Transgem Trust v. Tanzania Zoisite Corp. Ltd. (HC) Civ. Case 33-A-68, 9/9/68, Platt J.

Transgem Trust v. Tanzania Zoisite Corp. Ltd. (HC) Civ. Case 33-A-68, 9/9/68, Platt J.

Plaintiffs sued for a declaration that the defendant’s termination of their contract was null and avoid and for an order of specific performance directing defendants to perform the contract. Under the contract, the defendants agreed to sell all of a certain mineral (zoisite) coming into their possession by virtue of certain mining conditions to the plaintiffs and that the plaintiffs would loan the defendants specified sums for purposed of mining operations. Disputes arose between the parties, the plaintiffs claiming that the defendants were sending minerals of an inferior quality and that somehow better quality minerals were being delivered to plaintiffs’ competitors and the defendants claiming that the plaintiffs’ competitors and the defendants claiming that the plaintiffs were not paying for the shipments made with sufficient promptness. In August, 1968, the parties met and an oral agreement was made that the plaintiffs would pay for shipments already delivered and that the defendants would make up for deficient quality of earlier shipments by including higher quality minerals in subsequent shipments. The defendants were late in making the next shipments and the plaintiffs did not pay for the earlier shipments by the date that the defendants expected. The defendants then terminated the contract citing plaintiffs’ failure to make the payments and also an alleged failure to advance certain sums promised under the contract. The case came up for hearing on plaintiffs’ application for a temporary injunction pending final decision in the case restraining the defendant form disposing of any minerals in their possession other than to the plaintiffs.

            Held: (1) The plaintiffs have not signed the plaint, but have given an undertaking to sign the complaint later. Signing of the plaint is a matter of procedure and this defect does not affect the merits of the case or the jurisdiction of the court. (2) In dicta, the court noted that under Order 37 of the Civil Procedure Code it is not possible to file for a temporary injunction before the suit is filed, and that it might be desirable to amend the Order to allow for that possibility. In this case, however, the suit had been filed. (3) Plaintiffs’ action is based in part on the theory that the contract contained an arbitration clause which the defendant did not respect in terminating the contract unilaterally, and that the court should therefore enter an order of specific performance requiring defendants to submit their complaints to arbitration. However, the contract did not make an arbitration award as a condition precedent to a cause of action, and it is well settled that an arbitration clause of this type will not be enforced by specific performance. [Doleman & Sons v. Ossett Corp., (1912) 3 K.B. 257, 296]. (4) It is clear that the plaintiffs will suffer irreparable loss if the defendants sell minerals to other buyers as they plan, because plaintiffs have invested considerable resources in building up a market for this minerals, which is a new type of jewel. (5) The plaintiffs must also show that there is a fair chance that they will succeed ultimately on the merits of the lawsuit. Although the fact are complicated, and not all the evidence is before the court, there appears to be reasonable possibility that the plaintiffs will be found not to be in breach at all, or if they are in breach that the breach was not so serious as to entitled defendants to terminate the contract under

s. 31(2), English Sale of Goods Act, which is made applicable by an express term of the contract. (6) The balance of conveniences must also be considered, and become very important in a case which the outcome of the suit on the merits is in doubt. It does not appear the injunction will cause the defendants undue inconvenience providing it is conditioned on the plaintiffs paying the defendants the amount owing for shipments already made and upon placing a deposit in court sufficient to cover the defendants’ possible damages if they succeed on the merits. Temporary injunction issued.