IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION

(CIVIL REVISIONAL JURISDICTION)

   Present:

Justice Md. Ashraful Kamal

Civil Revision No. 5029 of 2023

With

First Miscellaneous Appeal No. 216 of 2022

Designtex Knitware Limited

------Petitioner. -Versus-

The Edinburgh Woollen Mill (E.W.M.)

------Opposite party

(In Civil Revision No. 5029 of 2023)

The Edinburgh Woollen Mill (E.W.M.)

------Appellant -Versus-

Designtex Knitware Limited and others

------ For the respondents

(In F.M.A. No. 216 of 2022)

Mr. Imtiaz Moinul Islam, Advocate

------For the petitioner Mr. Faisal Al-Mahmud, Advocate with

Mr. Saddam Hossain, Advocate

------For the opposite party No.01

Mr. Md. Tazul Islam, Advocate

------For the opposite Party No. 5 Mr. Md. Monjur Alam, Deputy Attorney General

------For the state

( In Civil Revision No. 5029 of 2023)

Mr. Faisal Al-Mahmud, Advocate with Mr. Saddam Hossain, Advocate

------For the appellant Mr. Imtiaz Moinul Islam, Advocate

------For the respondents.

(In F.M.A. No. 216 of 2022)

Heard  on:  03.03.2024,  12.03.2024, 21.04.2024,  16.05.2024,  30.06.2024, 08.07.2024, and judgment on: 27.08.2024.

Md. Ashraful Kamal, J:

The  aforementioned  Civil  Revision  and  the  First  Miscellaneous Appeal were taken up together and disposed of by a single judgment as they involved common questions of fact and law.

Brief  facts  necessary  for  the  disposal  of  the  Civil  Revision  is  as follows:

The case of the Petitioner is that the Petitioner, along with seven other Plaintiffs, received purchase orders (POs) amounting to a total valuation of approximately USD 2,636,661.28 from UK-based buyer, Respondent No. 3, Peacocks  Stores  Limited,  to  manufacture  RMG  goods  for export.  Upon receipt of the aforementioned purchase orders, the Petitioner immediately procured raw materials, such as yarn and accessories, from various suppliers by  opening  several  Back-to-Back  L/Cs  from  the  Petitioner’s  lien  bank, Southeast  Bank  Limited,  Dhanmondi  Branch,  Dhaka,  Bangladesh. Thereafter, the Petitioner and the other Plaintiffs manufactured the garments as  per  the  instructions  of  Respondent  No.  1  and  shipped  all  the  RMG products  on  time,  receiving  part  payment.  Meanwhile,  Barclays  Bank (Respondent No. 8) provided a payment guarantee, but in reality, no such guarantee  was  established  as  per  international  commercial  transaction norms. Regrettably, Barclays Bank participated in this fraud by issuing a letter of maturity, delivered by post rather than by SWIFT messaging, the mandatory method of communication when a bank acts as the collecting bank under the Uniform Rules for Collections (URC) 522.

Barclays Bank PLC communicated acceptance by post to the banks of the Petitioner and other Plaintiffs, stating that the bill relating to the claim of the Petitioner and other Plaintiffs had been accepted for maturity on various dates. However, the Petitioner did not receive any payment from Respondent No.  3,  Peacocks  Stores  Limited.  Subsequently,  the  Petitioner  and  other Plaintiffs vigorously pursued payment from Respondent No. 1, the buyer’s Dhaka Liaison Office. In all these instances, they were given assurances that payment would be forthcoming. However, after waiting for a considerable period, these assurances ultimately proved fruitless.

The Petitioner and other Plaintiffs also pursued the matter over the phone with Peacocks' representatives at their UK office. At this stage, Mr. Karthic  of  Peacocks'  Dhaka  Liaison  Office  communicated  with  the Petitioner and other Plaintiffs via email, asking them to send the original shipping documents to the buyer’s bank, Barclays Bank PLC, stating that Barclays Bank PLC, UK would take responsibility for the payment of the export bills. The Petitioner and other Plaintiffs, relying on this assurance, sent the shipping documents to Barclays Bank PLC, UK. After receiving the documents, Barclays Bank PLC, UK released them to Respondents No. 1 to 7, who took possession and ownership of the RMG goods without making any payment. All the payment due dates have since expired, the last being on 11.01.2021, but the Petitioner and the other Plaintiffs remain unpaid by Respondents No. 1 to 7.

In November 2020, EWM Group declared that Peacocks had entered “administration” due to its inability to pay its creditors. It is pertinent to note here that EWM Group reported a substantial profit of GBP 24.3 million (equivalent  to  BDT  3,685,850,000  at  BDT  148.50  per  GBP)  as  of 02.03.2019 and had a cash balance of GBP 117.8 million (equivalent to BDT 17,493,300,000  at  BDT  148.50  per  GBP),  excluding  its  movable  and immovable  assets  and  without  any  bank  loans  in  2019.  Therefore, it  is implausible for a subsidiary of EWM Group to go bankrupt. Moreover, it is evident  from  the  Companies  House  records  that  EWM  Group,  through EWM (2011) Limited, had significant control over Respondents No. 1-5, with  Mr.  Philip  Day  and  Mr.  Steven  Simpson  being  key  persons  and shareholders/directors  of  all  these  companies.  Mr.  Philip  Day  placed Peacocks into administration to avoid paying creditors, and surprisingly, the administrators were appointed by directors Mr. Philip Day and Mr. Simpson. Most  shockingly,  EWM  Group  first  placed  Peacocks  into administration  without  valid  reason,  and  then  used  two  of  its  dormant companies  to  bring  Peacocks  out  of  administration.  To  execute  this fraudulent scheme, in early November 2020, EWM Group severed its ties with  Respondents  No.  4  and  5  (Anglo  Global  and  Pure  Pay),  and  on

16.11.2020,  declared  Peacocks  to  be  in  administration.  Subsequently, Peacocks was brought out of administration through common director Mr. Simpson, using shell companies Respondents No. 4 and 5, creating the false impression that Peacocks was now owned by completely new entities.

In light of the above facts, 26 RMG factories, including the Petitioner and seven other Plaintiffs, lodged complaints with the Bangladesh Garments Manufacturers & Exporters Association (BGMEA). The BGMEA took the matter  seriously,  with  both  the  past  and  immediate  past  presidents communicating  with  EWM  and  other  relevant  authorities  via  email  and letters,  expressing  concern  over  the  non-payment.  The  matter  was  also presented  to  the  Governor  of  Bangladesh  Bank,  seeking  assistance  in securing payment. EWM Group and its subsidiaries responded by claiming that “Anglo Global/PurePay is a new company and the historical debt rests with Peacocks in administration,” which is untrue, as Anglo Global and PurePay are subsidiaries of EWM Group and are owned and controlled by the  same  shareholders  and  directors,  Mr.  Philip  Day  and  Mr.  Stephen Simpson.

Without  settling  its  debts,  EWM  Group  used  the  pre-planned administration process to avoid paying the full dues to the Petitioner and other victims. They now claim to be a completely new company, but in reality, they are part of the same group, owned by the same shareholders and directors. EWM Group is now asking for a discount to take further products through  the  so-called  new  company,  while  continuing  to  engage  with innocent Bangladeshi RMG factories.

Previously,  on  04.06.2021,  Mr.  Philip  Day  incorporated  a  new company, Banbury Street Holdings Limited, and divested his control and shareholding  from  EWM  Group  to  disconnect  from  liabilities  owed  to victims of Peacocks. He also moved from Dubai to Switzerland to avoid legal  consequences.  However,  Banbury’s  filings  with  Companies  House show that Banbury is also wholly owned and controlled by Mr. Philip Day and Mr. Simpson.

The Petitioner, along with three other Plaintiffs, decided to file a Representative Suit under Order 1 Rule 8 of the Code of Civil Procedure, 1908, initiating a class action on behalf of not only their own interests but also on behalf of 22 other victims suffering from the frauds perpetrated by EWM  Group.  Accordingly,  on  14.03.2022,  the  Petitioner,  along  with proforma Respondents No. 13 to 15, filed Title Suit No. 180 of 2022 in the Court of the Learned 1st Joint District Judge, Dhaka, as a representative suit against the Respondents, seeking a decree declaring that Respondents No. 1 to 8 are jointly and severally liable for the total outstanding payments due to the  Petitioners  for  breach  of  contract,  negligence,  and  fraudulent misrepresentation.  The  suit  also  sought  to  lift  the  corporate  veils  of Respondents No. 1 to 5 to hold the shareholders and directors personally liable for the losses of the Petitioners, and to declare that Respondents No. 1, 2, 3, 6, and 7’s denial that the brand “Peacocks” is not owned by them but by Respondents No. 4 and 5 is fraudulent, unlawful, and detrimental to the national  interest  of  Bangladesh,  particularly  posing  a  threat  to  the Bangladeshi RMG sector.

On 16.03.2022, the Petitioner filed an application under Order 1 Rule 8 of the Code of Civil Procedure, 1908, seeking an order to publish an advertisement in the newspapers to invite interested parties to join as co- plaintiffs, which the court granted. Following the publication, four other co- petitioners (Proforma Respondents No. 16 to 19) joined the representative suit, bringing the total number of Plaintiffs to eight.

The  Petitioner  subsequently  obtained  an  injunction  preventing  all exports from Bangladesh under the name of “Peacocks.” However, EWM Group violated the order, prompting the filing of Violation Miscellaneous Case No. 19 of 2022. Despite a contempt petition and the Hon’ble Appellate Division upholding the temporary injunction granted by the Learned 1st Joint District Judge, Dhaka, in CPLA 2872 of 2022, EWM Group continued to export under different brand names such as Bon Marche, James Pringle, Country Rose, and Ponden Home, without paying the dues owed to the 26 RMG factories. To prevent further damage, on 11.01.2023, the Petitioner filed an application under Section 151 of the Code of Civil Procedure, 1908, seeking  an  order  to  restrain  all  exports  by  EWM  Group  and  its  sister concerns,  including  Edinburgh  Woollen  Mills  Limited,  Anglo  Global Property  Limited,  and  Purepay  Retail  Limited,  and  to  seal  their  Dhaka liaison  office.  On  09.08.2023,  after  hearing  the  application  dated 11.01.2023, the Learned Joint District Judge, 1st Court, Dhaka, rejected the application. Against the order dated 09.08.2023, the Petitioner filed this Civil Revision Application, and on 09.10.2023, the present Rule was issued as follows:

“Records need not be called for.

Let  a  Rule  be  issued  calling  upon  the  opposite parties to show cause as to why the Order No. 39 dated 09.08.2023 passed by the learned Joint District Judge, Dhaka  in  Title  Suit  No.  180  of  2022  rejecting  the application  dated  11.01.2023  should  not  be  set  aside and/or pass such other order or orders as to this Court may seem fit and proper”

The Rule is made returnable within 1 (one) week from date.

Pending hearing of the Rule, the respondent Nos. 1-7  are  hereby  restrained  by  an  order  of  temporary injunction  from  doing  any  business  with  any  RMG factories in Bangladesh till 17.10.2023.

According  to  the  Memo  No.  03.219.344.00.00. 1587.2023-1079 dated 2609.2023 (Annexure-V-1) issued by  the  Bangladesh  Investment  Department  Authority (BIDA)  permission  of  the  respondent  No.  1’s  Liaison office  has  been  expired  on  01.06.2022,  therefore, Respondent No. 1 is hereby directed not to perform any function of its Liaison office till 17.10.2023.

The petitioner is directed to put in 2(two) sets of requisites  within  3  (three)  working  days  upon  the respondents in usual course and through registered post.

The office is also directed to serve notices upon the respondent No. 1 by Special Messenger at the cost of the petitioner.

The matter will come up in the list on 17.10.2023

for order.”

The initial injunction was extended  multiple times, most recently until  the  disposal  of  the  Rule.  Extension  were  granted  on  17.10.2023, 15.11.2023, and 13.01.2024.

Opposite Party No.5 (a UK company) filed an affidavit claiming to be a  renowned  UK-based  company  engaged  in  the  Ready  Made  Garments (RMG) sector in Bangladesh. They stated they have no connection with the defendants (Nos. 1-3) and don’t place orders under the “Peacock” brand. They contribute to Bangladesh’s foreign currency reserves by placing orders for other UK brand. They also filed a Civil Petition for Leave to Appeal (No.3283 of 2023) before the Appellate Division, challenging orders passed by the High Court Division.

The petitioner filed a second supplementary affidavit on 21.04.2024, stating that they received a mediation proposal on 10.04.2024 from Dr. Amina Khatoon, the advocate of the respondent No. 1’s company, according to section 89A of the Code of Civil Procedure. Both parties discussed and agreed to settle the dispute amicably. The terms of the settlement were formalized  in  a  deed  of  compromise  dated  25.08.2024.  The  deed  of compromise dated 25.08.2024 runs as follows:

DEED OF AGREEMENT/SOLENAMA

This Agreement/Solenama is made at Dhaka on this the 25th day of August, Two Thousand and twenty-four of the Christian era.

BETWEEN

The Edinburgh Woollen Mill (EWM) Dhaka Liaison Office, represented by its  Authorized  representative  of   House:  32A,  Road:  02,  Sector:  03, Uttara, Dhaka-1230, Bangladesh (which expression where the context so admits shall include their heirs, successors, administrators, executor’s legal representatives and assigns of the First part) hereinafter referred to as the FIRST PARTY.

AND

1. Designtex Knitwear Limited, represented by its Managing Director, Bcraiderchala,  Sreepur,  Gazipur,  Bangladesh  2.  Designtex  Fashions Limited, represented by its Managing Director, Zirabo, Savar, Dhaka- 1341,  Bangladesh  3.  Knit  Bazaar  (Pvt)  Limited,  represented  by  its Managing Director, House No. 89, Road No. 28, Sector No.07, Uttara Model  Town,  Uttara,  Dhaka-1230  and  Bulbul  Tower,  Dighirchala, Mymensingh  Road,  Gazipur,  Bangladesh  4.  Bottoms  Gallery  (Pvt) Limited, represented by its Managing Director, House No. 89, Road No. 28, Sector No. 07, Uttara Model Town, Uttara, Dhaka-1230 and Bulbul Tower, Dighirchala, Mymensing Road, Gazipur, Bangladesh 5. Sinha Knit and Denims Ltd. Sinha Knit and Denims Ltd., represented by its Managing Director,  Address:  House  No.  06,  Road  No.  14,  Sector:  04,  Uttara, Dhaka-1230, Bangladesh 6. KAC Fashion Wear LTD., address: 12/13, Tetuli Bari, Sarabo, Gazipur 7. Green Life Knit Composite LTD., address: House: 16, Road: 19, Sector: 4, Uttara, Dhaka-1230 and 8. Southern Designer LTD., address: Tonga Bari, Ashulia, Savar (which expression where  the  context  so  admits  shall  include  their  respective  heirs, successors, administrators, executor’s legal representatives and assigns of the second part) hereinafter referred to as the SECOND PARTY.

WHEREAS  the  FIRST  PARTY  has  offered  to  pay  and  the  SECOND PARTY has accepted as full and final settlement, an amount of BDT 14 ( Fourteen) crore (hereinafter referred to as the “settlement amount”) on 29.07.2024 by making a settlement before Hon’ble High Court Division on the following terms and conditions:

NOW  THIS  AGREEMENT  WITNESSTH  AND  IN CONSIDERATION  OF  THE  PREMISES  AND  MUTUAL COVENANTS  CONTAINED  HEREIN  THE  PARTIES  HERETO AGREE AS FOLLOWS:

1.               That,  the  SECOND  PARTY  is  claiming  an  amount  of  USD 26,36,661.28/-  with  interest  from  the  FIRST  PARTY  of  which  no admission of liability is made. The FIRST PARTY has offered in full and final settlement of the claimed amount by paying BDT 14,00,00,000/- (fourteen crore) and the SECOND PARTY has accepted to settle for BDT 14,00,00,000/- before the Hon’ble High Court Division at the time of hearing of Civil Revision No. 5029 of 2023 and F.M.A. 216 of 2022.
2.               That,  the  SECOND  PARTY  shall  be  paid  the  total  BDT 14,00,00,000/-  at  one  go  by  the  FIRST  PARTY  after  the  signature, submission and approval of this agreement following court order. The FIRST PARTY shall remit BDT 14,00,00,000/- to an escrow account held by the FIRST PARTY lawyers which will be distributed, within 10 days of signing this agreement, in the following amount to the following members of the SECOND PARTY following the irrevocable undertaking that the SECOND PARTY shall satisfy all of the points 3,4,5,6,7,8.

3.               That, after signing this agreement, the SECOND PARTY shall, jointly with the FIRST PARTY, obtain Order from Hon’ble High Court Division disposing of Civil Revision No. 5029 of 2023 and F.M.A. No. 216 of 2022 in terms of this agreement/solenama so that the Injunction is vacated. SECOND PARTY shall also, within 3 working days from getting full payment, apply to Court to withdraw Title Suit No. 180 of 2022 and Violation Misc. Case No. 19 of 2022 currently pending in the Court of Learned 1st Joint District Judge, Dhaka.
4.               That, the FIRST PARTY including all the brands in its possession or  brands  for  which  it  holds  a  license,  affiliated  companies,  sister concerns, buying agents, Purepay Retail Limited, Anglo Global Property Limited,  and  any  other  company  appointed  by  any  brand  owned  or licensed by/to the FIRST PARTY or its affiliates, parent, shall be eligible to  do  business  in  Bangladesh  upon  full  payment  under  this agreement/solenama  and  will  have  no  obstacle  to  open  Utilization Declaration (UD) from BGMEA as per law, obtain custom clearance for export, apply for residence and employment visas for any of its employees and generally have no barrier imposed upon its business by the SECOND PARTY  or  its  affiliates,  the  BGMEA  or  any  other  Bangladesh  RMG Organisation in relation to the contracts contemplated by this agreement.
5.               That,  all  members  of  the  SECOND  PARTY  will  refrain  from contacting any member of the FIRST PARTY or its affiliates in relation to this agreement. All communication will be through the FIRST PARTY Legal representatives.
6.               That,  each  member  of  the  SECOND  PARTY  fully  agree  and confirm  to  the  representative  of  the  FIRST  PARTY  by  signing  this agreement that full and final settlement of any amounts alleged to have been due from the FIRST PARTY in any of the suits filed by the SECOND PARTY.
7.               That,  SECOND  PARTY  shall  specifically  remove  any

encumbrance on all members of the FIRST PARTY, in addition to remove any  encumbrance  against  any  staff  member  of  the  FIRST  PARTY  in Bangladesh, with, immigration, Police or any other Government body and refrain from imposing any further encumbrance at any point in the future in relation to the subject of the SECOND PARTY claim.

8.               That,  this  agreement/solenama  is  the  full  and  final  settlement between parties and the parties will have no claim regarding any past or present contracts or agreements between them either now or at any point in the future. However, the parties will be free, after complete execution of this agreement/solenama, to enter into new business arrangements if they so choose.
9.               That, the Parties and their respective counsel represent and agree that, except for matters of public record as of the date of this Agreement, they will keep the terms and contents of this Agreement confidential, and that they will not hereinafter disclose the terms of this Agreement to other persons except as compelled by applicable law or to individuals who have a need to know about this Agreement and its contents, such as the Parties’ legal counsel, tax advisors, or other retained professional representatives, all of whom shall be informed and bound by this confidentiality clause. In no event will any party make or cause to be made any comment, written statement, or press release to any member of the media concerning the fact of this agreement or the substance or terms of this agreement.
10.           That,  each  party  agrees  to  refrain  from  any  disparagement, criticism, defamation, slander of the other, or tortious interference with the contracts and relationships of the other.
11.           In the event that the SECOND PARTY is found to have breached any of the points above, the member of the SECOND PARTY who has committed the breach will be liable, without further intervention by the Court to pay to the FIRST PARTY an amount equal to 5 (five) times the amount received from the FIRST PARTY. If First Party breaches the agreement for payment , this will be applicable for them too.
12.           That, this Agreement shall be signed in 3 original copies and each party shall be entitled to get 1 copy of this Agreement and one copy shall be submitted before the High Court of Bangladesh;

IN  WITNESS  WHEREOF  THE  PARTIES  HERETO  SIGN  AND EXECUTE  THIS  DEED  OF  AGREEMENT DATED  25th  DAY  OF

AUGUST  2024  ON  DATE,  MONTH  AND  YEAR AFOREMENTIONED.

Based on the amicable settlement reached between the petitioner and the opposite party No. 1 as per the compromise deed dated 25.08.2024, the Civil Revision No. 5029/2023 has been disposed of accordingly.

Civil Revision No. 5029/2023 is disposed of in terms of the deed of compromise (solenama) dated 25.08.2024.

Bangladesh Bank (proforma respondent no. 11) is directed to settle and close all related overdue Export Proceeds (EXPs) and assist in binging pending  foreign  currency  remittances  as  per  clause  2  of  the  deed  of compromise.

Bangladesh Bank is also directed to permit the opening of an escrow account by the legal representative of EWM, Doulah & Doulah, represented by Advocate Dr. Amina Khatoon, to bring in foreign remittances. These funds will then be transferred in US Dollars to the eight RMG factories involved in Title Suit No. 180 of 2022, which is pending before the 1st Joint district Judge, Dhaka.

First Miscellaneous Appeal No. 216 of 2022 is also disposed of on the basis of the same deed of compromise.

The  judgment  further  orders  immediate  communication  of  this decision to all concerned parties.