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According to Technip, since Technip and Coflexip are both registered in France and the takeover of Coflexip by Technip also took place in France, the applicable law is French. In terms of French Law, according to Technip, there was no control of Coflexip by Technip in April, 2000 and as such there was no change in control of SEAMEC on that date but in July 2001. It is further submitted that in any event Regulation 12 did not apply to the takeover because SEAMEC was not the target company and that while taking over Coflexip, Technip neither had the common objective nor was there any agreement between Technip and Coflexip with regard to SEAMEC. The rate of interest has also been challenged. It is said that although there was no challenge to the rate which was fixed by SEBI, if the Tribunal's order is upheld, then the impact of interest would be much greater. It is submitted that in any event, the dividend paid must be adjusted against the interest claimed. It is the final submission of Technip that if April 2000 is to be taken as the date of control, then only those shareholders who were shareholders of SEAMEC on the specified date and continued as such till the offer was made are entitled to the benefit of the Tribunal's order. A separate appeal has been preferred by IFP from the decision of the Tribunal being CA No.10092/98. The grievance of IFP is that it is a professional body created by decree of the French Government and has been set up as a centre for research and industrial development, education, professional training and information for the oil and gas and automotive industries in France. IFP does not carry on any industry or commercial activities nor does it manage or control any listed company. It promotes companies to apply the results of its own research. IFP says that an unnecessary stigma has been cast by the Tribunal's decision on a Government organization even though the show cause notice issued by SEBI did not make any allegation against IFP.

The difference between the French law and their regulations relates to the prescribed limits of share holding for control by one company over another. This cannot conceivably make the French law violative of any public policy underlying the Acts and Regulations so as to persuade us to disregard the French Law.

Thus it is the French law which we must apply to decide whether Technip took over the control of Coflexip in April 2000 or July 2001. Incidentally, the opinions of various persons claiming to be experts in French Commercial Law have expressed diametrically opposing views as to whether Technip could be said to have taken control of Coflexip applying the relevant French law, in April 2000. We do not propose to rely upon either of the views expressed as none of them was subjected to cross examination. According to Technip their expert affirmed an affidavit and was offered for cross examination by SEBI and that SEBI declined to do so. But the affidavit unlike the opinion expressed by the same firm earlier to Technip on 15th November 2001 did not express any opinion as to whether Technip did or did not acquire control of Coflexip either in April or July 2001 but only gave evidence of the applicable French law and highlighted the consequences of failure to comply with the statement of intent which was required to be filed with CMF. Therefore, ultimately it is for this Court to resolve the conflict by looking at the admitted text of the French law and the material on record to decide the proper application of the provisions. According to the show cause notice issued by SEBI to Technip, Technip had acquired control of Coflexip by acting in concert with ISIS. Technip has said that in April, 2000 there was no concept of acting in concert under French Law since the extended meaning of 'controlled company' was introduced by amendment to Article 355-1 only in May, 2001. The submission ignores Article 356-1. The concept of a takeover by acting in concert was there in 2000. In fact Article 355-1 of the French Companies Act merely sets out factors determining when a company could be said to hold control over another. It does not, as Article 356.1 does, speak of the method for acquiring such control. At this stage and before we apply the law to the facts we may note one aspect that has been lost sight of by SAT and that is that irrespective of the status of Coflexip and Technip to each other, in order to trigger Regulations 10 to 12, it would have to be established that the purchase of the 29.68% shares by Technip in Coflexip was with the object of taking control of SEAMEC. That is what the relevant Regulations provide and also what is alleged in the Show Cause Notice issued to Technip by SEBI. The allegation in the show cause notice was that Technip, the acquirer and ISIS as a shareholder of Coflexip acted in concert to acquire control over Coflexip and therefore SEAMEC treating SEAMEC as the target company. The emphasis is on the target company whether the case is of direct or indirect acquisition under the Regulations. Thus Regulation 2(b) of the Regulations defines 'acquirer' as meaning any person who, directly or indirectly, acquires or agrees to acquire shares or voting rights in the target company and 'acquirer' also means a person who acquire or agrees to acquire control over the target company either by himself or with any person acting in concert with the acquirer.

On 31st March, 2000, Stena offered to sell its shares in Coflexip held by it and its associates J.P. Morgan, being 29.7% of the shareholding of Coflexip, to Technip. ISIS had three representatives on Coflexip's Board of 11 Directors, who also had two Directors in Technip. On 7th April, 2000, the Board of Technip approved the deal with Stena to purchase its 29.68% shares in Coflexip. ISIS and Elf abstained from voting as they were shareholders in both Coflexip and Technip.

On 11th April, 2000, several events took place. ISIS wrote a letter to Stena renouncing its preemptive rights under the shareholders agreement in favour of Technip. There is no binding that it would have been financially possible for ISIS to have exercised its preemptive rights given the financial implications particularly the necessity to make a further public offer to purchase the balance shares of Coflexip as it would have crossed the threshold as prescribed under French Law. On the same date Elf also renounced its preemptive rights under the shareholders agreement in favour of Technip. An agreement was then entered into between Technip and Stena for the acquisition of Stena's 29.68% shares in Coflexip at the rate of Euros 119 per share. Statements of intent were filed by Technip with Stock Exchange Authorities and with Coflexip. Coflexip in turn wrote a letter to Technip on the same date agreeing not to acquire equity shares in a competing company without prior written consent of Technip. The declaration required by French law was made to the CMF by Technip on 28th April, 2000 that Technip.

Technip has argued that the effect of the purchase of the Stena's shares was merely a strategic alliance between Coflexip and Technip and Technip did not control Coflexip. On the other hand there was evidence of a possible acquisition of Technip by Coflexip. This position continued till January, 2001 when IFP agreed to sell its entire interest in ISIS to Technip. According to Technip and IFP this was the first time IFP had come into the picture.

In February, 2001 the Chairman of Coflexip expressed his reservation about the proposed sale of ISIS's shares in Coflexip to Technip. Coflexip continued to act independently of Technip with regard to various policy decisions. Technip offered to purchase the balance shares of Coflexip at a premium of 25% on 3rd July, 2001. The price offered by Technip was not immediately acceptable to the Board of Coflexip. A Special Committee was set up to consider whether the price was adequate. ISIS voted in favour of setting up of the committee. As it happened, the Special Committee recommended a higher price, so that the Technip had to improve its offer to purchase Coflexip's share. These facts according to Technip showed that ISIS was not acting in concert with Technip. Technip has said that the purchase of 100% shareholding was duly approved by Regulatory Authorities of USA, Finland and Netherlands and on 11th October, 2001 Technip acquired control of 99.04% of the share capital of ISIS and 98.36% of the share capital of Coflexip. Coflexip's shares were registered in the name of Technip on 19th October, 2001.