Sunday, January 13, 2019

Vaishnav Puri v Kishor Sippy case brief

Vaishnav Puri v Kishor Sippy case brief summary 2006

  1. Puri and Sippy group of businesses are in a partnership, SSTS and together claim the general agency business of ‘Contship’.
  2. In Dec 2001, Puri group sets up a separate shipping company and on 1.9. 2001, a termination notice was sent by contship to SSTS which was received by Puris. After termination of Contract, Puri group, entered into a contract with Contship with their newly incorporated company.
  3. The issue – Whether the diversion of contship agency from SSTS to Seaworld amounted to a breach of fiduciary duty on the part of Puris as directors?
  4. Holding
    1. Sec 88 trusts Act, 1882
      1. where a director of a company bound in a fiduciary character to protect interest of other person gains for himself any pecuniary advantage by availing himself of his character
      2. or where he enters into any dealings under circumstances where his own interests are adverse to those of others and gains any pecuniary advantage, he must hold the advantage so gained for the benefit of such other person.
    2. Whether there was any fiduciary relationship left between the parties
      1. An element of confidence must be subsisting
        1. The subsidiary of Sippy – Meridian. The company in loses but Meridian making profits. Funds from SSCO diverted to Meridian.
    3. Whether any business opportunity was still available to SSTS in the background of the specific assertion of Contship that it had consciously terminated its agency with SSTS
      1. The second part of SEC 88
      2. Availability of business opportunity
        1. Contship had consciously terminated the agreement.
        2. Throughout dealt with Puris only and still supporting Puris.
        3. Recognized Puris as their only agent in India.
        4. In event of termination of the agency, the business opportunity came to an end.
        5. On account of termination of agency by Contship, SSTS had no longer any business opportunity.
      3. Whether the Conduct of Puris can be considered as unfair conduct?
        1. Not disclosing termination letter
        2. Not negotiating
        3. Defending passing off
        4. Not straight conduct but still cannot amount to oppression.

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