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[No.113]
February 20,
2005 |
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International Legal
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Cases
Source:
Westlawinternational.com
A buy-or-sell
agreement between shareholders of a corporation required that the price be
stated in money terms that would be equal to either party and precluded
nonmonetary terms. Thus, the first shareholder's offer that triggered the
buy-or-sell process was not enforceable, inasmuch as it included nonmonetary
terms that required the second shareholder, in addition to buying the first
shareholder's shares, to assume the first shareholder's liabilities and
guarantees.
Harris v. Ahtna,
Inc.
A board chairman
established a clear and substantial likelihood of showing that he was entitled
to defense costs under New York law prior to the adjudication of the rescission
issues, and therefore was entitled to preliminary injunction requiring insurer
to honor an excess directors and officers liability policy that it issued and to
advance immediately the costs of defending chairman against federal securities
law claims filed in a host of lawsuits arising from the collapse of his company.
The failure to receive defense costs when they were incurred constituted
irreparable harm.
In re WorldCom, Inc.
Securities Litigation
A board chairman
established a clear and substantial likelihood of showing that he was entitled
to defense costs under New York law prior to the adjudication of the rescission
issues, and therefore was entitled to preliminary injunction requiring insurer
to honor an excess directors and officers liability policy that it issued and to
advance immediately the costs of defending chairman against federal securities
law claims filed in a host of lawsuits arising from the collapse of his company.
The failure to receive defense costs when they were incurred constituted
irreparable harm.
In re WorldCom, Inc.
Securities Litigation
An award of $150,000
under Pennsylvania bad faith insurance statute approached, but did not exceed,
the limit of substantive due process, when considering a one to one ratio of
punitive damages to attorney fees and costs awarded, although compensatory
damages were only $2,000. The insurance claim had been settled and paid, albeit
unacceptably late, prior to trial, attorney fees and costs were
"compensatory damages" for purposes of the due process ratio, the
$2,000 award related to only one aspect of insurer's bad faith conduct and was
not indicative of the sum of insurer's culpability, and Pennsylvania's bad faith
statute provided the insured with a means of redressing unreasonable delay by
the insurer.
Willow Inn, Inc. v.
Public Service Mut. Ins. Co.
A wholesaler's
independently created "karaoke music" sound recordings were derivative
of their underlying musical compositions. Thus, they were not entitled to
copyright protection absent licenses from the owners of the copyrights in the
underlying compositions.
Palladium Music,
Inc. v. Eatsleepmusic, Inc.
Viewed in context, a
juvenile student's statement to his teacher, "Yell at me again and see what
happens," constituted a threat to inflict unlawful injury. Thus, the trial
court's sustaining a wardship petition based on such statement, as violating the
statute prohibiting threats against public officers and employees, did not
violate the student's free speech rights. The student tilted back his head, took
a step toward the teacher, and apparently clenched his fists. The student did
not deny a threat when questioned by the teacher during the incident. The
teacher felt the student was very upset and was serious about what he was
saying, and also feared for his safety.
In re Ernesto H.
A psychologist did
not have a duty to warn a patient's ex-husband that her patient could not commit
to a marriage, for purposes of ex-husband's professional negligence claim
against psychologist. The patient did not communicate a specific and immediate
threat of serious bodily injury against the ex-husband, and the ex-husband's
alleged mental injury and hurt from dissolution of his marriage did not result
in any duty to warn owed to him by the psychologist.
Swisher v. Pitz
The funds in a
separate account from which an authorized delegate transferred proceeds from its
sale of money orders to a licensed money transmitter were trust funds owned by
and belonging to the transmitter, under the New Jersey Money Transmitters Act,
until the proceeds were paid to the transmitter. Under the Act, the trust nature
of the proceeds did not change even though they had been commingled with the
delegate's other receipts. As a result, the account funds were not subject to
seizure by the delegate's bank to satisfy the delegate's debt to the bank.
Merchants Express
Money Order Co. v. Sun Nat. Bank
Evidence established
that magazine publishers, and not the national distributors, determined the
prices and discounts at which the magazines would be sold to the wholesalers,
and therefore the distributors could not be held liable under the Robinson-Patman
Act for alleged discriminatory pricing. However, even if magazine return
policies set by the national distributors could be viewed as part of a service,
discrimination with respect to the return policies was actionable under
Robinson-Patman Act since such service was dominated by the sale of magazines.
United Magazines Co.
v. Murdoch Magazines Distribution, Inc.
Under Wisconsin law,
a workers' compensation claimant who sustained a knee injury while playing
softball during a paid break period was entitled to benefits. The claimant's
activity was a momentary and insubstantial departure from his duties.
Furthermore, the employees had been playing softball on the employer's premises
for some time. This was an issue of first impression.
E.C. Styberg
Engineering Co., Inc. v. Labor and Industry Review Com'n
News
A New York court has
declared a law banning same sex marriages violative of the state constitution.
It was held that marriage as an institution as it stands today, is meant to
promote stability, it not only confers financial stability and legal benefits,
it was a public proclamation of commitment to another person and historical
exclusion was no justification. It was observed that the relationship of the
plaintiffs fit in the definition of marriage as it stands today, same sex
couples were entitled to the same fundamental rights as opposite sex couples and
their relationship could not be said to be harming others, allowing same sex
marriages does not require that religious institutions change their tenets, nor
their definition of marriage under their faith. Moreover, such religious
considerations cannot legally be the basis upon which to curtail the
constitutional rights of plaintiffs.
A high court order
reversed a verdict awarding costs of oyster farmers $21,345 an acre, the costs
had been awarded by a jury to oystermen who claim a freshwater diversion project
wrecked the underwater reefs they lease from the state for $2 an acre a year,
the court remarked that If the court had allowed the verdict to stand, the 130
farmers would have collected an award worth more than the total value of all
oysters harvested in Louisiana in the past 100 years. "We recognize the
vitality and importance of the oyster industry to the state and nation, and for
the long-term benefit of the industry we must continue our aggressive pursuit to
save our coast and the estuaries which nurture this industry," Gov.
Kathleen Blanco said in response to the ruling. Oyster farmers have called the
ruling unfair, unjust and uncalled for. The litigation is the result of The
Caernarvon project, allows fresh water and sediment from the Mississippi River
to flow into the salty waters of Breton Sound south of New Orleans, too much
fresh water kills oysters.
A painting made in 1889, was
bought by actress Ms Taylor at auction in 1963. The descendents of a Jewish woman who fled Nazi Germany, sought its return under the US
Holocaust Victims Redress Act. But a judge ruled that state law says legal
action must be filed within three years of property being taken. The painting,
titled View of the Asylum and Chapel at Saint-Remy, was originally bought at
Sotheby's auction house in London for $257,000 (£138,362). It now hangs in Liz
Taylor's Los Angeles home and is thought to be worth about $15m (£8m). South African and Canadian descendants
of the original owner filed a suit in
October 2004, claiming the work had been confiscated from her by the Nazis and
should be returned under the 1998 Holocaust Act. Liz Taylor then filed a
counter-suit,
claiming to be the rightful owner of the painting, and stated it had passed
through two other galleries and another collector - who had also fled Nazi
Germany - before it had come into her possession. The plaintiffs claim Ms Taylor must have known that the painting had been taken by Nazi
officials when she bought it.
The Kyoto Protocol
came into force from the 16th of February, the protocol aims at checking
global warming, countries representing 55% of greenhouse emissions globally were
required to ratify the treaty before it came into effect. The protocol comes into
effect 90 days after Russia ratified the treaty in November last year. Before becoming
effective, the protocol, which aims to slow global warming by cutting greenhouse
gas emissions, required countries representing 55% of global greenhouse gas
emissions to ratify the treaty. The US and Australia, citing economic reasons,
are not parties to the treaty. 141 countries have so far ratified the treaty,
the countries have pledged to cut emissions by 5.2% by 2012. Growing developing
countries China and India are outside the framework
A study has revealed
that over two hundred and fifty deaths have occurred in Texas in the year 2002
itself, due to exposure to asbestos. Exposure increases the risk of Mesothelioma,
a rare cancer of the thin membranes lining the abdominal cavity and surrounding
internal organs, and other asbestos-related diseases. In the first week of
February, a grand jury had indicted an asbestos producer ‘W.R. Grace’ of
releasing asbestos dust and concealing critical studies from the government. It
is estimated that at least 670,000 tons of W.R. Grace asbestos from Montana was
shipped to Texas between 1963 and 1992. From 1979 through 2002, at least 2,910
Texans died from just two forms of asbestos disease, placing Texas fifth in the
nation for asbestos mortality during that time.
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CBDT |
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Notification No.
45/2005 Dated 09.02.2005: The CBDT has further amended the Income-tax Rules,
1962 vide this notification. With these amendments, a new sub-rule 2BBA has been
added, which states the circumstances of death of a member of the armed forces
(including para-militray forces) of the Union in the course of operational
duties, for the purposes of clause (19) of section 10.
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| DGFT
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Policy Circular No.
18/2004-2009 Dated 11.02.2005: The DGFT, has clarified over minimum value
addition norms, and method of calculation for the same, in relation to studded
gold/silver/platinum jewellery items. As per the circular, these items fall
under Para 4.56.1(a) of Handbook or Procedures Volume I (2004-09), and
accordingly the minimum value addition required for them has to be 15%. And, for
the purpose of calculating the value addition, it says, Para 4.68 of the
Handbook of Procedures Volume I (2004-09), has to be referred.
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| PIB
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Dated 16.02.2005:
The Protocol, which has come into force now, requires the industrialized
countries to reduce their emissions of carbon dioxide and other greenhouse gases
(GHGs), which are changing global climate patterns. India, however, is not
required to reduce emission of Green House Gases (GHG) and those are basically
the developed countries, which are required to reduce emissions of GHG by an
average of 5.2 per cent below 1990 level by 2012, under the Protocol.
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RBI |
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Circular No.
A.P.(DIR Series) Circular No.32 Dated 09.02.2005: With a view of further
liberalising overseas investment, the RBI has now been decided that even in
cases where the foreign company offering its shares under ESOP and has an
indirect shareholding in the Indian company, that is, through a Special Purpose
Vehicle or a step down subsidiary, no prior permission of the bank is required,
as long as such holding is not less than 51 per cent.
Notification No.
GSR61(E) Dated 20.01.2005: Further amending the Foreign Exchange Management
(Guarantees) Regulations, 2000, the RBI has brought forward the Foreign Exchange
Management (Guarantees) (Amendment) Regulations, 2005. With these amendments
coming to effect, an ‘Authorised Dealer’ would be able to give guarantee,
Letter of Undertaking or Letter of Comfort in respect of any debt, obligation or
other liability incurred by a person resident in India and owed to a person
resident outside India, for import of goods.
Notification No.
GSR60(E) Dated 05.01.2005: The RBI has further amended the Foreign Exchange
Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000, and
brought to fore the Foreign Exchange Management (Borrowing or Lending in Foreign
Exchange) (Amendment) Regulations, 2005. These amendments relate to relevant
conditions as to when an authorised dealer in India may borrow in foreign
currency.
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| Ministry of Finance
and Company Affairs - Service Tax |
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Notification No.
2/2005 Dated 14.02.2005: The Central Government, vide this notification, has
made further amendments to the Service Tax Rules, 1994. These amendments relate
to the last date for making an application for registration, in case of a person
liable for paying the service tax, in lieu of taxable services referred to in
sub-clause (zzp) of clause (105) of section 65 of the Finance Act, 1994 (32 of
1994).
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| Ministry of
Agriculture |
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Notification No.
SO203(E) Dated 14.02.2005: The Central Government, vide this notification, has
made the Plant Quarantine (Regulation of Import into India) (Amendment) Order,
2005, further to amend the Plant Quarantine (Regulation of Import into India)
Order, 2003, adding a proviso in Clause 5 of this order, in respect of imports
of plants and planting materials from Nepal, in view of the provisions of the
Indo-Nepal Trade Treaty.
Notification No.
SO175(E) Dated 07.02.2005: In view of the reported outbreak of Highly Pathogenic
Avian Influenza (Fowl Plague), the Central Government has prohibited import of
certain livestock and livestock products, into India. These include domestic and
wild birds, live pig and pig meat products and meat and meat products from avian
species.
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| Ministry of Consumer Affairs,
Food and Public Distribution |
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Notification No.
GSR65(E) Dated 11.02.2005: The Executive Committee of the Bureau of Indian
Standards has made the Bureau of Indian Standards (Certification) (Amendment)
Regulations, 2005, further to amend Form I annexed to the Bureau of Indian
Standards (Certification) Regulations, 1988. This Form I is used for the purpose
of making an application for licence to use the standard mark, under Product
Certification Scheme of the Bureau of Indian Standards.
Notification No.
GSR67(E) Dated 11.02.2005: Vide this notification, the Central Government has
clarified over the issue of salary, allowances and other perquisites to be
available to the President of the National Commission, shall be the same as that
of a sitting Judge of the Supreme Court. Further, for other members appointed on
whole-time basis, shall receive a consolidated honorarium of fifteen thousand
rupees per month.
Notification No.
GSR64(E) Dated 10.02.2005: The Central Government, vide this notification, has
further amended the Consumer Protection Rules, 1987, to bring to the fore the
Consumer Protection (Second Amendment) Rules, 2005. These amendments relate to
revision of fee to be payable to District Forums or State Commissions or
National Commission, for making complaints therein, unless the complainant is
not Below Poverty Line.
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| SEBI |
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Circular No. MRD/DoP/SE/Cir-5/2005
Dated 09.02.2005: As a matter of better governance of the Stock Exchanges, the
SEBI has made it mandatory that members of Stock Exchange who were on the
Governing Board of the Stock Exchange at the time of its supercession, need to
be excluded from the reconstituted Governing Board of the Stock Exchange for a
period of two years, presuming that they failed to take effective action during
their tenure on the Governing Board.
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| Supreme
Court |
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Having failed to
clear the arrears of Tax for previous years, issuance of forms to certain
dealers was withheld by
the sales tax authorities, the Delhi High Court directed the appellants herein
to issue the forms without insisting on deposit of arrears of sales tax
allegedly due and payable. The Apex Court, reversed the said order, it was held
that, equity plays only a minuscule role in fiscal matters The dealer who has
chosen to trust the other dealer must suffer for his mercantile recklessness,
where ST 1 forms have not been deposited tax must be paid, notification amending
rules making pre deposit of arrears was held to be valid. It was held that the
purpose of taxing statute is not just to fix liability but also to recover the
liabilities which are so fixed, administrator may make rules for carrying out
the purposes of the Act.
The workman had been
dismissed from service as he had been found sleeping in the workplace, Labour
Court decided the dispute in favour of the workman, with a finding that the
inquiry had been unduly harsh and sentence was disproportionate, a single judge
bench of the High Court upheld the order, however it was reversed by a division
bench. The employer challenged the said order before the Apex Court on the
ground that the concerned workman prevaricated his stand from court to court, he
failed to turn up for the domestic enquiry despite several opportunities, this
was a case of proved misconduct and the question of victimization did not arise.
It was held by this
Court that in view of the past record of the workman and absence of material to
prove as to why the dismissal was disproportionate, the judgment of the High
Court was unsustainable, moreover no plea of legal victimization was taken in
the complaint petition. It was observed that, a proved misconduct is anti thesis
of victimization in industrial relations, the court opined that there was no
cogent reason for taking a lenient view, an offence of this nature needed to be
curbed.
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| High Courts |
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Bombay
Applicants herein
filed a suit for a declaration that a firm was partnership firm not a
proprietary concern of the respondents and for rendition of accounts, share in
profits. The firm was registered only after institution of the suit and an
application for leave to withdraw the suit and file a fresh suit filed on behalf
of the plaintiff was dismissed. This order was challenged by the plaintiff on
the ground that transactions/contracts entered into by a firm are not bad in law
just because a firm is unregistered, subject to law of limitation suit could
have been withdrawn. The Nagpur bench of Bombay High Court allowed the revision,
the defendants were directed to raise any objections they had, pertaining to non
registration in the fresh suit.
Delhi
Tata Infotech is a
company in which the plaintiff is a majority shareholder, it is a leading player
in the field of information technology, it is involved in software education,
software consulting, offshore software developments and the like. Among other
domain names, it was owner `tatainfotech.com', however there was delay of a few
days in renewal. Defendant misappropriated the domain name and snapped it up,
they started running a site with same domain name dealing in gambling and other nefarious
activities which were harmful to the corporate image of the plaintiffs. Delhi
High Court held that principles of passing off would fully apply to an
infringement of a domain name. Action would be available to the owner of a
distinctive domain name. The fact that many consumers searching for a particular
site are likely, in the first place, to try and guess its domain name has
further enhanced this value
Karnataka
Petitioner was
selected for the post of Director in the Department of Physical Education with
the respondent university, after completion of the probationary period he was served with a
notice of termination, on the premise that he did not possess the required
qualifications for the post, thereafter, his appointment was annulled. Petitioner
challenged the order of annulment on the ground that it was violative of the
principles of natural justice it was also contended that he was he qualified on
the date of joining. Karnataka High Court allowed the petition, it was held that
even in the absence of any provision in the statute requiring the party to be
heard common law would supply omission of legislature, order passed by the
government did not meet the requirements of natural justice.
Kerala
Directions for
reinstating a worker with back wages were issued by tribunal to the employer.
Disposing of a writ petition challenging the tribunals order, the Kerala High
Court held that, the appellant was not involved in any sovereign function of
state and thus was covered in the definition ‘industry’, although she was
employed as a daily rated worker she had been appointed as a regular worker and
not for any extra need, since the need continued after termination of her
services, her services could not have been terminated without complying with the
provisions of section 25-F of the Industrial Disputes Act, 1947, however it was
clarified that regularisation of the services of the petitioner was upto the
department.
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