Analog Devices B.v v Zurich Insurance Company

JurisdictionIreland
JudgeMr. Justice Kelly,Mr. Justice Lavan
Judgment Date20 December 2002
Neutral Citation[2001] IEHC 237
CourtHigh Court
Docket NumberNo. 727p/2000,Record No. 2000/727P
Date20 December 2002

[2001] IEHC 237

THE HIGH COURT

Record No. 2000/727P
ANALOG DEVICES BV & ORS v. ZURICH INSURANCE CO & ANOR
BETWEEN/
ANALOG DEVICES B. V., ANALOG DEVICES IRELAND LIMITED ANALOG DEVICES RESEARCH & DEVELOPMENT LIMITED, ANALOG DEVICES INC.
Plaintiffs
-and-
ZURICH INSURANCE COMPANY, AMERICAN GUARANTEE & LIABILITY INSURANCE COMPANY
Defendants

Citations:

RSC O.11 r1

RSC O.11 r1(e)

RSC O.11 r1(e)(iii)

RSC O.11 r1(h)

RSC O.12 r26

RSC O.11 r5

SHORT V IRELAND 1996 2 IR 188

INTERNATIONAL COMMERCIAL BANK PLC V INSURANCE CORPORATION OF IRELAND 1989 IR 453

SPILLADA MARITIME CORPORATION V CANSULEX LTD 1987 1 AC 460

TROMSO SPAREBANK V BYRNE UNREP 15.12.1989 1989/9/2532

Synopsis

PRACTICE AND PROCEDURE

Motion

Motion to set aside proceedings - Insurance - Contract -Jurisdiction - Litigation -Insurance claim - Financial loss - Forum non conveniens - Whether service outside jurisdiction should have been ordered - Whether proceedings should be set aside - Rules of the Superior Courts, 1986 Order 11, rules 1 and 5; Order 12, rule 26 (2000/727P - Lavan J - 18/5/01)

Analog Devices B V v Zurich Insurance

The second named defendant brought a notice of motion seeking to have the present proceedings set aside or in the alternative staying the said proceedings. The plaintiffs allegedly sustained serious financial loss as a result of an incident at their plant and submitted insurance claims to the defendants as their insurers. Coverage was denied by the insurers and the present proceedings were initiated. The second named defendant submitted that the case was not a proper one for the service of a summons outside the jurisdiction or in the alternative that Massachusetts was a more appropriate forum to determine the dispute. Mr. Justice Lavan was satisfied that Ireland was an appropriate forum for the hearing of the action and refused the relief sought.

JUDGMENT of
Mr. Justice Lavan
delivered on the 18th May, 2001
1

The action arises out of a notice of motion filed by the second named defendant, American Guarantee and Liability Insurance Company (hereinafter "American Guarantee"), seeking an order setting aside the service on it of a Notice of Concurrent Summons dated 10 February, 2000, on the grounds that this Court had no power to permit service thereof on it outside the jurisdiction. American Guarantee also seeks an order setting aside the Order made by this Court on 31 January, 2000, authorising service on it of same. In the alternative, American Guarantee seeks an order staying the proceedings herein as against it on the grounds that proceedings concerning the same cause or matter were pending between it and the fourth named plaintiff, Analog Devices Inc., in the United States District Court for the District Court of Massachusetts prior to the commencement of the proceedings herein.

2

The High Court assumed jurisdiction over American Guarantee pursuant to Order 11 of the Rules of the Superior Courts, 1986, by virtue of an order of the Honourable Mr. Justice Smith made on 31 January, 2000, on an ex parte application. The provisions relevant to the establishment of jurisdiction in the instant case are contained in Order 11 Rule 1 which provides that:

"Service out of the jurisdiction of an originating summons or notice of an originating summons may be allowed by the Court whenever -"

3

(e) the action is one brought to enforce, rescind, dissolve, annul, or otherwise affect a contract, or to recover damages or other relief for or in respect of the breach of a contract -

4

… (iii) by its terms or by implication to be governed by Irish law, or is one brought in respect of a breach committed within the jurisdiction of a contract wherever made, even though such breach was preceded or accompanied by a breach out of the jurisdiction which rendered impossible the performance of the part of the contract which ought to have been performed within the jurisdiction…

5

(h) any person out of the jurisdiction is a necessary or proper party to an action brought against some other party duly served within the jurisdiction."

6

The proceedings arise out of a contested insurance claim brought by the plaintiffs, four related companies under the Analog Devices banner, against the first and second named defendants. The claim arises on foot of an incident which occurred on 2 August, 1999 at the plaintiffs” manufacturing plant at Raheen Industrial Estate, Limerick, when damage caused by the installation of an incorrect filter a number of months previously became apparent. It is alleged that as a result product processed between 3 April 1999 and 8 August 1999 was rendered unusable causing serious financial losses to the plaintiffs. Arising out of these alleged losses, the plaintiffs have made a claim under two insurance policies. Coverage has been denied on the basis of certain exclusions under both policies. The first policy under which a claim is made is that issued by the first named defendant, Zurich Insurance Company, and has been referred to in proceedings as the "local policy". The proceedings brought by the plaintiffs against Zurich Insurance Company have been progressing in this jurisdiction. No issue in relation to jurisdiction has arisen in relation to the first named defendant in so far as a claim under the local policy is concerned. The second policy under which a claim is made is that issued by the second named defendant, American Guarantee, and has been described in the proceedings as the "master policy". While the local policy was issued in Ireland, the master policy was issued in the United States by the second named defendant to the fourth named plaintiff, Analog Devices Inc., which is also based in the United States.

7

The plaintiffs issued a plenary summons in Ireland on 20 January, 2000. To bring proceedings against American Guarantee, the plaintiffs required a High Court order giving them liberty to issue concurrent summons and to serve notice thereof on American Guarantee. Leave was granted and the appropriate order in relation thereto made by Mr. Justice Smith on 31 January 2000 and the concurrent summons was issued on 10 February 2000. Notice of that date was served on American Guarantee in the United States.

8

In the present action, American Guarantee is challenging the Court's jurisdiction to entertain the plaintiffs” claim on the grounds that the Irish Courts do not have jurisdiction in relation thereto. It seeks orders pursuant to Order 12 Rule 26, Rules of the Superior Courts or, alternatively pursuant to the inherent jurisdiction of the Court setting aside service of the proceedings on it. Order 12 Rule 26 provides that:

"A defendant before appearing shall be at liberty to serve notice of motion to set aside the service upon him of the summons or of notice of the summons, or to discharge the order authorising such service."

9

It is submitted on American Guarantee's behalf that, as the plaintiffs have failed to establish that the claim falls under any of the sub-rules of Order 11 Rule 1, the case is not a proper one for service outside the jurisdiction under Order 11 Rule 5. Alternatively, American Guarantee seeks a stay on the proceedings based on the grounds that Massachusetts is the more appropriate forum to determine the dispute having regard to the fact that proceedings have been commenced and are at an advanced stage and that justice does not require that the stay sought should be refused.

10

The principal factors relied upon by the plaintiffs in urging that the proceedings commence in Ireland are outlined in paragraph two of their submissions. The factors as outlined are:

11

2 "(1) The incident that occurred on 2 August, 1999, occurred in Raheen, Co. Limerick.

12

(2) Witnesses of fact relating to the nature of the process and what transpired on the day in question are all located in Ireland.

13

(3) Witnesses of fact relating to the proof of loss sustained by the plaintiffs are all located in Ireland.

14

(4) The documentation relating to the nature of the process and the losses of the plaintiffs are located in this jurisdiction.

15

(5) The dispute as to whether indemnity was denied - before any inspection was carried out - at the meeting on the 3rd September 1999 relates to a meeting that occurred in Ireland.

16

(6) Documentation relating to the manufacturing process and the maintenance procedures (which would be of critical importance) are located in Ireland."

17

The plaintiffs submit that the claim against the second named defendant is one brought in respect of a breach within the jurisdiction of a contract wherever made, which gives the Court jurisdiction within Order 11 Rule 1 (e)(ii), Rules of the Superior Courts. The breach relied upon was the failure of the second named defendant to make payments under the master policy. Payment under such policy fell to be made in Ireland, it was submitted. giving the Court jurisdiction to determine whether the alleged breach had in fact occurred. In light of the forgoing authorities, the plaintiffs submit that Order 11 does not require an applicant seeking leave to serve out of the jurisdiction to establish, on the balance of probabilities, that one or more of the grounds for service out of the jurisdiction set out in Order 11, Rule 1 applies. Rather, it is submitted, the applicant is required to establish that it has a good arguable case for asserting that one or more of these grounds applies.

18

In support of this contention, the plaintiff cites the judgment of Barrington J in the Supreme Court inShort v. Ireland [1996] 2 I.R. 188 pp.219–220:

"From the forgoing discussion it is clear that the present case raises, or may raise, difficult questions of far ranging significance. Certainly the questions are too complex and difficult to be disposed of,in limine, on a motion to dismiss for want of jurisdiction. Rather they should be left to the trial judge to decide after full...

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