Cross-border control under takeover law turns on incorporation law for control and Indian rules for takeover consequences.

Control between foreign-incorporated companies is ordinarily determined by the law of incorporation, so the question whether Technip controlled Coflexip fell to be tested under French law; the takeover consequences for an Indian listed company were governed by Indian takeover regulations, and the public policy objection was rejected. Under those regulations, liability depended on proof that the acquirer, alone or acting in concert, acquired or agreed to acquire control of the target company. On the evidence, Technip's share purchase in Coflexip showed a strategic alliance but did not establish de facto control in April 2000 or concerted action aimed at acquiring SEAMEC, so the takeover obligation on that basis was not made out.

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Issues: (i) Whether the relationship of control between two French companies had to be determined under French law, while the consequences of such control for an Indian listed company fell to be governed by Indian takeover law; (ii) Whether the material established that Technip and ISIS acted in concert to acquire control of Coflexip in April 2000 so as to trigger the takeover obligations in respect of SEAMEC.

Issue (i): Whether the relationship of control between two French companies had to be determined under French law, while the consequences of such control for an Indian listed company fell to be governed by Indian takeover law.

Analysis: The controlling status of corporations is ordinarily governed by the law of incorporation. Technip and Coflexip were incorporated in France, so the question whether Technip controlled Coflexip had to be tested under French law. Once that status was identified, the obligation to make an open offer in relation to SEAMEC, an Indian listed company, was governed exclusively by the SEBI takeover regulations. The public policy exception was rejected because the difference between French and Indian takeover thresholds did not amount to a fundamental conflict with Indian public policy.

Conclusion: The applicable law for determining Technip's control over Coflexip was French law, while the obligation arising toward SEAMEC was governed by Indian takeover regulations.

Issue (ii): Whether the material established that Technip and ISIS acted in concert to acquire control of Coflexip in April 2000 so as to trigger the takeover obligations in respect of SEAMEC.

Analysis: The Court held that the test under the takeover regulations focused on whether the acquirer, alone or acting in concert, had acquired or agreed to acquire control of the target company. The relevant inquiry was not a broad notion of corporate family or common interest, but whether the facts showed a concerted acquisition of control over SEAMEC, directly or through Coflexip. On the evidence, Technip's purchase of shares in Coflexip was found to be part of a strategic alliance and not proof, on a balance of probabilities, of de facto control in April 2000 or of concerted action aimed at acquiring SEAMEC. SEAMEC's shareholding in Coflexip was also not shown to be a substantial part of Coflexip's assets.

Conclusion: The alleged concerted control in April 2000 was not established, and the takeover obligation in respect of SEAMEC did not arise on that basis.

Final Conclusion: The appellate order was set aside and the SEBI determination was restored, with no further adjudication on the ancillary issues concerning interest, dividend adjustment, or identification of shareholders.

Ratio Decidendi: The status of control between foreign-incorporated companies is determined by the law of incorporation, but the statutory takeover consequences for an Indian target company are governed by Indian law; under takeover regulations, concerted action must be proved by material showing a real common objective to acquire control of the target company, not by mere corporate association or shared interests.

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