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Firstly this case proceeding was initiated by Australian securities and investments commission in trial court. Proceedings were initiated against Fortescue Metal Group and Mr. Forest after they have...

Firstly this case proceeding was initiated by Australian securities and investments commission in trial court. Proceedings were initiated against Fortescue Metal Group and Mr. Forest after they have made the announcements in Australian stock exchange regarding their framework agreement with Chinese companies which were owned by government.
At trial court judge has dismissed Australian Securities and Investments Commission’s claim but on the plea to full federal court Australian Securities and Investments Commission claim was effective in attaining the orders that:
•    Fortescue was affianced in unreliable or illusory comportment in violation of section 1041 of the Corporations Act 2001 (Australian Law, 2017).
•    Fortescue metal group has violated section 674 of the Act of continuous disclosure requirement.
•    CEO of the company Mr. Forest was also not successful in exercising his influences and satisfying his responsibilities with realistic care and persistence. He has trespassed section XXXXXXXXXXof the Act (News, 2017).
After this decision of full federal court Fortescue and Forest plead in contradiction of this verdict of federal court in high court and pursued restoration of the verdict given by trial court at the first case in find.
The issues which were raised by the Australian Securities and Investments Commission that the Fortescue and Mr. Forest and its board has acted misleadingly in the declarations made by them were lessened by the High court (Loth, 2017).
The court concentrated its analysis whether Fortescue usage of word Binding contract in declarations made by them was distorted or dishonest or likely distort or cheat.
The court piloted a close scrutiny of the connotation of term required agreement as     assumed with orientation to the envisioned spectators. The envisioned spectators would be stockholders or possibly some extensive sector of trade community.
The court said that the term binding contract would not necessarily the agreement which legally enforceable if the literal meaning is ignored. Sometimes the validity of the contract should not be evaluated in certain situations and also the performance of the contract should not be practically measured before the initiation of the contract and before making declarations to the public that it is binding (Cornwall, 2017).
Let us now discuss the reasons behind such decision of the court. The court’s methodology depends on the following two crucial matters:-
•    The Declaration correctly abridged content of the framework contracts
•    Binding contract pointed out in reference to the parties who have entered into contract are the parties who are intended to be binding.
The court also discards the Australian Securities and Investments Commission’s allegation that the contract of framework agreement would be administered by laws of Australia. The agreement involves other country i.e. China and the agreement ceremony was happened in Beijing so it is not necessary that Australian law will apply. The court states that Audience for the questioned declarations would have acknowledged from the identical content of the declarations that contract to which they mentioned had imperative transnational attributes (Lavan, 2017).
ASIC also made allegations on Mr. Forest that he has rehabilitated the terms of framework contracts pointed that the covenants were not binding in nature.
These allegations which was made by Australian Securities and Investments Commission was forbidden by court on the ground that  post contractual discussions does not amount to rejection of a previous covenant and it was appropriate marketable behaviour to carry on to endeavour to strike a better snip (Keeves, 2017).
The high court also dismissed the allegations which were made by Australian securities and investments commission that Fortescue and Mr. Forest has breached the section 1041 of the Act. i.e. Fortescue was not involve in any ambiguous and unreliable conduct. And also section 674 and that is unremitting revelation and section XXXXXXXXXXthat is director duties were dependent on a breach of section 1041 of the Act and were terminated accordingly (Finlaysons, 2017)
Hence this case tells us about how the issues on declaration related to agreements of companies were handled by different hierarchy of courts.



Oct 07, 2019
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