“20. Was the Facility secured by way of pledge (or charge) prior to the registration of it in the public registry on or about30 October 2017 and, if not, were any sums advanced under the Facility a breach of a condition precedent and/or did the Goods and Products at the Site form part of the Borrowing Base under the Facility?”
“After having a look on stock of scrap copper located in the scrapyard, the remaining physical stock of net scrap copper can be estimated at 150 tonnes while our report shows 1970.566 tonnes which is not normal. … Investigations are in progress to know the origin of this enormous difference.”
“Either the stock was removed from the Site without us knowing. Or it was wrongly reported when it came in.”
“70. The measure of loss recoverable by a pledgee who has been deprived of the pledged goods is the full value of the goods at the date of the wrongful seizure, not merely the value of the pledgee’s security interest in the goods: Swire v. Leach (1865) 18 CB (NS) 479 …, approved by Lord Collins MR in The Winkfield[1902] P 42 at 57 …. 71. This measure of loss reflects the general principle that a possessory interest in goods is sufficient to claim substantive damages for loss or damage to the goods, and the correlative principle that it is irrelevant that the claimant may have to account to a third party for some or all of the damages recovered: see The Winkfield at 54; The Jag Shakti[1986] 1 AC 337 at 345 …; The Sanix Ace [1987] 1 Lloyd’s Rep. 465 at 468-469... 72. Moreover, by reason of the relationship of bailment between them on the terms of the CMA, Vallis is precluded from denying that Scipion had sufficient interest in the Goods to recover the damages claimed. In The Winson[1982] AC 939 at 959 …, Lord Diplock said that it “follows from the existence of the legal relationship of bailor and bailee as a matter of general principle of the law of bailment, which may also be described as hornbook law, that as between [the bailors and the bailees] the latter as bailees were estopped from denying the title to the goods of the former as their bailor …”. 73. That general principle of the law of bailment is reinforced in the present case by the specific terms of the CMA. By Recital (A) to the CMA … it was “hereby agreed by theParties that the requisite security in favour of SCIPION over theGoods shall be created by the delivery of the Goods into thecustody of VCL who shall hold the Goods as an agent of SCIPION for the purposes of creating the requisite security in favour of SCIPION” and by clause 2.2 of the CMA … “MZG acknowledges and confirms that the Goods and Products shall be held in the name of SCIPION for the account of MZG until the end of the Security Period and until such time, MZG have noequitable or proprietary rights or interests in such Goods andProducts …”
“[W]as the plaintiff entitled to recover damages to the full value of the goods seized and sold? …In distraining these goods, the defendant was an absolute wrong-doer. The landlord had no colour of right to take them. The bailee, therefore, is entitled to the full value of the goods. He may retain out of that the sums he has advanced upon them and the interest, and he will be liable to hand over the surplus to the respective owners of the goods.” (p536) Williams J similarly stated: “As to the damages, it is clear that, as against a wrong-doer, the plaintiff was entitled to recover the full value of the goods at the time of the wrongful seizure.”
“… the law is that in an action against a stranger for loss of goods caused by his negligence, the bailee in possession can recover the value of the goods, although he would have had a good answer to an action by the bailor for damages for the loss of the thing bailed. It seems to me that the position, that possession is good against a wrongdoer and that the latter cannot set up the jus tertii unless he claims under it, is well established in our law, and really concludes this case against the respondents. … I think it can be shewn that the right of the bailee to recover cannot be rested on the ground suggested in some of the cases, namely, that he was liable over to the bailor for the loss of the goods converted or destroyed. … as between possessor and wrongdoer the presumption of law is, in the words of Lord Campbell in Jeffries v. Great Western Ry. Co., “that the person who has possession has the property.”
“I am of opinion that the law is that a person possessed of goods as his property has a good title as against every stranger, and that one who takes them from him, having no title in himself, is a wrongdoer, and cannot defend himself by shewing that there was title in some third person, for against a wrongdoer possession is title. .. .”
“It has further, in their Lordships' opinion, been established, by authority of long standing, that where one person, A, who has or is entitled to have the possession of goods, is deprived of such possession by the tortious conduct of another person, B, whether such conduct consists in conversion or negligence, the proper measure in law of the damages recoverable by A from B is the full market value of the goods at the time when and the place where possession of them should have been given. For this purpose it is irrelevant whether A has the general property in the goods as the outright owner of them, or only a special property in them as pledgee, or only possession or a right to possession of them as a bailee. Furthermore the circumstance that, if A recovers the full market value of the goods from B, he may be liable to account for the whole or part of what he has recovered to a third party, C, is also irrelevant, as being res inter alios acta.”
“Applying the general principle laid down in Swire v. Leach, 18 C.B.N.S. 479 and The Winkfield [1902] P. 42 to the present case, their Lordships reach the following result. First, the plaintiffs, as holders and endorsees for value of the bills of lading, had a right to delivery of the salt to them at Chittagong. Secondly, that right entitled the plaintiffs to recover from the shipowners, who had wrongfully converted the salt by delivering it to the buyers, the full value of the salt on delivery at Chittagong. Thirdly, the circumstance that the plaintiffs, having recovered from the shipowners the full value of the salt, might, after taking out of the sum recovered the sums expended by Atlas in financing the purchase of the salt by the buyers from the sellers, have to account, in whole or in part, for the balance to the buyers was, as between the plaintiffs and the shipowners, wholly irrelevant.”
“302. The so-called principle of contractual estoppel was explained as follows by Moore-Bick LJ in Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd,[2006] EWCA Civ 386 at paragraph 56: “There is no reason in principle why parties to a contract should not agree that a certain state of affairs should form the basis for the transaction, whether it be the case or not. For example, it may be desirable to settle a disagreement as to an existing state of affairs in order to establish a clear basis for the contract itself and its subsequent performance. Where parties express an agreement of that kind in a contractual document neither can subsequently deny the existence of the facts and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel: …”
“16. Therefore, Scipion’s asserted entitlement to hold any possessory interest allowing it to recover substantial damages in these proceedings is based on the existence of a bailment relationship between Scipion and Vallis. It is this and only this relationship upon which Scipion relies to assert both that (a) it holds any possessory rights giving it a right to recover substantial damages and (b) to preclude Vallis from challenging otherwise. 17. It was common ground at trial that there was a bailment relationship between Scipion and Vallis on the terms of the CMA. 18. Vallis also accepts that at common law there is a rule that a bailee is estopped from denying or disputing his bailor’s title i.e. he is estopped from pleading jus tertii against his bailor. 19. Vallis submits, however, that the bailee’s estoppel was abolished bysection 8(1) of the Torts (Interference with Goods) Act 1977 … … 41. In short, Vallis submits that, notwithstanding the bailment relationship which existed between itself and Scipion, it is entitled in these proceedings to show that a third party, Mac Z, has a better right than Scipion as respects all or any part of the interest claimed by Scipion or in the right of which it sues. 42. If, as is Vallis’ case, the Pledge was invalid then Vallis submits that Scipion in fact held no security, proprietary or possessory rights in the copper scrap at the time of the loss with all such rights in fact remaining vested in Mac Z.”
“At the common law a pledge could not be created except by a delivery of possession of the thing pledged, either actual or constructive. It involved a bailment. If the pledgor had the actual goods in his physical possession, he could effect the pledge by actual delivery; in other cases he could give possession by some symbolic act, such as handing over the key of the store in which they were. If, however, the goods were in the custody of a third person, who held for the bailor so that in law his possession was that of the bailor, the pledge could be effected by a change of the possession of the third party, that is by an order to him from the pledgor to hold for the pledgee, the change being perfected by the third party attorning to the pledgee, that is acknowledging that he thereupon held for him; there was thus a change of possession and a constructive delivery: the goods in the hands of the third party became by this process in the possession constructively of the pledgee. …”
“… There is little doubt,” said Devlin J., “that it is the lex situs which, as a general rule, governs the transfer of movables when effected contractually.” “The proper law governing the transfer of corporeal movable property,” said Diplock L.J., “is the lex situs.” “The practical considerations of trade and commerce”, said Moore-Bick J., “provide strong support, in my view, for the adoption of a lex situs rule in all cases”
“27.. Mr. Schaff suggested that these cases could be seen as illustrating the limitations of the lex situs rule in cases where the court is concerned only with the passing of property between the immediate parties to the transaction. In particular he drew my attention to a passage in the speech of Lord Reid in Zivnostenska Banka v Frankman where he said at page 83 “there is no apparent reason why the parties should find it attractive that rights under the contract with regard to deposited property should vary according to the place where that property might be at the time; and should, so long as that property was deposited abroad, be settled by a law with which the parties were perhaps unfamiliar.”
“[Mac Z] acknowledges and confirms that the Goods and Products shall be held in the name of SCIPION for the account of [Mac Z] until the end of the Security Period and until such time, [Mac Z] have no equitable or proprietary rights or interests in such Goods and Products, and such Goods and Products are held for and on behalf of SCIPION and to SCIPION’s order…”
“no proceedings in tort shall lie against the Post Office in respect of any loss or damage suffered by any person”
“To my mind it would make nonsense of section 29 of the Act of 1969 to hold that the Post Office can be liable for breach of bailment. As explained by Diplock L.J. in Morris v. C. W. Martin & Sons Ltd. [1966] 1 Q.B. 716 the two most obvious duties arising out of the relationship of bailor and bailee are the duties on the part of the bailee to take reasonable care of the goods, and not to convert them. Both negligence and conversion are, of course, typical torts. The advantage to the plaintiff in laying his action in bailment is that it shifts the burden of proof. It is for the bailee to explain how the loss occurred. In that sense the plaintiff's task is easier in bailment; the defendant's more difficult. It would be a curious result if Parliament had, by section 29(1), given the Post Office full protection in negligence and conversion where, as defendant, its task is easier, but not in bailment where, for the reasons I have just mentioned, its task is more difficult.”
“(C) It is hereby agreed by the Parties that the requisite security in favour of SCIPION over the Goods shall be created by the delivery of the Goods into the custody of VCL, who shall hold the Goods as an agent for SCIPION for the purposes of creating the requisite security in favour of SCIPION.” “2.2 “[Mac Z] acknowledges and confirms that the Goods and Products shall be held in the name of SCIPION for the account of [Mac Z] until the end of the Security Period and until such time, [Mac Z] have no equitable or proprietary rights or interests in such Goods and Products, and such Goods and Products are held for and on behalf of SCIPION and to SCIPION’s order…”
“(A) [Mac Z], pursuant to the facility agreement dated , has entered into and agree to the terms and conditions of the Copper Borrowing Base Facility (the “Financing Facility”) offered and provided to [Mac Z] by SCIPION for the purpose of assisting with its commercial trade business. (B) Pursuant to the provisions of the various transaction documents entered into by, among others, SCIPION with [Mac Z], the Financing Facility is to be secured by way of pledges over the Goods and Products or their equivalent, which in the case of Goods are to be purchased by [Mac Z] from the various domestic suppliers of copper scrap; and in the case of Products, to be sold to Eligible Buyers.”
“Pursuant to the provisions of the various transaction documents … the Financing Facility is to be secured by way of pledges over the Goods … or their equivalent”
“(A) Pursuant to a facility agreement dated on or around the date of this Agreement entered into between the Secured Party as lender, and the Pledgor as borrower (the “Facility Agreement”) to fund the purchase by the Pledgor of the Goods for processing into Products, the Secured Party has agreed to make available to the Borrower an uncommitted Dollar revolving copper borrowing base facility in a maximum total amount of USD 10,000,000 on the terms and conditions set out in the Facility Agreement and for the purposes therein mentioned (notably 159. regarding the duration and the interest rate applicable to the Facility). (B). As security for the due performance of the Secured Obligations (as defined below), the Pledgor has agreed, according to Clause 4.1 of the Facility Agreement, to grant to the Secured Party a Pledge over Goods and Products “convention de nantissement de marchandise” pursuant to the terms of this Agreement (as defined below). (C). In this context, the Parties have agreed to enter into this Pledge over Goods and Products the “Agreement”, subject to the provisions of Articles 378 et seq. of Dahir n°1 96-83 dated August 1, 1996 portant promulgation de la toi n° 15-95 formant code de commerce “(Commerce Code”).]”
“… “Collateral” means the Pledged Assets and the Pledged Documents”. … “Finance Documents” has the meaning ascribed to such term in the Facility Agreement. “Goods” means copper scrap. “Products” means copper products including wires, tubes and billets, whether finished or unfinished. … “Pledge” means the Pledge created over the Collateral pursuant to this Agreement, in compliance with articles 378 et seq. of the Commerce Code. “Pledged Assets” means the Goods, Work in Progress and the Products, whether current or future, owned by the Pledgor and Pledged under this Agreement in favor of the Secured Party, the list of which is specified in Schedule 1 ‘List of Pledged Goods and Products’. … “Secured Obligations” means present and future liabilities (whether in respect of any payment or performance of the Obligors under or in connection with the Finance Documents).” 130.The Pledge’s key operative provisions are as follows: “2.1 Constitution of the Pledge As security for the full repayment, discharge and performance of the Secured Obligations, and in compliance with articles 378 et seq. of the Commerce Code, the Pledgor hereby grants in favour of the Secured Party, a first ranking Pledge over the Collateral, including any Goods and/or Products which may be substituted to any other Goods and/or Products after the date hereof. 2.2 Nature of the Collateral The nature of the Collateral is described in Schedule 1 (List of Pledged Goods and Products). 2.3 Quantity of the Collateral The quantity of the Collateral is described in Schedule 1 (List of Pledged Goods and Products). 2.4 Value of the Collateral The value of the Collateral held under the relevant Warehouse Receipts shall, at any time so long as the Agreement or the Pledge is in force, combined with the cash balance held on the Local Collection Accounts and subject to the Pledge over Bank Accounts, be equal to or not less than one hundred and twenty five percent (125%) of the aggregate amount of outstanding Advances under the Facility, being the Borrowing Base Coverage Ratio tested by delivery by the Pledgor of the weekly Borrowing Base Report. If the ratio outlined in the paragraph above is not met, the Pledgor undertakes before the next test date to either i) Pledge additional Goods and/or Products ii) pay an additional amount into the relevant Local Collection Account or iii) prepay an Advance, to ensure that the ratio is preserved by the next weekly Borrowing Base Report. 2.5 Designation of a Third Party Consignee The Secured Party expressly entrusts the Collateral Manager with the custody of the Collateral. A Collateral Management Agreement dated on or about the date of this Agreement has been entered into between the Secured Party and the Collateral Manager, to this purpose. 2.6 Storage of the Collateral The Collateral shall be stored at the Mac Z Facilities. 2.7 Insurance over the Collateral The Collateral is insured with (insert name of the insurance company). The details of the Insurance Policy are provided in Schedule 2(Insurance Policy). In case of damage to the Collateral, the Secured Party shall be subrogated in any rights, action and privilege of the Pledgor with regards to any insurance indemnity related to the Collateral pursuant to the Insurance Policy, without an express delegation being necessary, and may, in case of a continuing Enforcement Event, directly perceive the amount of such indemnities within the limit of the Secured Obligations. 2.8 Exclusivity of the Pledge It is expressly agreed that the Pledgor shall not create or permit the existence of any security interest in the Collateral, with the exception of the Pledge created hereby. 2.9 Rights under the Pledge The Secured Party will benefit, at any time, all the rights and prerogatives, which it is entitled to under Morocco law, under this Pledge, and may exercise such rights and powers, including obtaining of the amounts due by the Pledge under the Secured Obligations.”
“The Pledgor will promptly, at its own cost, do all such acts or execute all such documents as the Agent may specify (and in such form as the Agent may require): 3.1 to perfect the Pledge created or intended to be created under or evidenced by this Agreement; 3.2 for the exercise of any rights, powers and remedies of the Secured Party provided by pursuant to the Facility Agreement or by law; and 3.3 to facilitate the enforcement of the Pledge; without such operation constituting in any manner a novation of the rights or security granted under this Agreement. The Pledgor shall take all such actions reasonably requested by the Agent (including making all filings and registrations) necessary for the purpose of the creation, perfection, protection or maintenance of the Pledge conferred or intended to be conferred on the Agent by or pursuant to this Agreement.” 3.1 to perfect the Pledge created or intended to be created under or evidenced by this Agreement; 3.2 for the exercise of any rights, powers and remedies of the Secured Party provided by pursuant to the Facility Agreement or by law; and 3.3 to facilitate the enforcement of the Pledge; without such operation constituting in any manner a novation of the rights or security granted under this Agreement. The Pledgor shall take all such actions reasonably requested by the Agent (including making all filings and registrations) necessary for the purpose of the creation, perfection, protection or maintenance of the Pledge conferred or intended to be conferred on the Agent by or pursuant to this Agreement.”
“This Agreement shall be registered as first ranking on the specific register held before the Secretariat-greffe of the Commerce Court, pursuant to article 381 of the Commerce Code. Upon expiry of the first period corresponding to the legal validity period of the Pledge and so long as any Secured Obligation is continuing, the Pledgor shall renew, in favour of the Secured Party, at its costs and expenses, the registration of the Pledge for a new legal validity period in compliance with article 384 of the Commerce Code. The Agent may, as the case may be, implement, at the costs and expenses of the Pledgor, any formalities, (including renewing the registration provided for in this Article 7) which may be necessary or useful to oppose the Pledge to third parties. All powers of attorney in view of registering the Pledge pursuant to this Article 7 or renewing such registration are given to that purpose to any holder of an original copy of the Agreement.”
“A deed constituting the Pledge of goods was filed on30/10/2017 under the no. 81 in favour of Scipion Active Trading Fund Srl and Scipion Capital (UK) Ltd for the sum of 10,000,000 American dollars. Situation: Subject to control [Sous réserve de controle]”
“Article 336: There are two kinds of pledges: a pledge that supposes the debtor’s dispossession and a pledge that is without dispossession.”
“Il y a deux sortes de nantissement: le gage qui suppose la dépossession du débiteur et le nantissement sans dépossession.”
“Article 337: The pledge constituted either by a trader, or by a non-trader as a commercial act, is governed by the general provisions of Articles 1184 to 1230 of the dahir of 9 ramadan 1331 (12 August 1913 ) forming the code of obligations and contracts and the special provisions of the first section below. The commercial pledge may take the special form of deposit in the general warehouse, which is subject to the provisions of Section II below.”
“The products and materials indicated on a list drawn up by the authority may be Pledged by their owner under the conditions given in the present Chapter, not involving possession by the creditor.”
“Q. My question to you was simply: the court would try to make their intention effective, wouldn't it? A. I think so. And their intention was to enter into a valid 378 pledge, you are right. But there is a reason for that. The reason is that the pledge covered by article 378 gives a protection to the parties. The conditions are very strict, whether on the matters that are covered by this pledge or in the identification of the nature, the quantity and, you know, all those are legal requirements. The fact that the parties want to enter into a pledge covered and governed by those provisions rather than doing common law pledge governed by DOC articles, this is the intention of the parties. This is my opinion.”
“Order of the director of finance dated20 July 1951 relating to the enforcement of the Dahir of20 March 1951 governing the pledge of certain products and materials THE DIRECTOR OF FINANCES, … Having regard to the Dahir of 20 March governing the pledge of certain products and materials and notably its first article. THE DIRECTOR OF FINANCES, … ORDERS: 191. SOLE Article. – The provisions of the aforementioned Dahir of20 March 1951 shall apply to loans granted on the products and materials indicated below 192. Raw sugar; 193. Tin plate; 194. Cellulose pulp; 195. Raw bovine hides; 196. Raw cotton, cotton yarn; 197. Wool in bulk and woollen yarns; 198. Raw jute; 199. Hemp; 200. Raw and yarn fibranne and rayon; 201. Seeds, oleaginous fruits and crude vegetal oils; 202. Cocoa; 203. Alfa; 204. Mining products; 205. Petroleum products and lubricants; 206. Steel products and non-ferrous metals; 207. Raw rubber; 208. Plasticisers; 209. Refractory soil; 210. Canned fish or fruit.”
“However, Article 381 of the Commercial Code did not institute any penalty for the failure to register the mortgage in the special register prepared for that purpose at the clerk’s office of the court in whose jurisdiction the mortgaged products and materials are located. Indeed, the failure to register or define [sic: typo: renew] the mortgage in the special register results in the mortgage creditor losing its priority status among creditors. When explaining its decision, the court stated that: “While this case pertains to a mortgage on products without a transfer of possession, the file contains no evidence indicating that this mortgage was registered in the special register prepared for that purpose at the court in accordance with the provisions of Article 381 of the Commercial Code. Having said that, the Legislation did not institute any penalty for violating these requirements... In addition, the failure to make or renew this registration does not cause the creditor to lose its status as a mortgage creditor. This is because these procedures guarantee the mortgage creditor a priority status among the rest of the creditors.”
“In our judgment the following extracts from the notes in Dicey accurately set out the relevant aspects of English law in regard to the proof of a foreign law:- 1. An English Court will not conduct its own researches into foreign law – see Di Sora v. Phillips (1863) 10 HLC 624 per Lord Chelmsford at 640:- “It seems, however, rather questionable whether the Judge has a right to resort to the foreign law itself for information when the evidence of the witnesses is not satisfactory to his mind. The witnesses are at liberty to adduce, in support or confirmation of their testimony, text books, decisions of foreign courts, or rather authorities, which, becoming a part of their evidence, may enable the Judge to form his own opinion upon the particular text of foreign law thus laid before him. But it seems contrary to the nature of the proof required in these cases, that the Judge should be at liberty to search for himself into the sources of knowledge from which the witnesses have drawn, and produce for himself the fact which is required to be proved as a part of the case before him. As my noble and learned friend, Lord Brougham, said in the Sussex Peerage Case (11 Clark and F.115) “the judge has not organs to know and to deal with the text of the foreign law, and therefore requires the assistance of a lawyer who knows how to interpret it'.” 2. If the evidence of expert witnesses conflicts as to the effect of the foreign sources, the court is entitled, and indeed bound, to look at those sources in order itself to decide between the conflicting testimony. See Earl Nelson v. Lord Bridport (supra) per Lord Langdale M.R. at page 537:- “Such I conceive to be the general rule; but the cases to which it is applicable admit of great variety. Though a knowledge of foreign law is not to be imputed to the judge, you may impute to him such a knowledge of the general art of reasoning as will enable him, with the assistance of the Bar, to discover where fallacies are probably concealed, and in what cases he ought to require testimony more or less strict. If the utmost strictness were required in every case, justice might often have to stand still; and I am not disposed to say, that there may not be cases, in which the Judge may, without impropriety, take upon himself to construe the words of a foreign law, and determine their application to the case in question, especially, if there should be a variance or want of clearness in the testimony.”
“49. Reasonable as that approach might be in the eyes of an English lawyer, there was no evidence to support it. It was contradicted by the evidence of Mr Alissa [the defendant’s expert]: whose view was that the change had been introduced to meet the case where the employment relation was terminated prior to the contractual term of the contract. And, as the judge recognised (at paragraph [81] of his judgment) Professor Amkhan [the claimant’s expert] gave no direct evidence on the point. His view, which the judge did not accept, was that, on the facts, the contractual term had continued throughout the period of ex gratia payments: (transcript,16 December 2008 , pages 117–121, 124). On the question what meaning should be given to the phrase “work relation” in article 222(1), he went no further than to confirm (as article 4 of the Law provided in terms) that Labour Law “had to be interpreted and implemented in accordance with Shari'ah law.”
“… the provisions of the … DOC, specifically the provisions of Articles 1170 et seq. relating to the ordinary pledge can be supplementary in certain conditions with the “commercial” pledge when the special law being the Code of Commerce is unclear or silent in certain points of law …” (Joint Memorandum § 11) “… Articles 1170 et seq. of the DOC, and in particular Articles 1174 et seq. of the DOC are applicable to the Pledge Agreement …” (Joint Memorandum § 13) “The legislator … affirmed in [Code of Commerce Article 2] that civil law applies to commercial matters where there is no contradiction.” (2nd report § 6.6) “6.7. Based on the above, the Moroccan law (DOC with effect from August 12, 1913 and the code of Commerce with effect from October 3, 1996) recognises only two type of pledges: (1) Commercial pledges without dispossession of the pledgor with two different modes: (i) the pledge over tools and equipment (“Nantissement de l’outillage et du material d’èquipement”) from Article 355 to 377 of the Code of Commerce … and (ii) the pledge over certain products and materials (“nantissement de certains produits et matières”) from Article 378 et seq of the Code of Commerce …. In addition, Articles 1170 to 1183 of DOC are the general principles applicable to a pledge and are therefore applicable to commercial pledges without dispossession of the pledger, provided they do not also contradict the specific Code of Commerce provisions detailed above. (2) Commercial pledges with dispossession of the pledgor(Articles 337-354 of the Code of Commerce … and in addition, Articles 1184 – 1240 of DOC … are applicable to this form of pledge (as those provisions specifically apply to the “gage” i.e. a pledge with dispossession), again on the basis they do not contradict the specific Code of Commerce provisions detailed above. 6.8. As such and in both types of pledge, the provisions of DOC (the Moroccan civil law) are applicable insofar as those provisions do not contradict the specific provisions in the Code of Commerce (the Moroccan special law). More generally, where a Moroccan special law (as is the Code of Commerce) is silent or unclear on a matter of law, such discrepancies are resolved by referring to the “droit commun” (i.e. the civil law, which in this case is DOC). DOC regulates general principles of contract (in Articles 1 – 478) and also “named contracts” (in Articles 479 – 1250), and these “named contracts” include the pledge contract.” (2nd report §§ 6.7 and 6.8) “… in reference to Moroccan law reasoning, when a special law as the Code of Commerce is lacking of any clear provision, it is necessary to refer to the common reference law which is DOC.” (2nd report § 8.1) “9.1. SFF considers that the absence of a list referred to in Article 378 of the Code of Commerce means that any pledge granted pursuant to that Article is invalid (Joint Memorandum, paragraph 14). I do not agree. SFF’s analysis would lead to an absurd result or it would render Moroccan law ineffective. 9.2. The reasoning to follow in order to respond to an issue which is not regulated by the special law (i.e. the Code of Commerce) is to search whether the civil law (i.e. DOC) addresses precisely or through a general principle such an issue. 9.3. The objective analysis in respect this issue by which effectively the 1951 list of products has been repealed by the Code of Commerce is to read and refer to Article 2 of the Code of Commerce and Article 1174 of the DOC. Those two aforesaid articles from the Code of Commerce and DOC are totally complementary and not contradictory. They provide for the legal solution to a simple administrative default in providing for a list of goods and products being wrongly viewed by SFF as a legal issue with the consequence of the invalidity of the Pledge. 9.4. It is important to note that the 1951 list no longer applies, but the goods and products may nevertheless be validly pledged under Article 378 of the Commerce Code because Article 1174 of DOC provides that anything that can be validly sold can be pledged. Therefore, in the absence of a list, any goods or products may be subject to a pledge under Article 378 of the Commercial Code. I should point out that the title of Article 378 is named “Le Nantissement de certains produits et matières” (which translates as “the pledge of certain products and materials”) and also that Articles 386, 388 refer to the wording “marchandises” which means that there is no limited reference to products and materials knowing that the word “marchandise” is large and it may refer to any kind of goods which could be construed as being commercially dealt with.”
“Q. ... Now, you have not, Mr Hajji, identified any judicial case or any textbook authority for that opinion, have you, in your report? A. No, sir, but I always refer to the principle of Moroccan law which is the same as the French law, is that when the special law, as the commercial law is missing or is not fully -- I mean fully detailed in respect, the implementation of a form of contract has been pledged over goods and products, one necessarily has to go to the reference law, the DOC, which is called le droit commun, the common law in Moroccan law.” “A. … To me, the reference to 1174 of the DOC reflects of a lawyer, any lawyer in Morocco, when a special law is missing any details with respect, the implementation of the same special law, one necessarily refers to the general principle of law which are contained in the DOC.” “Q. Therefore if the Commercial Code requires that in order to qualify under article 378, the product or material must appear on a list, then that specific requirement must be complied with, does it not? You can't look back to some general provision -- A. In Morocco, it is our reflex. When we do not find a solution for one point…" “A. It is our normal resolute in Morocco as I told you. When we do not have a response under the law, what do we do? We just break and we do nothing, or we try to find out what is the reference law saying, or providing, in respect one question which has no answer within this special law, as the Commercial Code.”
“The pledge constituted whether by a trader, or by a non-trader as a commercial act, is governed by the general provisions of Articles 1184 to 1230 of the dahir of …12 August 1913 forming the code of obligations and contracts and the special provisions of the first section below. …”
“If the lawmakers made no reference to other provisions of the law for pledges of this kind, it is my opinion that such other provisions do not apply … otherwise, why would lawmakers have introduced a special form of pledge governed by special (and specific) provisions?”
“Under Moroccan law, there is a general distinction between “non-professionals” (to which the D.O.C. only applies) and “professionals” (to which both the D.O.C. and the Code of Commerce apply, the provisions of the Code of Commerce superseding the provisions of the D.O.C. having the same purpose: see above paragraph 12). In the case at hand, as the parties acted as professionals, the Code of Commerce is applicable and, in the absence of provisions of the Code of Commerce, the D.O.C. is applicable. I assume that that is the reason why the parties intended to implement a pledge governed by the Code of Commerce (Article 378 et seq.) and not the DOC.”
“Q. … You can see in article 2 the reference to civil law which we agreed encompasses the DOC. Article 2 doesn't say that civil law applies only where it is expressly referred to in the Commercial Code; it says that civil law applies insofar as it does not contradict the basic principles? A. Exactly. So when they complement the Commercial Code, they can be applied. But when they deal with the same topics, they cannot apply because they contradict the Commercial Code. When the Commercial Code says that the pledge over certain materials and projects -- projects and materials are valid only with a list, you cannot go to the DOC and say: oh no, the pledge can be given over any materials. That is what I am saying. It is a contradiction.” “Q. So there is only one principle in play here, not two, because before we had contradiction and a necessity to crossrefer, but I think you are agreeing with me now that really it just all boils down to the absence of contradiction? A. Okay, I agree with you.”
“Nevertheless, the pledging of a future, random object or an object which is not in our possession is considered valid; however, this pledge only confers on the creditor the right to demand delivery of the objects subject to the contract, as soon as this delivery can be made.”
"Everything that may be validly sold may be subject to a pledge."
"Nevertheless, the pledging of a future random object or an object which is not in our possession is considered valid. However, this pledge only confers on the creditor the right to demand delivery of the objects subject to the contract as soon as this delivery can be made."
"However, this pledge only confers on the creditor the right to demand delivery of the object."
“Q. As we discussed a moment ago, article 378 is one of two exceptions to the principle that pledges over movable, tangible assets are to be made by dispossessing the pledgor; we agreed that a moment ago? A. Correct. Q. Do you agree that as it is an exception, it is appropriate to interpret article 378 strictly? A. I would say yes. Yes, I confirm.”
“MR JUSTICE HENSHAW: Just before you leave that topic, are you saying that where parties have entered into a pledge, or tried to enter into a pledge, referring to article 378 and following, and if those articles simply don't apply because there is no list, that the pledge cannot take effect as a common law pledge under the DOC? A. Yes, my Lord. MR JUSTICE HENSHAW: Is that conclusion based on the legislation, or is that based on your interpretation of the parties' intention? A. This is my interpretation of article 2 of the DOC … What I am saying is that the parties have decided to enter into a pledge agreement governed by articles 378 which provides that a list must be -- you know, that the pledge must be granted over products, you know, listed in a list. The fact that there is no list and we have the DOC apply for exactly the same topic, for me that means that there is a contradiction. The DOC says that we can enter into a pledge agreement over any products that can be sold. And the Commercial Court says that we have to give -- grant a pledge over materials listed in our list. So for me, there is a contradiction on those two articles, and it is too easy to save an invalid pledge, where it was the intention of the parties to be covered and protected by this pledge, to say: okay, it is invalid in Commercial Code, let's ignore the articles 378 and have the DOC applied. This is dangerous, my Lord, because that means that when the parties want to be protected by certain provisions that are strict, we can then save it and have it apply with other provisions that are, in my view and my opinion, contradictory to the Commercial Code. MR JUSTICE HENSHAW: Thank you. If there is no list, how do we know whether any particular pledge would have fallen within article 378 or not? A. Sorry, I cannot understand -- MR JUSTICE HENSHAW: If there is no list that tells you which types of goods article 378 applies to, then how do we know whether any given pledge, such as this pledge, is one that would have been subject to those provisions. A. This is a very good question, my Lord. This is exactly a question that I questioned myself. There is the intention of the parties, a will of the parties to enter into a 378 pledge, probably based on a previous list, because it was non-ferrous metals, but their intention was to enter into this pledge because it is a pledge that gives protection. And with very strict conditions on nature, quantity, and the fact -- and because the previous -- I mean, certain products and materials that are supposed to be precious or with high value, and the parties wanted to enter into this agreement to receive the protection of that pledge. That is what I am saying. If you are going and -- and pretend that the pledge can be saved by the DOC agreement, then the parties do not receive the same protection. This is one thing, and the second thing, all the DOC provisions which apply to pledges are only applied to pledges with the possession. So it is very difficult to save the pledge with other articles that cover pledges with different nature. MR JUSTICE HENSHAW: Thank you.”
“The function of the expert witness in relation to the interpretation of foreign statutes must be contrasted with his function in relation to the construction of foreign documents. Inthe former case, the expert tells the court what the statute means,explaining his opinion, if necessary, by reference to foreign rulesof construction. In the latter case, the expert merely proves the foreign rules of construction, and the court itself, in light of these rules, determines the meaning of the documents”
“An English court will not conduct its own researches into foreign law; in the common law system, “the trial is not an inquisition into the content of relevant foreign law any more than it is an inquisition into other factual issues that the parties tender for decision by the court”
"This document must indicate [a number of things]."
“Facilitation of the constitution of movable securities: The draft law harmonised and simplified the rules applied to the regime of movable securities without dispossession (the pledge) enabling debtors to grant movable securities over all their assets, including those that are useful to their activity …” and explained that the new law: i) “instruments [“consacre”] the option to pledge future things”
“[Vallis] shall indemnify SCIPION and keep SCIPION fully indemnified against all losses, damages, liabilities, costs (including all legal costs on a solicitors-and-clients’ basis) and/or expenses of any nature whatsoever, howsoever incurred or sustained by SCIPION arising out of or in connection with any default by [Vallis] in either failing to provide the services in conformity with the provisions of [the CMA]…”
“… as a result of or arising out of or in connection with the performance or non-performance of the Contract”
“The cost of preparing (stripping) the cable for transit however would involve another 10-20% deduction, so that total offer is approximately US$3,840 per mt, equating to an offer of approximately US$75,000 to US$100,000 .” and, with reference to both this proposal and the July 2019 proposal discussed below, added: “Neither of these sales has yet been advanced any further on the basis that [Scipion] hopes to receive a better price.”
“A. … We were very excited when we saw this. In fact, this was an introduction to Scipion by myself so I was more excited than most, actually, but they were good enough to actually go out to Morocco and send a technical person out from China, actually, to go and inspect the site and look at the quality. But once they did that, the inevitable horse trading began, and it became very clear that they had quality issues with the stock, they were expecting Scipion to -- well, their hope was that Scipion would finance the acquisition of the stock by themselves, which of course was not appealing to us. They expected Scipion to bear the cost of delivery of the stock, so freight and insurance and whatever the processing, ie bagging costs etc that would be incurred. Scipion to bear all that cost all the way to the Philippines which is a known risky jurisdiction, with a balloon payment of 95% of the price on delivery in the Philippines. … The processing costs will be higher because we require the cooperation of Mac Z/Adnane Lamdouar to procure an export permit for this material, which is not assured because there is a restriction on export of unprocessed Maroc Telecom because of environmental issues. I think this whole discussion is a completely moot point. I think unless the telecom is processed, stripped, granulated in country, you will not get it out of the country. I think it is a completely moot point. So these discussions -- and they were nothing more than discussions, they were not a firm offer, they were an indicative offer -- with this Intramex crowd would have inevitably fallen over. … So my position, not as a commercial person, but as someone who distils information from commercial people in my team, is that this offer was fantasy. It would never have arrived. We would no doubt have sold this stock in the Philippines and run the very grave risk that the stock goes missing and we receive 5%, and I would be sitting here today, having this discussion, saying: why have we been so neglectful with valuable stock that could have been sold for a better price, for the money, and to reduce the loss of your client.”
“Q. And that would -- when you take into account transport, that would get you$864,000 -odd? A. Yes, it looks good on its face, but it faces the same problems, sir, because this is delivery at Lyon, so we would have all the costs of delivery at Lyon, and all the risks associated with that. Q. You have taken into account transport cost of$3,000 per truck. So that is taken into account. A. I am sure there will be other transport costs, sir, and then there will be insurance. And then there will be -- I do not recall the balloon payment was as severe on this one, but it was still payment on delivery. Again, it is a completely moot point because unprocessed Maroc Telecom cannot be exported”
“A. I think what you see in my witness statement is that we have tried to mitigate the position by my second trip to Morocco in April -- Q. April which year? A. 2018. I went along to see His Excellency Thomas Reilly, the UK ambassador to Morocco, to explain the predicament that we have. Q. Just pausing there, April 2018 would be what, that is almost 20 months ago? A. Absolutely. He is a busy guy so we don't get a regular audience, but we put it on his radar that we have this difficulty of getting this stock, which is very low-grade stock that requires a lot of processing, out of the country to try to monetise it. We explained the difficulty and it was, you know, we have done what we can to get around the legal regime that exists in Morocco.”
“The Maroc Telecom Cable stock is sold domestically and is valued at a lower percentage of 30% of the LME price. This is because the stock is not homogenous, the cables are very difficult to strip and the stock is mixed with iron and other hazardous materials. Maroc Telecom Cable stock is not exported so I have only provided the domestic value in this report.”
“The Maroc telecom stock is not homogenous. The cables are mixed with aluminium and steel which makes more difficult the process to stripped them. I understand that the best quality cables from the initial stock were already stripped and consumed and the worst quality is what is remaining in the current stock. Scipion has sent me two offers they have received for those cables. These offers of$885 per MT and LME minus 1500 or 1600 are in line with my estimations. Miss Lesley Campbell is correctly benchmarking the price of this type of cable to the prices for similar quality in USA. However I don’t think that prices in USA can apply to prices in Moroccan Market. In the local Market, as well as the offers Scipion has received, I have made confidential enquiries which confirm the prices are in line with my value estimation. I also noticed that in order to be exported this material needs an export licence which is not easy to obtain. From the offers Scipion has received and my confidential enquiries, the cargo appears to be perceived in the Market as a distress cargo, so it has a further discount. Plus there is also the freight cost, finance cost, logistic costs, and cost of Insurance to be included in order to export this material (assuming it can be exported.”
“the 30% takes into account the potential loss because you can be in a situation where, for example, you have in this case 400 tonnes of copper, but when you process it you have losses in the process. When you melt that copper, you put this copper on the furnace, you make 3, 5, 6% losses and that has to be included in the 30% which is the processing cost.”
“I believe this is reasonable for a utility-grade telecommunications cable as it corresponds to my observations of bilateral contracts in the industry”
“In the event of bulk product, there shall be an exemption of all claims for the first 3 (three) per cent of the total quantity of product held in any one warehouse at any one time and, notwithstanding any other terms in [the CMA], [Vallis] shall not be liable for any indirect or consequential damages, including damages for loss of profits, incurred by [Mac Z], whether in contract or tort.”