kolkata on 11 April 2011 and a copy of the Minutes of a Meeting of that Board of Directors held in Kolkata on 15 July 2011. Each of those Minutes is signed by Naresh Sharma. 33 At the 11 April 2011 meeting, the directors of Balaji resolved to sell its entire shareholding in Booyan for a minimum consideration of AUD1 million or its equivalent in Indian rupees. Mr Naresh Sharma was authorised to negotiate a sale on those terms on behalf of Balaji and to execute all necessary documents on behalf of Balaji. 34 At the 15 July 2011 meeting, the directors of Balaji resolved immediately to write off all debts due to Balaji from Booyan. 35 Correspondence passing between Concast and Balaji in the period between 20 April 2011 and 18 June 2011 proved the following: (a) Preliminary discussions concerning a merger or joint venture between Balaji and Concast commenced on 19 April 2011; (b) On 12 May 2011, Concast offered to buy from Balaji a 50% stake in Booyan for AUD300,000; (c) Further discussions between representatives of Concast and representatives of Balaji ensued in the period 12-24 May 2011. Those discussions culminated in Balaji offering to sell to Concast its entire shareholding in Booyan for AUD14 million plus repayment in full of the loans made by Balaji to Booyan; (d) Negotiations continued into June 2011; and (e) On or about 18 June 2011, an in-principle agreement for the sale to Concast of the whole of Balaji's shareholding in Booyan was reached at a price of AUD1,050,000 (equivalent to approximately INR 50 million), subject to the execution of a formal Share Sale and Purchase Agreement. 36 On 16 July 2011, INR 50 million was deposited into Balaji's bank account held at the Kolkata branch of the Allahabad Bank. 37 The evidence before me showed that the amount which Booyan had invested in EP969 as at 30 June 2011 was $415,971 and that Booyan's only other asset as at that date was its cash at bank ($26,629.86). As at that date, it had liabilities totalling $301,218.38, of which $264,759 was a debt due to Balaji. 38 Naresh Sharma did not give evidence before me. From the evidence that was tendered before me, it is clear that he was the officer of Balaji who had the carriage of all negotiations with Concast. He signed all of the relevant correspondence which came from Balaji and received all of the relevant correspondence from Concast. 2 Subsequent to the publication of my reasons in Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2) and to the making of orders in order to give effect to those reasons, Balaji supplemented its evidence. In particular, it filed an affidavit, affirmed by Naresh Sharma, in which the deponent deals with various facts and circumstances relevant to the assertion made by Balaji that it sold its shares in Booyan to Concast pursuant to a formal Share Sale Agreement entered into on 15 July 2011. It is quite clear that Balaji, and possibly Booyan, intend to argue, in answer to the remaining claims made by Traxys in this proceeding, that the beneficial interest in Balaji's shares in Booyan was conveyed to Concast on 15 July 2011. If Balaji and Booyan succeed in making good that contention, Traxys will most likely have no assets in this jurisdiction against which to enforce the judgment which I ordered in its favour on 12 April 2012. 3 The legal representative of Balaji who appeared today has informed me that her client consents to the joinder of Concast and to the order for service out of the jurisdiction sought by Traxys. 4 The relevant rules of Court are rr 9.05, 10.42 and 10.43 of the Federal Court Rules 2011. The current proceeding is within the class of proceedings covered by r 10.42 and is thus the type of matter where leave to serve out of the jurisdiction may be ordered. Rule 10.43 lays down a number of requirements before such an order might be made. In particular, r 10.43(3) and r 10.43(4) provide as follows. 10.43 Application for leave to serve originating application outside Australia … (3) The application under subrule (2) must be accompanied by an affidavit stating: (a) the name of the foreign country where the person to be served is or is likely to be; and (b) the proposed method of service; and (c) that the proposed method of service is permitted by: (i) if a convention applies - the convention; or (ii) if the Hague Convention applies - the Hague Convention; or (iii) in any other case - the law of the foreign country. (4) For subrule (2), the party must satisfy the Court that: (a) the Court has jurisdiction in the proceeding; and (b) the proceeding is of a kind mentioned in rule 10.42; and (c) the party has a prima facie case for all or any of the relief claimed in the proceeding. Note 1 The law of a foreign country may permit service through the diplomatic channel or service by a private agent - see Division 10.5. Note 2 Rules 10.63 to 10.68 deal with service of local judicial documents in a country, other than Australia, that is a party to the Hague Convention. Note 3 The Court may give permission under subrule (4) on conditions - see rule 1.33. 5 Traxys has not supported the present application with any additional affidavit material. It relied upon the affidavit of Timothy James Grave affirmed on 2 September 2011 and filed in this proceeding on the same day as constituting sufficient compliance with r 10.43(3). That affidavit establishes that the method of service on Concast proposed by Traxys is permitted by the law of India. 6 In addition, I am satisfied that the Court has jurisdiction in this proceeding and that it is a proceeding of a kind mentioned in r 10.42 of the Federal Court Rules 2011 being an action to enforce a foreign award pursuant to s 8(3) of the International Arbitration Act 1974 (Cth). Traxys has, therefore, also met the requirements of r 10.43(4)(a) and (b). 7 There remains for consideration the requirement that Traxys satisfy the Court that it has a prima facie case for all or any of the relief claimed in the proceeding (as to which, see r 10.43(4)(c)). As I explained in Traxys Europe SA v Balaji Coke Industry Pvt Ltd (No 2), Traxys makes two broad claims in this proceeding: First, it claims judgment in the terms of the Award by way of recognition and enforcement of the Award. I have accepted that claim and appropriate orders were made on 12 April 2012. Second, it claims an order for the appointment of receivers to the shares held by Balaji in Booyan. This claim has not yet been determined. 8 By the orders made on 12 April 2012, I granted final relief in respect of part of the relief claimed by Traxys in this proceeding. In this sense, Traxys has more than satisfied the prima facie requirement in respect of that relief. That may be sufficient to satisfy r 10.43(4)(c) in the present circumstances. However, given that Traxys did not apply to join Concast until after the orders of 12 April 2012 had been made, I think that I should approach the question of whether a prima facie case has been established within the meaning of r 10.43(4)(c) in the circumstances of this case by considering whether Traxys has made out a prima facie case for the appointment of receivers to Balaji's shares in Booyan. Its case in this regard may be summarised as follows: (a) The Court has decided that the Award should be recognised and enforced and has entered money judgments accordingly. (b) Balaji continues to be the legal owner of the shares held in its name in Booyan. (c) Balaji contends that it sold those shares to Concast on 15 July 2011 pursuant to a Share Sale Agreement entered into between Balaji and Concast on that day. There is evidence to support Balaji's contention but the Court has not yet adjudicated upon that contention. Balaji bears the onus of proving that it no longer has any beneficial interest in those shares. (d) Traxys will argue at the final hearing that the transaction embodied in the Share Sale Agreement is a sham and that the Share Sale Agreement is a fabrication. There is some material that might tend to support Traxys' case in this regard (eg ASIC records in respect of Booyan which show Balaji as the owner of the relevant shares in late September 2011, more than two months after the date of the Share Sale Agreement). However, in order to make good these contentions on a final basis, Traxys will need to investigate the relevant dealings between Balaji and Concast and it is likely that its evidence will be supplemented. (e) In the circumstances, there is enough material before the Court supportive of Traxys' claim for the appointment of receivers to Balaji's shares in Booyan to justify the order sought by Traxys for service out of the jurisdiction. Although Concast is to become a party, no relief is sought against it directly. 9 I think that the submissions made by Traxys are correct and I accept them. The requirement laid down in the rules of Court that Traxys establish a prima facie case for the relief or part of the relief claimed has been satisfied. I do not mean, by making those remarks, to suggest that I have formed any firm or final view at the moment about Traxys' claim for an order appointing receivers to Balaji's shares in Booyan. Rather, I made the observations which I made simply to indicate that there is sufficient material before me to support the orders which Traxys now seeks, nothing more. 10 As I have said, Senior Counsel for Traxys has informed me that his client does not propose to amend the current form of his client's Originating Application but is content to serve that process in its current form on Concast. Presumably, it will invite Concast to participate in the balance of the hearing to such extent as Concast may desire. I was informed that no relief is to be sought directly against Concast although, upon the assumption that the share sale transaction embodied in the Agreement dated 15 July 2011 was genuine, Concast has a substantial interest in the balance of this proceeding. The basis upon which Concast is to be made a party is that the relief which is sought may affect its rights with the consequence that it is, on any view of things, a necessary party. 11 I propose to grant leave to the applicant to amend its Amended Originating Application in order to join Concast. I will also grant leave to Traxys to serve that Originating Application on Concast in India by serving a copy at its registered address in India. 12 There will be orders accordingly. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.