BLUE DIAMONDS LIMITED v. AMSTERDAM – ROTTERDAM BANK M. V. AND ANOTHER (AMRO

017-SLLR-SLLR-1993-2-BLUE-DIAMONDS-LIMITED-v.-AMSTERDAM-ROTTERDAM-BANK-M.-V.-AND-ANOTHER-AMRO-.pdf


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SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case)
BLUE DIAMONDS LIMITED
v.AMSTERDAM – ROTTERDAM BANK M. V. AND ANOTHER(AMRO BANK CASE)
SUPREME COURT.
BANDARANAYAKE, J.,
FERNANDO, J. ANDDHEERARATNE, J.
S.C. APPEAL NO. 17/91.
A. NO. 352/87(F).
C. COLOMBO NO. 86745/M.
JUNE 17 AND 19, JULY 10 AND 11, 1991.
FEBRUARY 4, 20, 21, 24, 25 AND 26, 1992.
Sale – Contract for sale of diamonds — Place where contract sought to be enforcedwas made – Place where contract was made and cause of action arose -Residence of branch of company – Jurisdiction – Traversing jurisdiction in theanswer.
Arrangements were made primarily though the Blue Diamonds Limited's(appellants) bankers the Bank of Ceylon, Colombo with the Amsterdam – RotterdamBank (Amro) of Amsterdam, the defendant for delivery of a parcel of diamondsby Amro to B. Schatz B. V. upon certain terms as to payment. Alleging thatAmro did not comply with the agreed terms and conditions the appellant institutedan action for damages against Amro.
The documents.relevant to the sale were :
An export invoice dated 19.9.80 issued by the appellant describingAmro as ‘he consignee (account of B. Schatz B. V.) stipulating asterms. " To be issued against a trust receipt for 180 days for the fullc.i.f. value signed by an authorized officer of Schatz B. V. The diamondswere 139.01 carats in weight, having a c.i.f. value of US $ 50,742/95(Rs. 863,645).
Airway bill for carriage of parcel.
A' cover schedule ° issued by Bank of Ceylon to Amro describing appellantas drawer and Schatz as drawee with notes and instructions. This wasa collection order issued by the Bank of Ceylon on behalf of its principal,the appellant.
A bill of exchange drawn by the appellant on Schatz for payment of US$ 50,742.95, 180 days after sight in favour of Amro.
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The parcel of diamonds together with documents was duly carried toAmsterdam and delivered to Amro who delivered the parcel to Schatz withouthowever obtaining from Schatz a trust receipt and without presenting the bill ofexchange to Schatz for acceptance despite being aware of these terms.
By this time another two parcels of diamonds having invoice value ofUS $ 45,826/55 and US $ 62,878/49 had been delivered to Schatz.
The original contracts of sale were varied by the substitution of agreedrevised sale prices – the revised price for the first parcel being reduced fromUS $ 50,742/95 to US $ 41,892/71 and for the 2nd and 3 parcels US $33, 729/15 and US $ 58, 870/53. By 10.10.80 Amro had remitted a total of US$ 135,492/39 (exactly US $ 1000 more than the total amount due on the revisedrates).
Held :
As there appeared to be a new agreement between the buyer and the sellerwhereby the latter had agreed to a reduced price payable immediately, Amroremitted such lower price. Thereupon bills of exchange and trust receipts seemednot merely inappropriate but improper. Where the buyer has paid the agreedprice he cannot be required to execute instruments obliging him to pay the priceagain.
The contract sued upon was not a contract (whether of agency or otherwise)concluded by means of discussions directly between the appellant and Amro,but a contract evidenced by the export invoice, airway bill, cover schedule andbill of exchange, constituted by the acts of the Bank of Ceylon and Amro.Acceptance was not by telephonic communication to the appellant but by intimationto the Bank of Ceylon and by performance. The contract had been entered intoin Amsterdam.
(a) Section 45, of the CPC requires a statement of the facts setting out thejurisdiction of the court to try and determine the claim. The necessary avermentsmust appear in the body of the plaint in the form of distinct averments. The pleaas to residence in the plaint was ambiguous. Section 9, CPC confers jurisdictionon the District Court, within whose jurisdiction the defendant resides. "Resides"in the case of a natural person refers to place where he has his familyestablishment and home. In the case of corporation in India the corporation isdeemed to carry on business at the sole or principle office. But our Civil ProcedureCode does not have a similar explanation. The plea based on residence in theplaint is insufficient as there is no unequivocal assertion that Amro resides withinjurisdiction. The use of the word "deemed1 in the plaint to describe residencesuggests that Amro did not in fact reside within the jurisdiction.
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case)251
(b) In traversing jurisdiction the answer must in terms of section 76 CPCdo so by a separate and distinct plea expressly traversing such averment. Thegeneral denial is insufficient. Even a specific denial of the paragraph in theplaint averring jurisdiction would generally be insufficient if it could not indicatewhether the defendant –
was denying that a contract had been entered into and even ifthere had been such a contract, it had not been entered intoat Colombo ; or
was denying such a contract, but was conceding that if such acontract was proved, it had been entered into at Colombo ; or
while admitting that a contract has been entered into, was denying thatit had been entered into at Colombo.
What section 76 requires is a specific denial of jurisdiction. No particularformula is required. A plea which ex facie and unambiguously involves adenial of jurisdiction would suffice.
(c)(i) Although the answer did not deny jurisdiction on the ground ofresidence this does not amount to an admission of jurisdiction, because theplaint was defective in that respect.
The answer contained an adequate denial of jurisdiction on thebasis of the place of contract because it denies any agreement entered intoat Colombo within the jurisdiction of the court.
In regard to jurisdiction based on the accrual of a cause of action,the answer did‘not adequately traverse jurisdiction because it contained onlya denial of the accrual of such cause of action and was silent as to jurisdiction.That the District Court of Colombo had jurisdiction, on the basis that the allegedcause of action arose within its limits was not denied and had therefore to betreated as admitted by Amro.
Where jurisdiction is admitted or deemed to be admitted no question arisesas to the burden of proof on the framing of issues. Section 150, explanationmakes it clear that the plaintiff must establish so much of the material part ofhis case as is not admitted by the defendant. Although the contract had beenentered into at Amsterdam, the District Court of Colombo had jurisdiction on thebasis of the accrual of the cause of action.
The fact that Amro, as a banker, obtained immediate payment from the buyerand remitted it to the seller cannot per se be regarded as a breach. The conditionthat delivery to schatz should only be upon obtaining a trust receipt for 180 daysand upon acceptance of a bill of exchange payable 180 days after sight wasintended to give effect to a commercial transaction between buyer and seller.Receiving the price 180 days before it was due is favourable to the seller.
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Adjustments, variations, negotiations and compromises are an inevitable andcontinuing part of business transactions. The instructions originally given werevaried and Amro substantially complied with them and the appellant ratified Amros'conduct. The appellant failed to establish a cause of action.
Cases referred to :
N. Y. Life Insurance Co. v. Public Trustee (1924) 2 Ch. 101.
De Beers Consolidated Mines Ltd. v. Howe (1906) AC 455.
Cesena Sulphur Co. Ltd. v. Nicholson (1876) 1 Exch. D. 428.
Union Corporation Ltd. v. I.R.C. (1952) 1 All E.R. 646.
Bisset v. Loftus (1884) 6 S.C.C. 152.
Sulaiman v. Ibrahim (1890) 9 S.C.C. 131.
Mendis v. Perera (1908) 13 N.L.R. 41.
Chetty v. Saibo (1891) 2 Cey. L.R. 37.
Marimuttu v. Commissioner for Registration of I. & P. Residents (1956)57 N.L.R. 307, 309.
Newby v. Von Oppen (1872) 7 Q. B. 293.
Dunlop Company v. Actien-Gesellschaft etc. Vorm. Cudell and Company(1902) 1 K.B. 342.
Saccharin Corporation Ud. v. Chemische Febrik von HeydenAktiengesellschaft (1911) 2 K.B. 516.
The Theodohos (1977) 21 Q.B. 428.
Le Mesurier v. Le Mesurier (1893) 3 S.C.R. 12, 19, 20.
Le Mesurier v. Le Mesurier (1898) 1 N.L.R. 160.
Harris v. Taylor (1951) 1 K.B. 580.
Dulles v. Vidler 1 Ch. 842.
Henry v. Geoprosco (1975) 3 W.LR. 620.
Arnaldo da Brescia, (1922) 23 N.LR. 391.
Gunawardene v. Jayawardene (1971) 74 N.LR. 248.
Perera v. Chelliah (1970) 74 N.LR. 61.
Rayner & Co. Ltd. v. Hambro's Bank Ltd. (1943) 1K.B.37.
Bank Melle Iran v. Barclays Bank (1951) 2 Lloyd'sRep.367.
Midland Bank v. Seymour (1955) 2 Lloyd's Rep. 147.
Edward Owen Ltd. v. Barclays Bank Ltd. (1977) 3 W.LR. 764.
Richardson Scale Co. Ltd. v. Polimex-Cekop (1978) 1 Uoyd Rep. 161.
Siporex Trade v. Banque Indosuez (1986) 2 Lloyd's Rep. 146.
United City v. Royal Bank (1982) 2 Lloyd's Rep. 1.
APPEAL from judgment of the Court of Appeal.
Laksman Kadirgamar, P.C. with S. L. Gunasekera, Miss. Lalitha Seneviratne,Shanaka de Silva, Maithri Gunaratne and Miss. S. M. Divulwewa for appellant.
Eric Amerasinghe, P.C. with Harsha Soza for the respondent.
Cur. adv.vult.
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)253
September 23, 1992.
FERNANDO, J.
The plaintiff-Appellant company ("the Appellant") carries on thebusiness of cutting and polishing uncut, or rough, diamonds ; itpurchases uncut diamonds from foreign suppliers, and sells thefinished product to foreign dealers. The present appeal involves onesuch transaction connected with the sale of 139.01 carats of cut andpolished diamonds by the Appellant to B. Schatz BV of Amsterdam("Schatz") ; certain arrangements were made primarily through theAppellant's bankers, the Bank of Ceylon in Colombo, with theAmsterdam-Rotterdam Bank ("Amro”) of Amsterdam, the Defendant-Respondent, for delivery of the diamonds by Amro to Schatz, uponcertain terms as to payment. Alleging that Amro did not comply withsome of the agreed terms and conditions, the Appellant instituted anaction for damages against Amro ; this was dismissed ; an appealto the Court of Appeal was also dismissed. Several questions of lawbeing involved, special leave to appeal was granted.
THE FACTS
Previous sales of diamonds by the Appellant to Schatz, had notgiven rise to any disputes. Having obtained all necessary approvalsand certificates, the Appellant shipped the parcel in dispute in September1980, and thq rights and obligations of the various parties involvedhave to be ascertained from the following documents :
An export invoice (P12) dated 19.9.80 issued by the Appellant,describing Amro as consignee ("Account of B. Schatz B.V."),containing a printed note at the foot thereof ” Through Bank of Ceylon,Colombo ”, and stipulating :
* TERMS : To be issued against a trust receipt for 180 daysfor the full C.I.F. value signed by an authorised officer of Schatz
V. Weesperplein 4, Amsterdam."
The diamonds were 139.01 carats, in weight, having a c.i.f. valueof US $ 50,742/95 (Rs. 863,645/00).
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An airway bill (P1) dated 22.9.80 whereby the Appellantcontracted with Swissair for the carriage of the parcel valued atRs. 855,008/72 from Colombo to Amsterdam, the consignee beingAmro on account of Schatz.
A “ cover schedule " (P2) dated 25.9.80 issued by the Bankof Ceylon to Amro describing the Appellant as " Drawer “ and Schatzas "Drawee", and containing the following notes and instructions :
" Kindly acknowledge receipt of documents and followinstructions, inclusive of general instructions overleaf, under adviceto us."
" On maturity, please remit proceeds to Morgan Guaranty TrustCo. of New York, 23, Wall Street, New York 15, U.S.A., for creditof our account, under advice to us by authenticated cable "
DRAWERDRAWEETENORAMOUNT
Blue PeacockB. Schatz B. V.,180 Days D/A US$ 50,742/95
Diamonds Ltd.,Weesperplein 4, 1018 X A
P. 0. Box 439, Colombo Amsterdam, Holland.
Some of the general instructions on the reverse of the cover schedulewere :
"1. Please present all bills and/or documents for acceptance orpayment immediately on receipt and advise result and/ordate of maturity without delay.
Reason for dishonour should always be indicated whenadvising non-payment or non-acceptance.
If dishonoured, store goods on arrival in bonded warehouse(notify insurance agents in the event of damage) ; insureagainst fire theft & S.R. & C.C. for invoice value plus 10%and advise drawee. Any duty, landing, clearing and ware-housing charges must be collected from the consigneebefore delivery."
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)255
This " cover schedule “ was thus a collection order issued by theBank of Ceylon on behalf of its principal, the Appellant.
The cover schedule also confirmed the text of a tested telexsent to Amro on 26.9.80 :
" Tested as on twentysixth September 1980 for USDLRS
50742-95 test Our customer Blue Peacock Diamonds Ltd.,
has consigned to you a parcel of gems on account of B. SchatzB. V. Weesperplein 4, 1018 X A, Amsterdam, under Swissairairway bill No 085-5420 6736 STOP Please release parcel todrawees on a trust receipt for 180 days for USDLRS 50742-95signed by an authorised officer of B. Schatz B. V. Weesperlein4, 1018 X A, Amsterdam, Holland pending receipt of the relevantshipping documents under our ref. FBC 43/713 STOP Remitproceeds to Morgan Bank New York for the credit of our accountand request them to advise us by another authenticated cable onreceipt of proceeds STOP "
A bill of exchange (P3) dated 24.9.80 drawn by the Appellanton Schatz, for payment of US $ 50,742.95, 180 days after sight infavour of Amro.
The parcel of diamonds, together with a copy of the airway bill,invoice and other documents, was duly carried to Amsterdam, anddelivered to Amro. The cover schedule, together with a copy of theairway bill, invoice and other documents, as well as the bill ofexchange, was sent by the Bank of Ceylon to Amro by registeredairmail, and was received on 1.10.80. There is no evidence as towhen Amro (a) received the parcel from Swissair, and (b) deliveredit to Schatz, but it is common ground that Amro did deliver theparcel to Schatz without obtaining from Schatz a trust receipt, anddid not present the bill of exchange to Schatz for acceptance. In theabsence of any assertion by Amro to the contrary, it must be assumedthat the telex sent on 26.9.80 was received the same day ; in anyevent its text became known when the cover schedule was receivedon 1.10.80. Amro did not claim in regard to the delivery of the parcelthat it had acted independently of the instructions of the Bank ofCeylon given in the aforesaid telex and cover schedule, or that ithad refused to act on such instructions. Hence the factual positionis that Amro delivered the parcel to Schatz with full knowledge and
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acceptance of the instructions set out (i) in the invoice, telex andcover schedule, to obtain a trust receipt, and (ii) in the cover schedule,to obtain acceptance of the bill of exchange.
By this time another two parcels of diamonds, having invoicevalues of US $ 45,826/55, and US $ 62,878/48, had been dulydelivered to Schatz. By a telex dated 9.10.80 (P14) Schatz referredto " revised prices " in respect of all three parcels ; this telex madedetailed reference to each item of the corresponding invoice,specifying the item number, weight in carats. " original price " (oldrate per carat), and " revised price " (new rate per carat) ; it thenset out the total weight in carats, the " original value " and the"revised value." Reference was made throughout – seven times inall – to " revised " price and " revised " value, and not to revised11 profit ", “commission" or otherwise. That telex further stated :
" We agreed melle (sic) prices foil, market conditions. You wouldsend them to me for a 6 percent less. Keep in mind prices wherefor 10 P.C. All your makes are lighter, will still pay yr pr but reserve
the right to lower a little bit later, if not saleable(Details of
the revised invoices were set out)Total of revised
invoices : USD 134.492, 39 USD 65.000 (payments made by us)to be paid by us USD 69.492,39. After receipt of yr revised invoicesby telex we will make this additional payment to you "
The Appellant respondend by a telex dated 10.10.80 (P13) ;protesting faintly, but nevertheless confirming, the “ revised “ prices.Learned President's Counsel for the Appellant, told us that" melle “ meant a reduction. Detailed reference was made to eachitem of each invoice, and this telex thus constituted what P14 hadrequested, " yr revised invoices by telex
“ I will confirm by yr prices but I feel that the prices we agreedfor ds/sc/am/3/80 and written on yr copy/my copy of the invoice
in Colombo should be paidI give below the agreed
revised invoice prices as per yr tix total of revised
invoices : US dollars 134, 492.39. Pre-payments advised by youUS dollars 65,000 to be paid US dollars 69,492.39. Please remitby t.t. preferably to American Express International Banking
Corporation, Colombo 1 Sri Lankaor to Bank of Ceylon
– for Blue Peacock Diamonds Ltd. P1 ensure that Amro Bank
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)257
sendsa tested telex to Bank of Ceylon confirming that
they paid US dollars 45,000 on yr behalf for Blue PeacockDiamonds"
The position in regard to payments at this point of time (i.e.immediately before 10.10.80) was as follows :
Invoice No. Original Amount ‘Revised Price" Payments
3/8045.826/5533,729/1515,000(11.9.80)
4/8050,742/9541,892/7145.000(29.9.80)
5/8062.878/4858,870/535,000(3.10.80)
TOTAL 134.492/3965,000
BALANCE DUE 69,492/39
Thus, as stated in the telex (P14), the total due on the threeinvoices (revised prices) was US $ 134,492/39, of which US $ 65,000had been paid, and the balance due was US $ 70,492/39. A sumof-US $ 70,492/39 (exactly US $ 1000 more than the balance thendue) was remitted on 10.10.80. Amro then informed the Appellant,by telex dated 14.10.80 (P4), that :
" Re your telex dated Okt, 10, 1980 toSchatz herewith
we inform you that on Okt. 13, 1980 we sent directly to Branchof Ceylon, Colombo a telex, in which we confirm the paymentorder of USDLRS 45,000 – in your favour. We also request youto instruct the Bank of Ceylon to inform us by tested cable thatthe drafts in our possession to the amounts of USDLRS 45.826,55USDLRS 50742,95 and USDLRS 62.878,48 can be cancelledwhen you have received the payments of USDLRS 15.000, -USDLRS 45.000, – USDLRS 5.000 – and USDLRS 70492,39."
Prima facie, the original contracts of sale were varied by thesubstitution of agreed revised sale prices. Although P13 and P14 werecommunications between the Appellant and Schatz, both partiesexpected Amro to be informed, for the agreed balance ($6,492/39)was to be remitted by Amro ; the last sentence of P13 demonstratesthe Appellant's awareness that Amro was kept informed ofprevious payments as well. Although instructions for the severalpayments were given earlier, the Appellant appears to have received
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confirmation from the Bank of Ceylon of the receipt of each suchpayment about a week or two later: thus the receipt of US $ 45,000and US $ 5,000 remitted on 29.9.80 and 3.10.80 respectively, wereconfirmed on 14.10.80 and 9.10.80 respectively. The final paymentof US $ 70,492/39 made on 10.10.80, was confirmed on 28.10.80.It is however clear from the correspondence that by 10.10.80 Amrohad remitted a total of US $ 135,492/39.
The Appellant appears to have sent another telex dated 15.10.80to Schatz, but this has not been produced. It is clear from P4 thatall three contracts required Amro to obtain from Schatz acceptanceof bills of exchange, and presumably also trust receipts. The purposeof these instruments was to obtain not immediate payment, butpayment within 180 days or out of the proceeds of re-sale, whicheverwas earlier : if payment was obtained, within the 180-day period,under the trust receipt, obviously payment could not have been againdemanded under the corresponding bill. Faced with what seemed tobe a new agreement between the buyer and the seller whereby thelatter agreed to a reduced price, payable immediately, Amro remittedsuch lower price. Thereupon bills of exchange and trust receiptsseemed not merely inappropriate but improper: where the buyer haspaid the agreed price how can he be required to execute instrumentsobliging him to pay the price again ? Not unnaturally, by P4 Amroasked for instructions – although probably regarded as purely formal- for the cancellation of the inchoate bills, thus making perfectly clearthe basis on which it was acting. There is nothing to suggest thatat that stage the Appellant disputed the correctness of Amro's beliefor conduct. It was only 18 months later that the Appellant for thefirst time took up the position that a sum of US $ 50,742/95was outstanding on that contract. The contents of P4 establish thatAmro did not represent to the Appellant that a trust receipt had beenobtained and that the bill had been accepted. Two further mattersneed to be mentioned. Even if the revised prices are ignored, andthe payments made by Amro are treated as if they had not beenappropriated to any particular contract, there is no explanation as tohow the Appellant appropriated these payments to satisfy the firstand the third in full, and not to the second before the third. Inwhichever way these were appropriated there would have been asurplus of almost US $ 27,000, and the Appellant failed to explainwhy credit was not given in this sum as against the claim ofUS $ 50,742/95 : inexplicably, the Appellant did not produce the
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)259
relevant books of account, and this made the contention that theaccounts were complicated all the more untenable. However, thedocuments show that Amro did apportion the payments among thethree contracts on the basis of the revised invoice prices, so thatUS $ 41,892 had been paid in respect of the contract in suit, reducingthe balance due on that contract (i.e. had there been no pricereduction) to less than US $ 9,000 paid in respect of the Contractin suit.
FINDINGS OF THE COURTS BELOW
The District Court held that (prior to the transactions in question)there had been discussions between representatives of the Appellantand Amro, in order to obtain the assistance of the latter in regardto the export of diamonds by the former to Schatz ; that the Bankof Ceylon had acted as the Appellant's agent in the export of theparcels of diamonds, and that Amro had acted as the Appellant'sagent in delivering the diamonds to Schatz. As to whether there wasa contract between the Appellant and Amro in regard to this particularsale of diamonds to Schatz, it was held that the Appellant had madean offer to Amro, which had been accepted in Amsterdam. Thatcontract had therefore been entered into in Amsterdam ; the allegedbreach, namely the failure to obtain a trust receipt and to presentthe bill of exchange to Schatz for acceptance, had also occurred inAmsterdam ; thus the District Court of Colombo lacked jurisdictionby reference ter the place where the contract had been entered into,and where the breach occurred. Both at the time of that contract,and the breach, Amro had no branch in Sri Lanka ; a branch hadbeen established and the business of banking was being carried inColombo at the time the action was instituted ; this was held notto confer jurisdiction ; the fact that Amro filed proxy and answer,did not amount to a submission to jurisdiction, as jurisdiction wastraversed in the answer. On the merits of the claim for damages,the Court held that although Amro had acted in breach of instructions(by failing to obtain a trust receipt and acceptance of the bill ofexchange), the Appellant had not suffered any loss and damagethereby, for the Appellant had agreed with Schatz to accept a reducedprice, and this had been remitted by Amro. The action was dismissedbut, considering Amro's breach of instructions, without costs.
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These findings were upheld by the Court of Appeal, whichdismissed the Appellant's appeal with costs. The only question whichwas considered at some length was whether the District Court hadjurisdiction on the basis of residence. It was held that a corporationwhich was carrying on business in several countries could be heldto be resident in more than one country ; but such a finding oughtnot to be made unless the control of the general affairs of thecorporation is not centred in one country but is divided and distributedamong two or more countries ; one factor to be looked for is theexistence, in the place claimed as being a residence, of some partof the superior and directing authority by means of which the affairsof the corporation are controlled. N. Y. Life Insurance Co. v. PublicTrustee (1), Ch. 101, De Beers Consolidated Mines Ltd. v. Howe (2),Cesena Sulphur Co. Ltd. v. Nicholson (3), and Union Corporation Ltd.v. I. R. C. w, were cited. Amro could not be considered as residentin Colombo merely because it had established a branch in Colombo,and there was evidence that “ the Colombo branch did not knowanything about the said transaction in diamonds."
THE APPELLANT'S CONTENTIONS
All these findings were strenuously contested by Mr. LakshmanKadirgamar, P.C., on behalf of the Appellant. His contentions in thisCourt be summarized as follows :
As to Jurisdiction :
The District Court of Colombo had jurisdiction on one or moreof the three grounds pleaded – i.e. that the defendant resided,the contract was entered into, and the cause of action arose,in Colombo – because none of these averments had been dulydenied in the answer, and jurisdiction had therefore beenadmitted ;
Assuming without conceding that jurisdiction had been dulytraversed in the answer, Amro had participated in the trial,adduced evidence, and invited the Court to decide on themerits ; and had thereby waived its objections to jurisdiction,and had submitted to jurisdiction ; and
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)261
In any event, all three grounds had been proved. Having aplace of business at the time action was instituted, constituted" residence The contract sued upon had been concluded bymeans of an offer made by the Appellant; Amro's acceptancehad been communicated from Amsterdam by telephone to theAppellant at Colombo, and had taken effect in Colombo. Someobligations under the contract had to be performed in Colomboand, upon breach, a cause of action had arisen in Colombo.
As to the merits :
Amro's admitted breach of instructions, particularly the failureto present the bill of exchange for acceptance, resulted in theAppellant being deprived of a valuable security worth US $50,742/95 ; as a banker, Amro was not entitled to look intoany question of settlement or payment as between buyer andseller, and should have carried out the Appellant's instructionsstrictly ; and the Appellant was therefore necessarily entitledto judgment in that sum ;
In any event, the Appellant was entitled to nominal damagesfor that breach ;
Although certain payments had been made by Amro, there hadbeen numerous transactions over a long period of time, andit was not possible to identify any of these payments as havingbeen made on account of the transaction in suit ; the burdenwas on Amro to prove its claim that Schatz had paid theAppellant the amount due on the relevant sale, and since thishad not been established, the Appellant was entitled to the fullamount claimed ; and
The telexes P13 and P14 referred not to the several contractsof sale between the Appellant and Schatz, but to anotherdistinct contract between them whereby Schatz had agreed tore-sell each parcel of diamonds and to share the profits arisingon such re-sale ; the agreement contained in those telexes wasfor a revision not of the original sale prices as set out in therelevant invoices, but of the agreed re-sale prices.
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THE CONTRACT SUED UPON
It is necessary at this stage to determine what exactly was thecontract sued upon. Mr. Kadirgamar submitted that there had beendiscussions in Amsterdam between a director of the Appellant andan officer of Amro, followed by telephone conversations betweenColombo and Amsterdam ; Amro's acceptance of the Appellant's offerhad been communicated by telephone from Amsterdam to theAppellant's director in Colombo ; the contract was therefore concludedin Colombo, upon the acceptance reaching the Appellant's director.It was his contention that by this contract Amro became the agentof the Appellant, and undertook the obligation to deliver parcels ofdiamonds to Schatz from time to time, obtaining from Schatz thestipulated documents. The evidence as to the existence of any suchcontract, its formation and its terms and conditions, was quite vagueand indefinite. In particular, as to the place of contract, there wasno evidence as to whether the alleged telephone conversationsconstituted a straight forward acceptance by Amro of an offer madeby the Appellant, or whether, instead, counter-proposals by Amrowere accepted by the Appellant – in which event, Mr. Kadirgamar'ssubmission as to the place of contract becomes untenable. He soughtto overcome all these difficulties by pointing to Amro's failure to leadany evidence from Amsterdam to rebut the Appellant's evidence.Mr. Eric Amarasinghe, P.C., on behalf of Amro replied that theabsence of such evidence was entirely because the first referenceto any such discussion and contract was made after the trialcommenced, and that there was neither pleading nor issue upon thatmatter. He contended that the contract sued upon, as pleaded andput in issue, was not a contract (whether of agency or otherwise)concluded by means of discussions directly between the Appellantand Amro, but a contract evidenced by the documents referred toat the commencement of this judgment, constituted by the acts ofthe Bank of Ceylon and Amro ; it was further pleaded that theseacts took place between 25.9.80 and 1.10.80 – long after thediscussions referred to by Mr. Kadirgamar and that acceptance was(not by telephonic communication to the Appellant), but by intimationto the Bank of Ceylon and by performance. This submission isundoubtedly entitled to succeed in view of the pleadings and issues.It was averred in the plaint that on or about 25.9.80 the Appellantconsigned a parcel of diamonds by air to Amro, for delivery to Schatz,in accordance with the Appellant's instructions, and that ;
SC Blue Diamonds Limited v. Amsterdam — Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando. J.)263
On or about 25.9.80 Amro accepted a collection order issuedby the Bank of Ceylon, and undertook for valuable consideration toact as agent of the Appellant and the Bank of Ceylon ; to have custodyof the parcel of diamonds until delivery to Schatz, and to deliver theparcel and shipping documents ; and to present the relative bill ofexchange for acceptance and/or payment to Schatz, in accordancewith the instructions of the Appellant and the Bank of Ceylon ; andto notify the Appellant in regard to delivery, honour or dishonour ofthe bill, and payment or failure of payment by Schatz ; and
Amro agreed to, undertook and accepted the performance ofthose obligations by intimating at Colombo to the Bank of Ceylonits acceptance, and by performance of the aforesaid instructions.
JURISDICTION
The Appellant pleaded that :
" 2. The Defendant is a corporate body duly incorporated andcarrying on business in Sri Lanka.
The Defendant is a company incorporated in Holland and isa Banking Company.
The Defendant has its established place of business in SriLanka at No. 90, Chatham Street, Colombo 1.
The Defendant has a registered office in Sri Lanka at No. 90,Chatham Street, Colombo 1.
The Defendant carries on a business of banking in Colomboand is deemed to be resident in Colombo within the jurisdictionof this Court.
The cause of action hereinafter set out arose at Colombo withinthe jurisdiction of this Court.
The contract herein sought to be enforced was made at Colombowithin the jurisdiction of this Court.
Amro answered these averments thus :
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" 1. This defendant denies all and singular the several avermentscontained in the plaint save and except such as are hereinafteradmitted.
Answering paragraphs 2, 3, 4, 5 and 6 of the plaint, thisdefendant states that it is a Bank duly incorporated in Hollandand presently carrying on business inter alia in Sri Lanka atits registered branch office at No. 90, Chatham Street, Colombo
The said branch office commenced business in Sri Lankaon 3rd December 1981 and was not functioning as on the dateand time set out in the plaint.
Answering paragraph 7 and 8 of the plaint, this defendantdenies that a cause of action has accrued to the plaintiff tosue this defendant, and further denies that there was anyagreement enforceable by the plaintiff against this defendantentered into at Colombo within the jurisdiction of this Court oranother.
Sufficiency of pleas of jurisdiction
Section 45, C.P.C, requires a statement of the facts setting outthe jurisdiction of the court to try and determine the claim ; thenecessary averments must appear in the body of the plaint in theform of distinct averments (Bisset v. Loftus (5), Sulaipian v. Ibrahim(6). Here jurisdiction based on cause of action and contract has beenduly pleaded. It is neither necessary nor customary to add a furtheraverment to the effect that accordingly the Court has jurisdictionto entertain, hear and determine the action. However, the plea asto residence in paragraph 6 is ambiguous. Section 9, C.P.C., confersjurisdiction on the District Court within whose jurisdiction thedefendant 0 resides " ; the Code does not define or specify circum-stances in which a defendant who does not actually " reside" is nevertheless 0 deemed * to reside. " Resides " has beeninterpreted in the case of a natural person, to refer to the place wherehe has his family establishment and home (Mendis v. Perera (7)),andas not including the place where he carries on business (Chetty v.Saibo <8>). If the same restricted meaning is given in relation toartificial persons, section 9 will be imperative in those cases. In thecase of corporate bodies, the Code elsewhere refers to a " registeredoffice " (section 471) ; it provides for service of summons at a “ place
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)265
of business “ (section 64 and 65). But section 9 does not includeeither of these expressions. In India, section 17 of the 1882 Code,and section 20 of the 1908 Code, provided that the place where adefendant was carrying on business would determine jurisdiction, andexplained that a corporation shall be deemed to carry on businessat the sole or principal office. The Civil Courts Commissionrecommended that a similar explanation be enacted (Sessional PaperNo. XXIV of 1955, Draft Code section 3 (1) (a)), but this has notbeen done despite numerous subsequent amendments to the Code.
Assuming that section 9 can be liberally interpreted to achievea similar result, the further question is whether a corporate body" resides " at every one of its places of business – so that if a residentof Colombo enters into a contract at the head office of a corporationin Colombo, performance being due in Colombo, a District Court 150miles away will also have jurisdiction if that corporation has a placeof business there. That problem becomes even more acute in thecase of a foreign corporation, which establishes a place of businessin Sri Lanka (and complies with the requirements of registration underPart XIII of the Companies Act, No. 17 of 1982) : does the fact thatsummons can validly be served at the address registered under PartXIII mean also that the corporation 0 resides “ at that address forthe purposes of section 9, C.P.C.? If so, can a corporation beserved in this country in respect of a contract which had no connectionwhatsoever with Sri Lanka ? Or only if some part of its superior ordirecting authority is in Sri Lanka ? Section 9 appears to needlegislative clarification. It is unnecessary for me to decide thesequestions, since I hold that the plea based on residence wasinsufficient. Paragraph 6 does not amount to an unequivocal assertionthat Amro " resides “ within jurisdiction ; the use of the word" deemed " suggests that Amro did not in fact reside withinthe jurisdiction (cf. Marimuttu v. Commissioner for Registration of I& P Residents ,9). That averment did not even state that Amro wasdeemed to be so resident for the purposes of section 9.Mr. Kadirgamar cited English decisions (Newby v. Von Oppen (10),Dunlop Company v. Actien-Geseiischaft (etc.) Vorm. Cudell andCompany(1,), Saccharin Corporation Ltd. v Chemische Fabrik vonHeyden Aktiengeseiischaft (,2) The “ Theodohos “ ,,3> holding thatin actions against foreign corporations, summons can validly beserved at a place of business, or on a principal officer, eventemporarily within the jurisdiction. The fact that such service of
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summons is proper does not mean that the test of jurisdiction setout in section 9 is satisfied.
Traversing Jurisdiction
I have next to consider whether the answer complies with therequirements of section 76, C.P.C. : " if the defendant intends todispute the averments in the plaint as to jurisdiction of the court, hemust do so by a separate and distinct plea, expressly traversingsuch averment." The general denial contained in paragraph 1 isinsufficient ; it is not " a separate and distinct " plea, nor does itexpressly deny jurisdiction. A proper plea of jurisdiction commonlyinvolves two assertions of fact: as to the place of residence, contractetc, and also that such place is within the local limits of the jurisdictionof the court. A general denial does not usually make it clear thatboth assertions are being denied : it may indicate, for example, thatalthough the defendant denies that he resides at the place specified,he does not deny that place is in fact within the jurisdiction of thecourt. The parties, and the court, must be able upon a reading ofthe pleadings to ascertain, without ambiguity, whether the jurisdictionof the court is disputed. Thus even a specific denial – e.g. " thedefendant denies the averments in paragraph 8 of the plaint" – wouldgenerally be insufficient, if this plea could not indicate whether thedefendant –
was denying that a contract had been entered into, and assertingthat even if there had been such a contract, it had not been enteredinto at Colombo ; or
was denying such a contract, but was conceding that if sucha contract was proved, it had been entered into at Colombo : or
While admitting that a contract has been entered into, wasdenying that it had been entered into at Colombo.
Section 76 requires a plea which could makes it plain from theinception what the defendant's case actually was, so that the plaintiffwould know what he was called upon to prove. In (1) above, theplaintiff would have to prove the contract, and that it had been enteredinto at Colombo ; in (2) he would only have to prove the contract,and not the place; in (3) proof would be necessary, not of the contract,
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)267
but only of the place of contract. In my view, what section 76 requiresby a plea traversing the averment of jurisdiction, is a specific denialof jurisdiction ; by a plea which, however construed, necessarilyinvolves a denial of jurisdiction. Odgers on Pleadings and Practice(Principles of Pleading and Practice 19th ed, p. 128) defines a” traverse " as –
" the express contradiction of an allegation of fact in anopponent's pleadings ; it is generally a contradiction in the veryterms of the allegation. It is as a rule, framed in the negativebecause the fact which it denies is, as a rule, alleged in theaffirmative."
Thus to deny that a cause of action has arisen, is not a traverseof jurisdiction ; but to deny that a cause of action has accrued atColombo within the jurisdiction of the court, is a sufficient traverseof jurisdiction, for that involves a denial of the accrual of a causeof action, and also of accrual within jurisdiction.
Mr. Kadirgamar cited the dictum in Le Mesurier v. Le MesurieP4*.
" I would express my doubts as to whether the mere inclusionof such objections [to jurisdiction], though in separate paragraphs,in what is called the answer of the defendant is a fulfilment ofthe requirements of [section 76], that it must be done by a separatedistinct plea. In itself the objection may often be one which it isall-essential to prefer and maintain, without any semblance ofwaiver, to the end, so that even the act of appointment of theproctor for the defence ought to be limited to this purpose lestan authorisation to do aught else should be construed as anacknowledgement of jurisdiction, and he be concluded by section73 of the Courts Ordinance. That section 76 does not direct orleave the dispute of the averment of the jurisdiction to be madein one of the duly numbered paragraphs of the answer which aredirected by section 75 (d), but in a 'plea' that is to be separateand distinct, which would fall to be first tried under section147."
He did not submit that a traverse of jurisdiction must be by aplea which is –
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separately numbered, and/or
isolated from other averments.
As far as I am aware, that has not been the practice, and theprinciple underlying section 76 does not require such a technical rule.It is clear that any such contention is not tenable, for even inthe case he relied, on the Privy Council upheld the objection tojurisdiction, despite this alleged infirmity in pleading to jurisdiction LeMesurier v. Le Mesurier(,s), Mr. Kadirgamar submitted that a proper" traverse “ requires an express averment to the effect that the courthas no jurisdiction to entertain the action. When it was pointed outto him that section 45 imposes no duty on the plaintiff to make apositive averment as to jurisdiction, and that, correspondingly, section76 ought not to be interpreted to cast a heavier burden on adefendant, his reply was that a plaintiffs plea of jurisdiction involvesan implied assertion that the court has jurisdiction, which thedefendant must expressly deny ; and that there could be no implieddenial of this implied assertion. Having regard to the purpose ofsections 45 and 76, and the meaning of " traverse ", I mustunhesitatingly reject this contention ; no particular formula isrequired, and a plea which ex facie and unambiguously involves adenial of jurisdiction would suffice. I
I therefore hold that the plaint adequately pleaded jurisdiction onthe basis of contract and cause of action, but not. of residence.Although the answer did not adequately deny jurisdiction on theground of residence, this does not amount to an admission ofjurisdiction, because the plaint was defective in that respect. Theanswer contained an adequate denial of jurisdiction on the basis ofthe place of contract, because it denies any agreement " enteredinto at Colombo within the jurisdiction of this court." In regard tojurisdiction based on the accrual of a cause of action, the answerdid not adequately traverse jurisdiction, because it contained only adenial of the accrual of such cause of action, and was silent as tojurisdiction ; the phrase “ within the jurisdiction of this court “paragraph 4 of the answer, qualifies only the second limb of thatparagraph, and not the first limb. That the District Court of Colombohad jurisdiction, on the basis that the alleged cause of action arosewithin its limits, was not denied, and had therefore to be treated asadmitted by Amro. I cannot accede to Mr. Amarasinghe's contention- or, rather, plea – that declining standards and lax practices in regard
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
CAmro Bank Case) (Fernando, J.)269
to pleadings should induce this Court to give a more “ lenient “interpretation to section 76. Condoning such laxity results in obscuringthe real issues for determination, and adds to the cost and delaysin litigation, and this is amply illustrated by this very case. Since thejurisdiction of the court (based on place of accrual of the cause ofaction) was admitted, it was unnecessary to consider whether theDistrict Court of Colombo had jurisdiction on the basis of residenceor place of contract. However, despite the absence of issues as tojurisdiction on those grounds, three courts have spent an inordinateamount of time in hearing arguments and determining questionsinvolving jurisdiction and submission to jurisdiction.
Submission to jurisdiction
The requirements of section 76 are reinforced by section 39 ofthe Judicature Act, No 2 of 1978:
“ Whenever any defendant or accused party shall have pleadedin any action, proceeding or matter brought in any Court of FirstInstance neither party shall afterwards be entitled to object to thejurisdiction of such court, but such court shall be taken and heldto have jurisdiction over such action, proceeding or matter."
It is settled that if the defendant fails to plead a latent want ofjurisdiction, at the first opportunity, he will not be permitted to takethat plea later." However, Mr. Kadirgamar made a more far-reachingsubmission : if having taken that plea, the defendant participates inthe trial on the merits, or on other issues besides jurisdiction, thenthere is a waiver of the objection to jurisdiction, or a submission tojurisdiction. He cited Harris v. Taylor (18), Duties v. Vidler (17), Henryv. Geoproso <'8>. For this reason too he contended that the courtsbelow could not have decided the question of jurisdiction against theAppellant. Since by its pleadings Amro must be taken to have admittedthat the cause of action arose within the jurisdiction, it is not strictlynecessary to consider this submission. However as it was arguedat length, I will shortly state my views thereon. The decisions citeddeal with situations where a judgement obtained in one country wassought to be enforced in another. It may well be that the principlecontended for by .Mr. Kadirgamar does apply in that situation. Weare faced with a situation without that foreign element. The rules ofprocedure for the trial of civil actions are inconsistent with any
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such principle. Section 147, C.P.C., does not permit an issue ofjurisdiction to be tried as a preliminary issue, unless two conditionsare satisfied : it must be an issue of law (and not of fact, or mixedfact and law), of such nature that the entire case may be disposedof on that issue only ; here the place of contract and of breach hadto be determined on evidence. Further if Mr. Kadirgamar's contentionis upheld, it would mean that a defendant who objects to jurisdictionmust stand or fall by that issue ; in order to get the court to decidethat issue, he must refrain from contesting the merits ; if ultimatelyhe fails on jurisdiction he will lose on the merits, without a contest.Litigation is already costly and protacted enough, without making ita gamble as well. That contention has therefore to be rejected asbeing totally inconsistent with practice as well as precedent. Thusin Le Mesurier, an objection to jurisdiction was upheld, after a trialwhich was contested on the merits without the faintest suggestionof a submission to jurisdiction. In Amaldo da Brescia, (1922) 23 N.L.R.391, a similar submission was rejected.
Burden of proof of jurisdiction and issues
Where jurisdiction is admitted, or deemed to be admitted, noquestion arises as to the burden of proof on the framing of issues.Where the defendant duly traverses jurisdiction, if the plaintiff failsto prove jurisdiction, his action will have to be dismissed ; section150, explanation 2, C.P.C. make's it clear that the plaintiff mustestablish so much of the material part of his case as ib not admittedby the defendant. Accordingly it is for the plaintiff to ensure that anappropriate issue is framed, so that he would be entitled to leadevidence. Where, however, the defendant while conceding jurisdictionin terms of section 9, pleads other matters depriving the court ofjurisdiction (e.g. that the Conciliation Board Act was in operation inan area, precluding the institution of action without the certificate ofthe Board) : Gunawardene v. Jayawardane (10), the burden is on thedefendant to raise the necessary issue and to prove the relevantfacts. In the present case, residence was not duly pleaded as thebasis of jurisdiction ; there was in any event no proper traverse ;and there was no issue. Hence neither of the courts below couldproperly have considered that question. Jurisdiction on the basis ofthe accrual of the cause of action was admitted ; there was no issueon that question ; neither court should have embarked on an inquiryinto that matter ; in view of the admission and the absence of an
SC Blue Diamonds Limited v. Amsterdam – Rotterdam Bank M. V. and Another
(Amro Bank Case) (Fernando, J.)271
issue, the court was not deprived of jurisdiction even though itsubsequently transpired that the alleged cause of action arose inAmsterdam. Although the burden on the issue of jurisdiction basedon the place of contract lay on the Appellant, that issue was raisedby Amro, the defendant ; it was correctly held that the contracthad been entered into in Amsterdam, and hence not within thejurisdiction of the District Court of Colombo, yet that did not deprivethat court of jurisdiction, because it had jurisdiction on another basis- namely, the accrual of the cause of action. A similar situation arosein Perera v. Chelliah(21). Since jurisdiction on one basis was admitted,challenging jurisdiction of a different basis was a futile exercise.
THE MERITS
Mr. Kadirgamar cited a long series of decisions, of high authority,for the proposition that Amro was obliged to carry out its instructionsstrictly, and was not entitled to look into questions of adjustment,settlement, or payment, as between buyer and seller: Rayner & Co.,Ltd. v. Hambro's Bank, Ltd., (22) Bank Melle Iran v. Barclays Bank(23), Midland Bank v. Seymour(24), Edward Owen Ltd. v. Barclays BankLtd.(23t, Richardson Scale Co. Ltd. v. Polimex Cekop(26), Siporex Tradev. Banque Indosuez (27>, United City v. Royal Bank (28).
Undoubtedly the Appellants instructions to Amro were that theparcel of diamonds should be delivered to Schatz, only upon obtaininga trust receipt for 180 days, and upon acceptance of a bill of exchangepayable 180 days after sight. This was not part of some theoreticalor academic exercise to test the precision with which a bankerconformed to instructions, but rather to give effect to a commercialtransaction between seller and buyer – where a seller desired aneffective assurance of payment, subject to agreed credit terms, beforethe goods were delivered to the buyer. The Appellant seeks to treattwo matters as constituting breaches of instructions : that a reducedprice had been accepted from the buyer, and that the specifieddocuments had not been obtained. The fact that Amro, as a banker,obtained immediate payment from the buyer and remitted it to theseller cannot per se be regarded as a breach. Receiving the purchaseprice 180 days before it was due, without any discount, was favourableto the seller. No businessman or exporter would complain. A courtwhich held that this was a breach would be acting contrary to the
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interests of the parties. Indeed the evidence of the Appellant’s directorwas that the agreement with Amro was to send diamonds throughAmro and for them to obtain payment or the documents, failing whichthe diamonds should be returned. Hence the only question is whetherAmro had acted correctly in accepting US $ 41,892/71 instead ofUS $ 50,742/95. I am unable to treat the instructions given in thecourse of a business transaction as being necessarily unalterable;adjustments, variations, negotiations and compromises are aninevitable and continuing part of business transactions. Here thedocumentary evidence establishes that the parties agreed to newterms : reduced price and immediate payment. Immediate paymentnecessitated the cancellation of the prior instructions regarding thetrust receipt and the bill of exchange ; the Appellant's telex P14required Schatz to communicate the new instructions to Amro, andAmro's telex P4 to the Appellant confirmed such communication ;the need to cancel the inchoate bills of exchange was referredto ; the conduct of the Appellant is consistent with acquiescenceif not acceptance. Thus the instructions originally given wereeffectively varied. Amro substantially complied with the newinstructions. The Appellant's telex P14 indicates that the revision ofprices was being considered prior to 9.10.80, and some adjustmenthad been agreed to and recorded on the invoice relating to theprevious contract. There is no evidence as to the date of deliveryof the parcel ; if delivery was after the instructions had been variedAmro was clearly not in breach. If delivery was before, Amro wastechnically in breach, but not only did this cause ncr loss, but theAppellant ratified and adopted Amro's conduct, by agreeing to acceptimmediate payment without the documents, with knowledge (from thetelex P4) that Amro had not presented the bill of exchange foracceptance.
The documents do not support the existence of any agreementregarding the sharing of profits on re-sale of the various parcels ofdiamonds. Exchange Control authorisation for such transactions havenot been produced. There was some oral evidence to the effect thatthe telexes were in a business code, and that " revised " values" invoice prices " and " prices " referred to amended re-sale prices,but particulars of the code were not disclosed. Everything inthe telexes, other than the word " melle ' is perfectly plain andsimple ; it stretches one's credulity to assume a code the effect ofwhich was only to substitute " re-sale prices " in place of the several
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(Amro Bank Case) (Fernando, J.)273
expressions actually used. A court cannot be called upon to departfrom the plain meaning of a document upon an assertion that it meantsomething else in an undisclosed secret code. There are otherreasons why this story of a profit-sharing arguement cannot beaccepted. If there had been such an agreement to which the telexesP13 and P14 applied, the telex P4 should have evoked a promptresponse not to cancel the drafts, as the drafts related to the sale,and not the resale ; there was no need to inform Amro, becauseAmro was not involved in that transaction ; and it is most unlikelythat payments would have been made, both prior to P13 and P14and immediatly thereafter, in respect of re-sale profits, without firstpaying the purchases price. I have no hesitation in rejecting there-sale profit version.
Mr. Kadirgamar submitted that the Appellant was at least entitledto nominal damages for breach. The Appellant refrained fromproducing its books of accounts, but there is nothing to support thesubmission that the various amounts due and the payments madecould not be properly indentified. The documents produced(particularly the telexes) clearly show the original and the revisedprices, and the payments made, and it is obvious that the Appellantsuffered no loss whatsoever ; in fact it received US $ 1,000 morethan it was entitled to. It would be a travesty of justice to awardthe Appellant any damages whatsoever.
For these reasons, I hold that the District Court of Colombo hadjurisdiction, but the Appellant has failed to establish any cause ofaction. I dismiss the appeal with costs in a sum of Rs. 10,000.
BANDARANAYAKE, J. – I agree.
DHEERARATNE, J. – I agree.
appeal dismissed.