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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Giad Hamdo Pipes Complex Company Ltd v. Wilson Byard Ltd & Anor [2003] ScotCS 348 (30 December 2003) URL: http://www.bailii.org/scot/cases/ScotCS/2003/348.html Cite as: [2003] ScotCS 348

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1. In this petition for interdict the petitioner is Giad Hamdo Pipes Complex Company Limited. It is a company incorporated under the laws of the Republic of Sudan. It has its registered office at Giad Industrial City, Khartoum. It trades as a manufacturer of pipes. The first respondent is Wilson Byard Limited, a company incorporated under the Companies Acts which has its registered office at 1 Royal Terrace, Edinburgh. It is a supplier of pipe manufacturing and processing equipment. The first respondent is in receivership. The second respondent, otherwise "the Receiver", is Mr Tom Maclennan of Tenon Group, the receiver appointed to the first respondent by the Bank of Scotland on 6 June 2003. Byard Limited ("Byard") is a new company incorporated on 6 June 2003. At all material times it has acted as the agent of the first and the second respondents.
2. It is the contention of the petitioner that, on 22 October 2003, a contract was concluded between the petitioner and Byard, acting on behalf of the first and the second respondents, for the sale of used Selmers 3 Layer PE Plant ("the Plant") by the first and the second respondents to the petitioner at a price of $780,000. The petitioner founds on a document entitled "Minute of Agreement between GIAD Hamdo Pipes and Byard Ltd for the supply of used Selmer's 3 Layer PE Plant (External)" ("the Minute of Agreement"), a copy of which is number 6/1 of process. The Plant is used in the manufacture of pipes. It is the intention of the petitioner that the Plant should be installed in a factory in Sudan. The first and the second respondents dispute that they have contracted to sell the Plant to the petitioner. Their primary position is that while they accept that there were negotiations between the parties with a view to the petitioner purchasing the Plant from the respondents, no contract was in fact concluded. On 21 November 2003 the first and the second respondents concluded a contract for the sale of the Plant to SPINDO, an Indonesian company.
3. The petitioner seeks to interdict the second respondent from procuring or suffering the first respondent and the first respondent from doing any act or thing with the Plant save by holding the same pursuant to and for the purposes of what it alleges to be the contract between the parties.
4. The matter came before me on the petitioner's motion for interim interdict in terms of the prayer of the petition and the respondents' motion to ordain the petitioner to sist a mandatory by Wednesday 24 December 2003 and meantime to sist the petition. Mr Francis, Advocate, appeared for the petitioner. Mr Sellar QC appeared for the first and second respondents. I heard the motions at a hearing on 19 December 2003 which was continued until 22 December 2003 in order to allow the conclusion of argument. I continued consideration of the matter until 30 December 2003. At the continued hearing on 22 December 2003 Mr Sellar provided a draft of what he proposed should be the answers for the respondents, once an order for answers was made.

Relevant personnel

5. As appeared from the petition and draft answers, a number of persons were involved in the negotiations and other dealings between the parties. All are recorded, in the Minute of Agreement, 6/1 of process, as having present at the meeting in London on 22 October 2003 when, according to the petitioner, a contract of sale was concluded. These persons are: Hamdo Abdulkarim, a director and the chairman of the petitioner; Amer Alkayed, Hamdo Abdulkarim's agent (and so an agent of the petitioner), resident in Dublin; Sami Elemara, an intermediary or broker, who is addressed in e-mails as "tmc" and who had played some part in bringing parties together but whose precise status is unclear; Graham Wilson, a director of the first respondent and of Byard; Stewart Paterson, a director of Byard; and Graham Hislop, also a director of Byard. Two further persons, Amin Mohammed Ahmed, and B Elagab, are recorded as having been at the meeting on 22 October but, unless they are the petitioner's two technical experts whose names are rendered rather differently in the petition, no mention is made of them in the petition or answers.

History

6. In brief summary the facts and circumstances, as represented by counsel under reference to the petition, draft answers and productions, appear to be as follows. While much is formally admitted in the draft answers, which are in full terms, in some particulars I have proceeded upon the terms of documents or the ex parte statements of counsel. The narrative, therefore, should not be taken as having been proved or admitted in every respect. Nor should it be regarded as necessarily comprehensive. It is, however, the basis upon which I have considered the applications before me.
7. Following e-mail correspondence between representatives of Byard on the one hand and Sami Elemara on the other hand, representatives of the petitioner and representatives of Byard met at the first respondent's premises at Livingston on 16 October 2003. They discussed the purchase of the Plant by the petitioner. On 16 October 2003 a paper was prepared by Mr Wilson "to summarise the discussions and outline the key issues, which both Byard and GIAD need to agree upon". This paper was headed "Outline Agreement". It is produced as 6/18 of process. Mr Wilson provided a copy to Hamdo Abdulkarim on 16 October. The petitioner accepts that 6/18 does not have contractual effect. There were further meetings between the parties' representatives. They met in London on 21 October and reconvened, again in London, on 22 October. A revised version of 6/18 was sent by Mr Wilson by e-

mail on 21 October (a copy of that e-mail is 6/6 of process, page 23; the revised Outline Agreement is 6/6 of process pages 23 to 28). The subject of the e-mail 6/6 page 23 is "Proposed Basis of Agreement between GIAD Hamido Pipes and BYARD Limited". At the meeting on 21 October Mr Paterson handed to the petitioner's representatives a draft Sale and Purchase Agreement (referred to in the answers as "the draft Agreement"), a copy of which is lodged as 7/6 of process. The draft Agreement is quite brief, extending to only five pages not including the witness schedule, the specification of the Plant and the spare-parts list. However, I agree with Mr Sellar that it has the appearance of what might be expected in a formal agreement for the sale and purchase of plant or equipment. At the reconvened meeting on 22 October the representatives of Byard produced the Minute of Agreement, 6/1. It was signed on behalf of the petitioner by Hamdo Abdulkarim and Amer Alkayed. It was signed for Byard ("on behalf of Tenon Recovery") by Mr Paterson and Mr Wilson. Under the heading "Spare Parts List" the Minute of Agreement refers to "the attached schedule". No schedule was in fact attached. Under the heading "Legal Documents" there appears: "A legal document will be drawn up over the next 5 days to formalise this Agreement." Under the heading "Payment Terms" there appears: "Confirmed Irrevocable Letter of Credit US$780,000 (Raised on Major Bank) Payable: US$350,000 On presentation of Pro-forma Invoice US$255,000 72 days after shipment and presentation of Shipping Documents US$170,000 On completion of 12 weeks supervision."

8. Following 22 October the parties' representatives continued to correspond by e-mail. The respondents aver that there were also telephone calls between them discussing the need for a final agreement and the provision of a letter of credit within 7 days, as referred to in the draft Agreement, 7/6 of process. The terms of the e-mail of 27 October from Mr Wilson to Sami Elemara, 7/7 of process, do not suggest that Mr Wilson considered that parties were bound to a contract of purchase and sale. It includes the paragraph: "You need to stress to [Amer Alkayed] that until the [letter of credit] is in our hands we cannot work on the plant or prepare it for shipment. Also whilst we are not actively trying to sell it we have not put the 'sold' sticker on the bumper and will continue to offer the plant until the [letter of credit] (or good evidence that it is in progress) is issued." Mr Wilson sent an e-mail to Amer Alkayed on 4 November, attaching a copy of the draft Agreement, 7/6 of process, previously handed to the petitioner's representatives on 21 October, with the invitation to "use it if you wish". Amer Alkayed responded by e-mail dated 5 November, 7/9 of process, referring to his being in contact with Scottish solicitors who were to let him know "if they going to draft an agreement for us." In an e-mail of 8 November sent to Sami Elemara (number 7/10 of process), Mr Paterson states: "It is 3 weeks since we met and finalised the deal and the [letter of credit] should have been established before now." He refers to another party who has an interest in buying the Plant whom he had told "it was sold" but, nevertheless, in the penultimate paragraph, he states: "I would urge you therefore to call Hamdu and make him realise that the delays may cause the plant to be sold to another party and he should issue the [letter of credit] immediately or pay the initial deposit."
9. Notwithstanding the terms of the above e-mails from the respondents' representatives, Mr Paterson sent to the petitioner an invoice in the sum of $780,000 relating to the Plant and dated 4 November 2003. The invoice, 7/12 of process, was sent as an attachment to an e-mail dated 10 November, 7/11 of process. The e-mail describes it as a "Performa invoice". This would appear to be a typographical error, pro forma being intended. The invoice included the information "Terms of payment Confirmed irrevocable at sight Letter of Credit (Major Bank) ...Prices based on CPT South Iranian Port." By e-mail dated 21 November addressed to Mr Paterson (contained within 7/13 of process), Amer Alkayed refers to telephone conversations, points to the reference in 7/12 to "Prices based on CPT South Iranian Port", and requests provision of a corrected invoice. A corrected invoice, also dated 4 November 2003, was sent by Mr Wilson to Amer Alkayed. Again, it was sent as an attachment to an e-mail. The e-mail was sent on 21 November. It is timed at 11:47. A copy of the e-mail is 7/13 of process. A copy of the attachment is 7/14 of process.
10. Number 7/18 is a copy of an e-mail sent by Mr Paterson on 21 November at 17:42 to Mr Gong of SPINDO and copied to Mr Wilson and Mr Hislop. It states, inter alia: "Thanks for coming to Scotland and deciding to buy the Selmers plant. The Bank confirmed today that the first deposit $50k was received. Consequently I can confirm that you have been approved by them and so have gained the right to buy the plant. We will advise the Sudanese that you are the approved buyer...". Number 7/17 of process contains a copy of the e-mail sent by Mr Hislop to Sami Elemara. It advises: "As [Mr Paterson] mentioned during your last call, we had received a further approach/interest in [the Plant] from a previous customer. ...It came as a surprise to everyone today, to have been advised that this client had now deposited the money in our Bank Account, and that our Bank/Tenon had now decided to accept his offer for the purchase of the plant. Having questioned their decision, our Bank reminded us that the Legal Agreement between Byard and GIAD Hamdo Pipes should have been drawn up within 5 days, and that as of today there was still no draft or document available 1 month on. Because of this, they had no alternative but to accept the new offer."
11. The petitioner did not accept that the respondents were free to sell the Plant to a third party. Its position was set out in a faxed letter from its Scottish solicitors, Messrs Brechin Tindal Oatts, dated 25 November 2003 and sent to the second respondent (number 7/16 of process). Subsequent to receipt of this letter I would understand communication between the parties to have been through their respective legal representatives.

Interim interdict: submissions

12. Mr Francis moved for interim interdict in terms of the prayer of the petition. He founded on 6/1 of process as constituting a concluded contract for the sale of the Plant by the respondents to the petitioner at a price of $780,000. In contrast to what appeared in the Outline Agreement, number 6/18 of process, that is what was suggested by the language used in 6/1. If words are taken as meaning what they say, the terms of 6/1 indicate that the parties had agreed all that was necessary for there to be an agreement between them. Why, Mr Francis asked, was 6/1 signed by the parties if it was not intended to have a binding effect? Mr Francis acknowledged that no spare parts list was attached or otherwise provided. That, he conceded, was a factor pointing away from a final agreement having been reached but, for all yet known, what would amount to the necessary spare parts may be something within the knowledge of someone skilled in such plant and, accordingly, he invited me to view 6/1 as indicating agreement on all the essentials of the bargain: price, goods, carriage and delivery, installation and commissioning, operation of the Plant and the training of personnel, final acceptance and testing (albeit the exact steps to be taken in testing were not identified) and post-installation support. It was Mr Francis's submission that the parties' agreement was complete as at 22 October 2003 but, if he were to be wrong about that, it was his position that what parties had done was to agree enough for there to be a bargain, recognising that they might agree something more but being content to stop at the point reached "for the moment". It was open to them to do so: Avintair Ltd v Ryder Airline Services Ltd 1994 SLT 613 at 615H to K. The reference to drawing up a legal document in 6/1 was with a view to "formalise" what was already an "Agreement". This was not a case of an agreement in principle which was expressly stated to be "subject to contract": cf Stobo v Morrisons (Gowns) Ltd 1949 SC 184. Rather, it was a case where the parties had made provision for a formal document but that it was ancillary to what was a binding agreement: cf Gordon's Executor v Gordon 1918 1 SLT 407 at 409. Mr Francis accepted, under reference to the speech of Viscount Haldane in Gordon's Executor v Gordon supra at 411, that, where parties stipulate in an agreement that there is to be a further agreement embodying the substance of what has been agreed and also other terms which the parties are subsequently to settle, they must make their intention plain if they wish to close their negotiations at the first stage with a completed bargain. Here, Mr Francis submitted, 6/1 contained an express statement of such an intention, but if there was doubt about that, one could look at the whole factual context and one would come to the conclusion that that was the parties' intention. He referred, by way of example, to the e-mail from Mr Paterson, 7/10 of process. Against this background, as Mr Francis put it, the respondents had decided, without anything by way of an ultimatum procedure, to resile from their bargain with the petitioner and sell the Plant to a third party. Mr Francis recognised that the Minute of Agreement included the provisions: "A legal document will be drawn up over the next 5 days to formalise this Agreement" and (under the heading "Payment Terms") "Confirmed Irrevocable Letter of Credit US$780,000 (Raised on Major Bank)". He further accepted that no legal document had been drawn up and that no letter of credit had been obtained (although it was Mr Francis's position that there was correspondence to show that a line of credit had been opened with a major bank, as indicated by the letter from Saudi Hollandi Bank, dated 10 December 2003, 6/7 of process). Mr Francis noted the position taken on behalf of the respondents. In answer 4 of the draft answers, on the hypothesis that the Minute of Agreement did constitute a legally binding agreement (which was denied) the respondents averred that it constituted only an "interim agreement" in respect that it was a material term of that agreement that it would be superseded by a legally drafted contract within 5 days or, in any event, within a reasonable period of time. Accordingly, the respondents averred that the Minute ceased to be binding on no legally drafted contract having been signed within 5 days or, in any event, 4 weeks (being a reasonable period) of 22 October. They further averred that it was a material term of what they averred to be an interim agreement that the petitioner would within a reasonable time either procure a letter of credit from a major bank or pay a deposit. The petitioner had done neither. According to the respondents, this failure constituted a material breach of the "assumed agreement". That breach gave the respondent the right to terminate the assumed agreement and it had exercised that right. Anticipating that Mr Sellar would found on the line of argument indicated by these averments, Mr Francis referred to the adoption, by Lord President Hope in Visionhire Ltd v Britel Fund Trustees Ltd 1991 SLT 883 at 887K, of the statement of the law to be found in Halsbury's Laws of England (4^th edit) vol 9 at para 481, which had been approved by Lord Fraser in United Scientific Holdings Ltd v Burnley Borough Council [1978] AC 904: "The modern law in the case of contracts of all types, may be summarised as follows. Time will not be considered to be of the essence unless: (1) the parties expressly stipulate that conditions as to time shall be strictly complied with; or (2) the nature of the subject matter of the contract or the surrounding circumstances show that time should be considered of the essence; or (3) the party who has been subject to unreasonable delay gives notice to the party in default making time of the essence." In Mr Francis's submission, this was not a case where time was of the essence. He recognised, under reference to Visionhire Ltd v Britel Fund Trustees Ltd supra at 887L that there was a rule that in mercantile contracts time will be considered to be of the essence but this, he submitted, was not a mercantile contract, it was more of the nature of a building contract. Here, time had not been made of the essence by the giving of notice through an ultimatum procedure, such as is discussed in the opinion of the Lord Ordinary (Sorn) in Rodgers (Builders) Ltd v Fawdry 1950 SC 483. Accordingly, such delay as there may have been on the part of the petitioner in proceeding with a "legal document ... to formalise [the] Agreement" or procuring a letter of credit cannot be regarded as a material breach of contract. Moreover, the position taken on behalf of the respondents in the e-mail 7/17 of process and in the draft answers, was totally at variance with their actings in raising the pro forma invoice dated 4 November 2003. Time for performance of the petitioner's obligations in relation to neither the entering into of a formal document nor the procuring of a letter of credit was of the essence. The parties did not treat it as being of the essence. The unpalatable truth was that something better came along and the respondents decided to take it, notwithstanding that they had previously entered into an agreement which was intended to be binding, unless superseded by a more formal document.
13. While it was Mr Francis's position that time for performance was not of the essence of the parties' agreement, he went on to submit that, in a sense, this did not matter. If, by virtue of delay, the petitioner was taken to be in repudiatory breach of a material term or material terms, it remained open to the respondents to waive that breach by their election and to treat the agreement as executory: Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India, The Kachenjunga [1990] 1 Ll L Rep 391 Lord Goff at 398. By issuing an invoice and then issuing a corrected invoice, that is what the respondents can be taken as having done.
14. Turning to the balance of convenience, Mr Francis advised that the petitioner had instructed the raising an action for specific implement of the agreement which he submitted had been concluded on 22 October 2003. The purpose of the petition was to preserve the status quo until the parties' rights could be determined in that action (or, I supposed, matters were settled by agreement). The Plant was second-hand. The information available to Mr Francis was that equivalent plant, purchased new, would cost something in the order of 3 million euros (I did not understand Mr Francis to dispute what was averred by the respondents that the difference between the cost of equivalent plant, purchased new, and the price of $780,000 might be quantified at about $1.6 million). The time for delivery would be about 5 or 6 months. Mr Francis accepted that if the petitioner's position was upheld it had a claim for damages against both the first respondent and the second respondent (who can be taken to be solvent). He accepted that the difference between the cost of acquiring an alternative to the Plant and the purchase price agreed with the respondents would be recoverable as damages directly arising from the respondents' breach of contract. However, the petitioner faced a problem of remoteness in recovering as damages all the losses that it would sustain in the event that the first respondent did not implement the contract constituted by the Minute of Agreement. As appeared from numbers 6/13 and 6/14 of process, the petitioner had contracted with China Petroleum Technology and Development Corporation ("CPTDC") to supply pipes in connection with a pipeline project in Sudan commencing in March 2004. If the first respondent did not supply the Plant the petitioner would not be able to implement its contractual obligations and would sustain losses which would not be recoverable as damages against the respondents because the first respondent could not be fixed with the necessary knowledge of the contract with CPTDC: Koufos v Czarnikow Ltd, The Heron II [1969] 1 AC 350. Anything other than interdict was therefore an imperfect remedy. The petitioner had a strong prima facie case. That weighed in its favour when considering the balance of convenience.
15. Mr Sellar moved me to refuse the petitioner's motion. He began his submissions by setting out six legal propositions: (1) in determining whether parties have indeed concluded an enforceable contract, the question to be asked is whether they have agreed everything that they consider to be essential for their agreement, which may be more or less than the minimum required by law; (2) in determining what was the parties' intention (and therefore whether they had agreed to be bound), one must consider their whole actings, including their reaction to the actings of the other party and the absence of reaction, and one must consider all the relevant documents, rather than artificially excerpt some material for consideration and ignore other material; (3) it is to be presumed, although the presumption is a weak one, that where parties stipulate that their agreement will be set out in a further document, they are not bound until they have signed such a document albeit that there is such a thing as an interim agreement; (4) it is to be presumed that where parties agree that a lawyer should draft a further document, they will only be bound by that further document; (5) time is to be presumed as being of the essence in commercial contracts; and (6) there is no difference as between Scots and English law on any of the foregoing matters. Mr Sellar derived his propositions from the following authorities: Stobo v Morrisons (Gowns) Ltd supra at 192, Gordon's Executor v Gordon supra at 409 and 411, Pagnan SpA v Feed Products [1987] 2 Ll Rep 601 at 619 and 620, Ignazio Messina v POL [1995] 2 Ll Rep 566 at 570, Avintair Ltd v Ryder Airline Services Ltd 1994 SLT 613 at 615, and Bunge Corporation v Tradax Exports SA [1981] 1 WLR 711 at 716, 719, 725 and 728.
16. Mr Sellar accepted that there were features of 6/1 of process which indicated that it might be intended to be a legally binding document: its title, the fact that it was signed, the reference to Byard's authority, its containing language suggestive of contract and different from that adopted in 6/18, the fact that in it the essential elements of a contract of sale were covered. However, he went on, 6/1 could not be taken out of its whole context. It was clearly not complete. What was contemplated by the parties was a complex contract for an international sale, involving after-sales servicing in the Sudan. Payment was to be by means of a confirmed irrevocable letter of credit. All these were features which pointed to the parties wishing certainty and wanting it quickly. This was all the more so because, in what was a case of receivership, parties were aware that other parties were in negotiation with the respondents. Number 6/1 of process looked to a legal document being drawn up over the next five days. That was consistent with parties having agreed on terms but not yet being bound: what was referred to in Pagnan SpA v Feed Products supra at 619 as the ordinary "subject to contract" case. The language of 6/1 was relatively informal. That 6/18 was entitled "Outline Agreement" showed that there was no magic about the word "agreement". Although not acknowledged in the petition, a draft Agreement, 7/6 of process, which had more of the look of a formal contract, had been handed over by the respondents on 21 October 2003. The draft Agreement had been e-mailed to Amer Alkayed on 4 November without eliciting a response beyond that contained in 7/9: a reference to obtaining legal advice. The e-mail of 27 October from Mr Wilson to Wilson to Sami Elemara, 7/7 of process, was of importance as indicating the position of the parties as being that a binding contract had not been concluded. Admittedly, there was a reference to the Plant having been sold in 7/7 of process, but that e-mail was ambiguous. It stated that "delays may cause the plant to be sold to another party". Again, there was no response beyond a request for a pro forma invoice. The expression "pro forma" suggested that what being asked for and what was sent was something different from an actual invoice. Not until the letter of 25 November from Messrs Brechin Tindall Oatts, 7/16 of process, is there a claim that a binding contract had been concluded. Whether or not the e-mail to Sami Elemara, 7/17 of process, in which Mr Hislop clearly seeks to shift any blame away from himself, is or is not to be regarded as disingenuous, what it contains is consistent with what is the respondents' position: the parties never reached an agreement which was other than binding in honour only. Properly considered, the parties remained in negotiation.
17. As an alternative position, Mr Sellar argued that what was arrived at on 22 October 2003, as evidenced by 6/1, was no more than an "interim agreement" in respect that it was a material term of that agreement that it would be superseded by a legally drafted contract within five days or, in any event, within a reasonable period of time. During that interim period the parties can be taken to have agreed to act in good faith towards each other and the respondents would be under an obligation not to sell to anyone else. That interim agreement ceased to be binding on no legally drafted contract having been signed within five days or, in any event, four weeks (being a reasonable period) from 22 October. Finally, Mr Sellar pointed to the petitioner's obligation to procure a confirmed and irrevocable letter of credit, this they had not done. Number 6/7, which bore to be a letter from the Saudi Hollandi Bank addressed "to whom it may concern" was not a letter of credit. Accordingly, the petitioner was not able to comply with its obligations under the agreement upon which it founded.
18. As far as balance of convenience was concerned, Mr Sellar referred me to the averments in answer 7 in the draft answers. These were to be contrasted with the bare averment in the petition to the effect that the status quo should be maintained. Should the petitioner be ultimately successful, an award of damages (for which the second respondent would be liable) would provide a sufficient remedy. The petitioner could obtain equivalent plant, albeit by purchasing it new. Such vouching as the petitioner had produced by way of 6/13 and 6/14 of process was inadequate to demonstrate that the petitioner would suffer consequential loss beyond the additional cost of acquiring new plant. It was by no means clear from the available documentation that the petitioner had indeed concluded a binding contract with CPTDC which, if breached, would lay the petitioner open to a claim for damages. No such contract had been referred to in the course of negotiation between the parties. The documents which had been lodged were incomplete and inspecific. If interim interdict is granted the respondents would be put in breach of contract with SPINDO. In that event their liability is reasonably estimated at $1,605,250. Accordingly, the matter should be approached on the basis that the respective parties will each suffer an equivalent loss (of about $1.6 million) in the event that the decision on interim interdict is unfavourable. Should the respondents be interdicted, either the Plant would lie sterile, pending determination of the petition and further litigation, or the Receiver would be forced to compromise. The respondents knew nothing about the petitioner's financial position. It was not known to have any assets in the United Kingdom. Its failure to obtain a letter of credit implied that it was not strong. It did not appear that any liability that it incurred would be readily recoverable as damages in Sudan. The balance of convenience was against interim interdict.

Interim interdict: discussion and decision

19. Before I can consider whether I should grant interim interdict, I must be satisfied that the petitioner has demonstrated a prima facie case that what it seeks to prohibit would amount to an unlawful interference with its rights or interests. In the circumstances, that, in turn, depends upon whether the petitioner has demonstrated a prima facie case that parties have concluded what was intended as an enforceable contract for the sale of the Plant, as evidenced by the Minute of Agreement, 6/1 of process. A finding that there is a prima facie case requires no more than what is put forward by the petitioner being sufficient to require answer. In my opinion, on the basis of what has been put before me and having regard to the authorities referred to by counsel and noted above, the petitioner has demonstrated a prima facie case that it entered into an enforceable contract with the respondents for sale of the Plant on 22 October 2003. Beyond that, at this stage in the proceedings between the parties, I do not consider it appropriate to enter into a discussion of the merits of that case other than to say that I decline to characterise it as a necessarily strong one. On a full consideration of the case the petitioner may succeed. It may not.
20. I thus accept that the petitioner has demonstrated a prima facie case to the effect that the parties concluded a contract for the sale of the Plant and that, in breach of that contract, the respondents propose to implement a subsequently concluded sale by delivering the Plant to a third party, SPINDO. I have been advised by Mr Francis that the petitioner has instructed the raising of an action for specific implement of what the petitioner maintains is its contract with the respondents. In these circumstances it is open to me to grant interim interdict, as I am moved to do, with a view to protecting the petitioner's right to delivery of the Plant on payment of the price indicated by the terms of the Minute of Agreement, 6/1. In determining whether, in an exercise of my discretion, I should do so, I must, however, have regard to what I see as the balance of convenience. In my opinion, having regard to all the circumstances as I understand them to be, the balance of convenience does not point to a grant of interdict at this stage. In so saying I take it that, if interim interdict is not pronounced, the respondents will implement the contract with SPINDO and that the Plant will be delivered to that third party. It was not suggested that the respondents possess other equivalent plant. Refusal of interim interdict means, therefore, that if the petitioner is to acquire such plant it must purchase it elsewhere. I was advised that such plant can be purchased elsewhere, albeit at additional cost over what was agreed with the respondents and with a longer time for delivery. I take the additional cost to be of the order of the $1.6 million mentioned by counsel. It follows that the petitioner can claim that it will suffer loss if interim interdict is not granted and I must take that into account. However, if the petitioner is correct in its contention that the parties concluded a binding contract for the sale of the Plant at a price of $780,000, it has available the remedy of an action for damages in which the additional cost of $1.6 million would, on the face of it, be recoverable. Now, it is the position of the petitioner that it will suffer further, consequential, loss, in the event that the respondents continue to refuse to supply the Plant but that such loss would be too remote to be recoverable as damages in a question with the respondents. Reference was made to an agreement between the petitioner and CPTDC (for which 6/13 is put forward as evidence) for the supply of pipes, the manufacture of which was dependent on the petitioner having the Plant. Number 6/14 of process suggests that this irrecoverable loss might be $30 million. In my opinion, what has been put before me is altogether insufficient to allow me to be satisfied that the petitioner will suffer substantial loss which will be otherwise unavoidable and irrecoverable unless interim interdict is granted. Number 6/13 of process does not have the look of a contract committing the petitioner to the delivery of specific quantities by a specific date. Indeed, I am left in doubt as to whether it is anything more than a statement by the parties of a mutual intention to cooperate in relation to a particular pipeline project. Number 6/14 of process is merely a brief letter, dated 16 December 2003, from Hamdo Abdulkarim, the petitioner's chairman, addressed to the petitioner's solicitor. On available information I therefore proceed on the basis that, if the respondents are found to be in breach of contract, the petitioner will have a sufficient remedy in damages against parties, one of which at least can be taken to be capable of meeting an award. That is a powerful consideration pointing away from an award of interim interdict, but matters do not stop there. Grant of interim interdict, of itself, would not prevent the losses the petitioner avers that it apprehends. In order to avoid these losses the petitioner requires the expeditious delivery and installation of the Plant. Interim interdict cannot secure that, at least not directly. That would still be so, given the time that litigation takes, even were the petitioner immediately to bring proceedings for specific implement and be successful in these proceedings. Thus, I can have no confidence that by granting interim interdict the harm apprehended by the petitioner will be prevented. On the other hand, were I to grant interim interdict, it seems clear that the respondents would suffer harm as a consequence. They would be unable to deliver the Plant to SPINDO, as they have contracted to, thereby making them liable in damages. Moreover, as Mr Sellar characterised it, the Plant would be sterilised. It could not be put to use or sold (other than to the petitioner). With the passage of time there is the possibility that it would lose its value. This is in a situation where nothing is known about the financial standing of the petitioner and its ability to meet any liability that it might incur to the respondents in respect of their losses, by reason, for example, of having obtained interdict wrongously. It was accepted by Mr Francis that, notwithstanding the requirement of 6/1 that payment be by means of a confirmed irrevocable letter of credit, a confirmed irrevocable letter of credit has not been procured. I agree with Mr Sellar that this permits an adverse inference as to the strength of the petitioner's financial standing. I consider that this failure to procure a confirmed irrevocable letter of credit is also relevant to raise a real question over the petitioner's ability to comply with its obligations under what it avers is a binding contract of sale. That there is such a question is a further reason, in my opinion, to decline to grant interim interdict. The petition presents the granting of interim interdict as a preserving of the status quo. Mr Francis repeated that in submission. While I can understand that characterisation, I do not accept it as an accurate one. As matters stand, the respondents can proceed to sell the Plant to the party they choose, taking all the consequences of their choice. If I were to grant interim interdict, the respondents would be prohibited from selling, to any party other than the petitioner, assets which the second respondent has decided should be realised and which, if not realised at an early date, may lose their value. I would see that as a material and adverse alteration to the position of the respondents, rather than a preservation of the status quo. It would be an alteration which I would consider to be unjustified in all the circumstances of the case. I shall accordingly refuse interim interdict.

Sisting a mandatory

21. Mr Sellar moved me to ordain the petitioner to sist a mandatory, and meantime to sist the petition. As enrolled, the motion was to sist a mandatory by 24 December 2003 but that timing was superseded by my continuation of consideration of the motion. Mr Sellar indicated that the purpose of the motion was that there be a party, subject to the jurisdiction of the court, who would be liable for any award of expenses made against the petitioner and who would be responsible for the proper conduct of the litigation. As was explained by Lord Kilbrandon in NV Ondix International v Landay Limited 1963 SC 270 at 271, the general rule is that a foreign pursuer will usually, and a foreign defender less usually, be ordered to sist a mandatory; but that it was a matter for the discretion of the court (Lord Kilbrandon's references to a "foreign" pursuer or defender being understood as references to parties, domiciled outside Scotland, against whom an award of expenses cannot readily be enforced). Mr Sellar recognised that the court may decline to sist a mandatory in the case of a foreign pursuer who has a good prima facie case, but, he submitted, the standard of good prima facie case in this context must mean something a lot higher than simply a prima facie case. In addition to NV Ondix International v Landay Limited, Mr Sellar referred me to the decisions in Harrison v Butters 1968 SLT (Notes) 90 and McLean v McGarvey (1903) 16 SLT 174 and the passages in MacPhail Sheriff Court Practice (2^nd edit) Vol 1 at pages 367 to 374. Mr Sellar drew my attention to a typed chronology of events beginning on 25 November and ending on 19 December 2003 with a view to demonstrating the apparent difficulty that had been experienced by those acting for the petitioner in obtaining instructions. This, he said, underlined the importance of there being someone within the jurisdiction who was responsible for the proper conduct of the litigation and was an additional reason why I should exercise my discretion in favour of ordaining the petitioner to sist a mandatory.
22. Mr Francis took no issue with the Mr Sellar's exposition of the law as it related to the sisting of a mandatory. He did not maintain that there was a readily operable mechanism for the enforcement of a Scottish decree in Sudan.
23. I accept as accurate Mr Sellar's statement of the relevant law. In particular, I accept what he had to say about what, in the context of an application to sist a mandatory, is meant by a good prima facie case. A prima facie case is no more than one that is sufficient to require answer. I take a good prima facie case, sufficient to persuade the court not to require the sisting of a mandatory to be something altogether stronger than that. In NV Ondix International Lord Kilbrandon exercised his discretion against ordering a foreign pursuer to sist a mandatory where that pursuer was suing on dishonoured bills of exchange. As he explained, the pursuer was not only in the position of having a prima facie case; it was in the position of a defender in the merits of the litigation in that it would succeed in the absence of a case being substantiated by the debtor. M'Lean v M'Garvey related to two actions arising out of one incident, one for damages for personal injury caused by an assault, the other for damage to furniture. The defender had pled guilty in a criminal court to a charge of assault on one of the pursuers. Lord Guthrie refused to order the sist of a mandatory upon the basis that it was to be presumed that the pursuer in the action for personal injury would be awarded damages and, in the absence of a tender, the defender would not obtain an award of expenses. He took the action in respect of damage to furniture as being ancillary to the personal injury action. Thus, in both NV Ondix International and M'Lean v M'Garvey the onus was on the defender to make out a defence. That is less clearly so from the brief report in Harrison v Butters, the third of the cases cited. However, it would appear that there both defenders had made admissions which materially advanced the pursuer's position. I therefore take it on the basis of these authorities that the normal rule which requires that a pursuer domiciled in a jurisdiction where a Scottish decree will not readily be recognised and enforced, must sist a mandatory or otherwise give security for an adverse award of expenses, admits of an exception where, on the material put before the court, it appears very likely that the pursuer will succeed. This is not such a case.
24. I shall therefore ordain the petitioner to sist a mandatory and shall allow it until 31 January 2004 in order to do so. I do not consider that the respondents' position on this matter is materially advanced by the alleged difficulties experienced by those acting for it in obtaining instructions from the petitioner, but I do consider that the respondents are entitled to seek some form of security for their expenses when faced with litigation at the instance of a party domiciled in a country where the enforceability of a Scottish decree is at best uncertain. For the avoidance of doubt, I recognise that the petitioner may experience difficulty in finding a party willing to be sisted as a mandatory. In that event, I see it as open to the petitioner to seek to have the order ordaining it to sist a mandatory recalled on the provision of adequate alternative security for the respondents' expenses, the adequacy of the security being determined by the court, in the absence of agreement between the parties. Meantime I shall sist the petition.