Cassation Court 

 

Civil and Commercial Circuit – No. 84/2009

Session Date: 8 December 2009

Appeal by Cassation No. 84 of 2009 – civil appeal by cassation

(1) Commercial business “commercial agency: commercial agent: what is not considered as such” – contract “contract of agency” – agency “commercial agency”..

The commercial agent – his nature – S. 2 of Law No 8 of 2002 on the Regulation of Commercial Agencies Business – protection of the agent regarding authorised business – its prerequisite – that there should be an agency by virtue of a contract which satisfies all its essential requirements, and the occurrence of infringement by a third party exercising an activity within the exclusive authority of the agent – failure of such requirement – its effect – considering such activity permissible for any person to exercise.

(3, 2) Cassation “reasons of an appeal by cassation: irrelevant reasons, vague reasons” – judgment “its reasoning: what does not render it defective: reasons in excess” “appealing a judgment by way of cassation: reasons of appeal by cassation”.

(2) Where a judgment is based on more than one ground and one of such grounds is sufficient in support – if considered otherwise defective – if valid – irrelevant.

(3) That a statement of appeal by cassation should include a statement of reasons of such appeal – S. 4 of Law No 12 of 2005 on Appeal by Cassation in Civil Matters – its effect – that the reasons of such appeal be specified and defined so clearly as to reveal the intention behind them, negate any ambiguity or vagueness, and reveal the defect related by the appellant to the judgment appealed by cassation, including its position in such appeal and its effect on the jurisprudence of the judgment – failure so to define – vague and inadmissible contention.
 

1- The definition of ‘agent’ is, according to Section 2 of Law No 8 of 2002 on the Regulation of Commercial Agencies Business, “whoever is exclusively licensed to distribute goods or services, or offer them for sale or exchange, or any technical service within the scope of the agency on behalf of his principal for consideration”. According to this definition, the basis for the protection of an agent against being competed in the business he is licensed for is the existence of an agency by virtue of a contract of agency that satisfies its requirements, and the occurrence of an infringement upon such agency by a third party exercising the activity exclusively authorised for the agent to do under such contract of agency, through the distribution of the agency goods or offering them for sale or exchange. If no agency exists, such activity would be permissible for any person to exercise.

2- It is established jurisprudence of this Court that where a judgment, which is based on more than one ground and one of such grounds is by itself sufficient to support such judgment, is considered defective on the basis of another ground, assuming the validity of such ground, such consideration would be irrelevant. The conviction of the judgment appealed against by cassation, assuming the First and second Respondents were managing directors responsible for the Appellant Company, that the acquirement by the Third Respondent Company of the agency for (…) company took place after the said company had cancelled the Appellant’s agency. It accordingly denied compensation in favour of such company. The Appellant failed to contend against such basis of the judgment’s jurisprudence, as aforesaid, which was alone sufficient to support such judgment. Therefore, to consider such judgment as defective based on this reason, regardless of the aspect of opinion involved, must be irrelevant and, accordingly, inadmissible.

3- It is established jurisprudence of this Court that Section 4 of the :aw No 12 of 2005 on Appeal by Cassation in Civil Matters, by providing that a statement of appeal by cassation shall include a statement of the reasons on which such appeal is based, intends by such provision that such appeal be specified and defined so revealingly clear as to expose the intention behind such reasons, negate any ambiguity or vagueness, and reveal the defect related by the appellant to the judgment appealed by cassation, including its position in such appeal and its impact on the jurisprudence of such judgment. Accordingly, any reason intended for appeal by cassation must be accurately defined. Since the Appellant has failed to state in the appeal statement, as part of its contention under this reason, the positions of defect in the expert’s report which was included in his objection to such report, and the impact of the terms of the memorandum of association of (…) Establishment on the conclusions of the judgment and the reasons relied upon for requiring the appointment of a three-man experts committee, and further failed to refer to the documents for which it applied that the claim be returned back for litigation, and the impact of all the aforesaid on the jurisprudence of the judgment appealed against by cassation. Accordingly, contention against such judgment, under this reason, becomes vague and, therefore, inadmissible.

Having reviewed the documents, and having heard the report read out by the Judge-Rapporteur, and heard the submissions, and after the deliberations;

Whereas the appeal by cassation has satisfied its formalities;
 

The facts, as revealed in the judgment appealed by cassation and other documents, may be summed up as follows. The Appellant Company brought against the First and Second Respondents the claim No 1591/2005 – civil – general – applying for a judgment ordering the Respondents to pay to it the amount of 146,111,059 Riyals in compensation for damages sustained, in addition to profits accruing from the importation of cars from Syria, and the profit from (…) car. It stated that the First and Second Respondents were partners in (…) Establishment, which owned the Appellant Company, and that they violated the terms of the company memorandum of association by establishing the two, Third and Fourth, Respondent Companies. The Appellant introduced the two companies to the claim for their exercising of activities commensurate to its own while they acted as managing directors in the company, in violation of the terms of the company memorandum of association as unlawful competition. It accordingly brought the claim. The court appointed an expert who submitted his report, and it issued a judgment dismissing the claim. The Appellant lodged an appeal No 598/2008, and the court issued a judgment confirming the appealed judgment. The Appellant then lodged against such judgment an appeal by cassation, which was presented before this Court, at the deliberations chamber, where it fixed a session for its consideration.
 

This appeal by cassation is based on four reasons. In the third reason, the Appellant contends against the judgment appealed against that it involved bad argumentation and contradiction of documentary evidence. It states that the said judgment, in relation to the bases of its jurisprudence, held that assuming the First and second Respondents were managing directors responsible for the Appellant Company, it has been documentarily established the (..) company has acquired an agency for (…) cars after the cancellation by (…) company of the Appellant Company’s agency as of 30.9.2005, for stated reasons not including the acquirement by the (…) company of the agency. This was so despite that the Appellant raised evidence to establish that the Respondents endeavoured to get its agency cancelled, and acquiring it immediately after such cancellation, in addition to other faults, causing gross losses that entail application for compensation. The judgment appealed against by cassation concluded by rejecting such application, which renders it defective and worthy of cassation.
 

This contention is inappropriate. The definition of ‘agent’ is, according to Section 2 of Law No 8 of 2002 on the Regulation of Commercial Agencies Business, “whoever is exclusively licensed to distribute goods or services, or offer them for sale or exchange, or any technical service within the scope of the agency on behalf of his principal for consideration”. According to this definition, the basis for the protection of an agent against being competed in the business he is licensed for is the existence of an agency by virtue of a contract of agency that satisfies its requirements, and the occurrence of an infringement upon such agency by a third party exercising the activity exclusively authorised for the agent to do under such contract of agency, through the distribution of the agency goods or offering them for sale or exchange. If no agency exists, such activity would be permissible for any person to exercise. It has been established in the attachments of the expert’s report that the (...) Cars Company had terminated the agency contracted with the Appellant Company, by virtue of its letter dated 30.3.2005, sent to its Chairperson of the Board of Directors, and including that the actual termination date was the end of March 2005, with six-months period of grace for arrangements relating to the consequences of the agency termination. Further, the conclusion of the Third Respondent’s agency took place on 1.10.2005. The Appellant Company thereby lost the capacity of agent and was prevented from exercising what was exclusively licensed for it to exercise under the agency contract. It could not, accordingly, confront the Respondents on the basis that their acquirement of such agency amounted to unlawful competition and a damaging act that entails liability to compensate, or the restriction provided under Section 529 of the Civil Law and section 29 of the Commercial Companies Law No 5 of 2002. The judgement appealed against by cassation founded its jurisprudence, in confirming the judgment of the first instance court which dismissed the claim, on the basis that the acquirement by the Fourth Respondent did not prove its exercise of any activity since its establishment. It accordingly rejected the compensation application. The said judgment has therefore followed proper law, and the contention becomes inappropriate.
 

In the first and second reasons, the Appellant contends against the judgment appealed against by cassation that it erred in the application of the law. It stated that such judgment concluded that the First and Second Respondents were not managing directors of the Appellant Company, based on the memorandum of association of (...) and Sons Establishment which, upon the death of their deceased person, became a de facto company of the heirs inter se, thereby preventing the application of the memorandum of association. Rather, the memorandum of association of the Appellant Company should have been applied, and the restriction included therein, which corresponds with Section 529 of the Civil Law and Section 29 of the Commercial Companies Law relating to a general restriction on partners against competing the company in its activity. Since the Respondent was an executive director of the Appellant Company, the judgment becomes defective, and worthy of cassation.

This contention is inappropriate. It is established jurisprudence of this Court that whenever a judgment is based on more than one ground and one of such grounds is by itself sufficient to support such judgment, is considered defective on the basis of another ground, assuming the validity of such ground, such consideration would be irrelevant. The conviction of the judgment appealed against by cassation, assuming the First and second Respondents were managing directors responsible for the Appellant Company, that the acquirement by the Third Respondent Company of the agency for (…) company took place after the said company had cancelled the Appellant’s agency. It accordingly denied compensation in favour of such company. The Appellant failed to contend against such basis of the judgment’s jurisprudence, as aforesaid, which was alone sufficient to support such judgment. Therefore, to consider such judgment as defective based on this reason, regardless of the aspect of opinion involved, must be irrelevant and, accordingly, inadmissible.

In the fourth reason, the Appellant contends against the judgment its inclusion of insufficient reasoning, by failing to respond to the insufficient response by the first instance court’s judgment to the Respondents’ faults which it reiterated, and that it relied on a defective expert report, and failed to rely on the provisions of the Civil Law, nor to apply Section 8 of the memorandum of association of (...) Establishment, in addition to disregarding its application to appoint a three-man expert committee and the application to return back the claim for litigation due to the existence of important documents.

This contention is inappropriate. It is established jurisprudence of this Court that Section 4 of the Law No 12 of 2005 on Appeal by Cassation in Civil Matters, by providing that a statement of appeal by cassation shall include a statement of the reasons on which such appeal is based, intends by such provision that such appeal be specified and defined so revealingly clear as to expose the intention behind such reasons, negate any ambiguity or vagueness, and reveal the defect related by the appellant to the judgment appealed by cassation, including its position in such appeal and its impact on the jurisprudence of such judgment. Accordingly, any reason intended for appeal by cassation must be accurately defined. Since the Appellant has failed to state in the appeal statement, as part of its contention under this reason, the positions of defect in the expert’s report which was included in his objection to such report, and the impact of the terms of the memorandum of association of (…) Establishment on the conclusions of the judgment and the reasons relied upon for requiring the appointment of a three-man experts committee, and further failed to refer to the documents for which it applied that the claim be returned back for litigation, and the impact of all the aforesaid on the jurisprudence of the judgment appealed against by cassation. Accordingly, contention against such judgment, under this reason, becomes vague and, therefore, inadmissible.

According to the aforesaid, this appeal by cassation should be dismissed.