Automated Summary
Key Facts
The plaintiff, Hua Sun, entered a share purchase agreement with defendants Dr. Ashraf Elmasry and Elena Kozlova in 2011 to acquire 100 shares in a company owning a leasehold interest in Seychelles. The Government of Seychelles acquired the leasehold interest on 11 February 2013, rendering the agreement unfulfillable. The plaintiff paid $1,830,398, received $1,169,970 back, and sought the remaining $660,428 plus interest and moral damages. The court ruled the agreement was terminated due to government action, ordering defendants to refund $660,428 with 4% interest from 16 January 2014 and awarding SR100,000 in moral damages. Defendants' counterclaims for $400,000 and SR5,440,500 were dismissed.
Transaction Type
Share Purchase Agreement
Issues
- The court assessed the plaintiff's claim for moral damages (SR200,000/-) arising from the defendants' persistent refusal to refund the remaining balance after the Agreement's termination, ultimately awarding SR100,000/- as a reasonable sum for the prejudice caused.
- The court determined whether the Share Purchase Agreement between the plaintiff and defendants was terminated because the Government of Seychelles acquired the leasehold interest (rendering the Agreement unfulfillable) and whether the defendants are jointly and severally liable to refund the remaining $660,428/- paid by the plaintiff under the Agreement.
- The court evaluated the defendants' counterclaim alleging the plaintiff forfeited 20% of the contract price ($400,000/-) for breach of contract and owed SR5,440,500/- in indemnity for occupying the land. Both claims were dismissed as the court concluded the plaintiff did not breach the Agreement.
Holdings
- The court awarded the plaintiff moral damages of SR100,000/- (reduced from SR200,000/- as claimed) with 4% interest from the date of judgment, citing credible evidence of emotional distress caused by the defendants' failure to return funds.
- The court concluded that the plaintiff did not breach the Agreement, the Agreement was terminated due to the Government of Seychelles' acquisition of the leasehold interest, and the defendants are liable to refund the remaining balance of $660,428/- to the plaintiff with interest at 4% from 16 January 2014.
- The court dismissed the defendants' counterclaim, rejecting their contention that the plaintiff forfeited $400,000/- and was liable for SR5,440,500/- in indemnity for land occupation, as the plaintiff was found not to have breached the Agreement.
Remedies
- The counter claim is dismissed. The plaintiff is awarded costs in favour, with the counterclaim dismissed and no liability for the defendants' claims of $400,000/- and SR5,440,500/-.
- The defendants shall jointly and/or severally pay the sum of $660,428/- with interest at the legal rate of four percent from 16 January 2014 until the day of payment of the entire sum of $660,428/-.
- The defendants shall jointly and/or severally pay moral damage to the plaintiff in the sum of 100,000/- rupees plus interest at the rate of 4 percent thereon, from the date of judgment (29 May 2019) until payment of the entire sum of 100,000/- rupees.
Contract Value
2000000.00
Monetary Damages
660428.00
Legal Principles
The court applied the principle of good faith under Article 1134 of the Civil Code of Seychelles Act to interpret the termination clause of the share purchase agreement. It emphasized the true intention of the parties to terminate the agreement when completion became impossible due to the government's acquisition of the leasehold interest, despite the defendants' contradictory pleadings.
Key Disputed Contract Clauses
- Clause 4 provided for a 20% forfeiture of the contract price ($400,000/-) if the plaintiff failed to pay the full amount by the deadlines. The defendants claimed this clause applied due to alleged non-payment, but the court rejected their argument, finding no breach by the plaintiff and dismissing the forfeiture claim as inconsistent with the parties' mutual understanding and documentary evidence.
- Clause 6 of the Agreement stipulated that if completion (payment and share transfer) was not achieved by 30 June 2012 (original deadline) or 31 December 2012 (extended deadline), the agreement would terminate, and the purchase price would be refunded. The court analyzed this clause to determine whether the termination was due to the plaintiff's breach or the Government of Seychelles' acquisition of the leasehold interest, ultimately ruling the latter was the valid reason.
Cited Statute
- Acquisition of Land in the Public Interest Act
- Town and Country Planning Act
- Civil Code of Seychelles Act
Judge Name
F. Robinson
Passage Text
- the counter claim is dismissed.
- the defendants shall jointly and/or severally pay moral damage to the plaintiff in the sum of 100,000/- rupees plus interest at the rate of 4 percent thereon, from the date of judgment until payment of the entire sum of 100,000/- rupees.
- the defendants shall jointly and/or severally pay the sum of $660,428/- with interest at the legal rate of four percent from the 16 January 2014, until the day of payment of the entire sum of $660,428/-.
Damages / Relief Type
- Defendants to pay USD 660,428 plus 4% interest from 16 Jan 2014.
- Moral damages of SR100,000 plus 4% interest from judgment date.
- Counterclaim dismissed with costs to the plaintiff.