Anglo Irish Bank Corporation Ltd v Quinn Investments Sweden AB and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 13 September 2011
• Neutral Citation: [2011] IEHC 356
• Court: High Court
• Date: 13 September 2011

[2011] IEHC 356

THE HIGH COURT

[No. 5843 P/2011]

Anglo Irish Bank Corporation Ltd v Quinn Investments Sweden AB & Ors

BETWEEN

ANGLO IRISH BANK CORPORATION LIMITED

PLAINTIFF

AND

QUINN INVESTMENTS SWEDEN AB, SEAN QUINN, CIARA QUINN, COLLETTE QUINN, SEAN QUINN JNR, BRENDA QUINN, AOIFE QUINN, STEPHEN KELLY, PETER DARAGH QUINN, NIALL MCPARTLAND AND INDIAN TRUST AB

DEFENDANTS

Abstract:

Practice and procedure - Jurisdiction - Brussels Regulation - Related proceedings - Sets of proceedings - Preliminary reference - Article 267 TFEU - Council Regulation (EC) No. 44/2001 on the jurisdiction and recognition and enforcement of judgments in civil and commercial matters

Facts: A dispute arose between the parties in relation to the provision of Eur 2.6 billion finance by the plaintiff to Quinn Finance. The plaintiff sought declarations as to ownership of share pledges. A Swedish company had been set up by the defendant group family as a vehicle through which property was owned and this entity in turn had many ultimate subsidiaries, including a number of Cypriot companies with shareholdings held in a number of other countries. The third to seventh defendants were the beneficial owners of the Quinn Group. Anglo alleged that various members of the Quinn family had been involved in a conspiracy to alter the way in which their property portfolio was held. The Quinns sought orders staying or dismissing the proceedings on the basis of Article 28 of the Brussels Regulation on the ground that a related action was pending in Cyprus and declarations that the Courts of Sweden and Cyprus had jurisdiction to settle disputes about Share Pledged pursuant to Article 23 of the Brussels Regulation. The Irish High Court had to determine the question of jurisdiction pursuant to the Brussels Regulation.

Held by Clarke J. that the Court would decline the application made under Article 23 on the basis that there was no agreement on the facts between the parties which would confer exclusive jurisdiction on the courts. On the application to dismiss or stay pursuant to Article 28 of the Brussels Regulation, the Court would refer the matter to the Court of Justice. The Court needed clarification of whether the Courts of Ireland or Cyprus were "related" in the sense of the Regulation. The Court would adjourn proceedings pending the determination of that Court.

Reporter: E.F.

1. Introduction

2 2 1.1 Both the plaintiff ("Anglo") and the group of companies (the "Quinn Group") associated with many of the defendants were apparent stars of the Celtic Tiger years. However, the situation facing both has dramatically altered. As is widely known Anglo is now in state ownership, would be hopelessly insolvent but for state assistance, is no longer involved in ordinary banking but is seeking to recover such loans as it can so as to minimise the ultimate exposure of the taxpayer. Likewise, the Quinn Group in its various component parts has been the subject of significant financial difficulty with the appointment of administrators and receivers to many companies within the Group.

3 3 1.2 There is at least a partial connection between the problems which beset both Anglo and the Quinn Group, At certain times the Quinn Group made significant (and ultimately disastrous) investments in Anglo. In that context it is, perhaps, not surprising that litigation between Anglo and members of the Quinn family and companies associated with them has ensued. These proceedings form part of that litigation.

4 4 1.3 The specific backdrop to these proceedings concerns a part of the Quinn family empire which derived from the acquisition of a significant property portfolio largely based outside Ireland. It is unnecessary for the purposes of the issue with which I am now concerned to set out in any detail the precise and complex ownership structure through which the beneficial interest of members of the Quinn family in that property portfolio was held. Suffice it to say that the first named defendant ("QIS"), which is a Swedish company, was the vehicle through which that property portfolio was owned. QIS in turn had many ultimate subsidiaries including a number of Cypriot companies, which in turn held the shareholding in companies in countries such as Russia, Ukraine and India which latter companies directly owned the properties which formed part of the portfolio.

5 5 1.4 Anglo alleges that various members of the Quinn family have been involved in what it says is a conspiracy to alter the way in which the property portfolio concerned is held. Anglo has prima facie security over the property portfolio and the companies which hold that property. It is said by Anglo that the intention of the defendants is to remove the value of that portfolio away from the existing structure (which has QIS at its head) and into a separate structure whose ultimate beneficial owner would again be members of the Quinn family (although not necessarily in exactly the same way as presently constituted) but where, crucially, security in favour of Anglo would not be in place.

6 6 1.5 In substance, the allegation is that the intention is to deprive Anglo of the value of its security over the property portfolio.

7 7 1.6 At this stage I am only concerned with questions of jurisdiction. The defendants (save where the context otherwise requires "the Quinns") suggest that this Court does not have jurisdiction (or may not have jurisdiction depending on certain other events to which it will be necessary to refer in due course) to determine these proceedings. The Quinns have brought this application seeking to persuade the Court that it does not have jurisdiction or alternatively that the proceedings should be stayed. In order to fully understand the issues which arise, it is necessary to start by setting out a brief overview of the jurisdictional issues which confront the court.

2. Questions of Jurisdiction

2 2 2.1 One obvious consequence of increased globalisation of trade and commerce is an internationalisation of litigation connected with global commercial arrangements. Historically each country had its own private international law which specified the various bases on which the courts of that country would accept jurisdiction over all types of disputes (including commercial disputes) and the factors that might properly be taken into account in deciding whether to exercise that jurisdiction. Likewise, the private international law of each country specified the circumstances in which the courts of that country would recognise judgments, decisions and orders of the courts of other countries which might also be said to have a jurisdiction in relation to relevant matters.

3 3 2.2 In the context of the building of the single market within the European Union, it is hardly surprising that measures have been adopted which are designed to specify with some precision the particular jurisdiction or jurisdictions which are appropriate to decide particular disputes. The Brussels Convention (later the Brussels Regulation) was the means adopted.

4 4 2.3 However, in addition to setting out the rules that determine which jurisdiction or jurisdictions is or are appropriate to decide on a particular dispute, the Brussels Regulation also, importantly, seeks to specify which countries' courts are actually to make the decision as to where a particular set of proceedings are to be tried. While the Brussels Regulation sets out detailed rules concerning jurisdiction, the interpretation of those rules can, in some cases, be difficult and, moreover, the application of the rules to the facts of individual cases can, in itself, lead to controversy. There will, therefore, necessarily, be some cases where it will not be free from doubt as to the proper jurisdiction to try a particular set of proceedings. In those circumstances it is important that there be clear rules as to which countries' courts are to make the decision as to where the trial is to be, for in the absence of such rules there would be the obvious risk of differing views being taken by the courts of different countries leading to obvious confusion.

5 5 2.4 The freedom to do business across the single market within the European Union necessarily carries with it the requirement that there be a single and, insofar as it may be possible, relatively straightforward, set of rules designed to ensure that there is clarity as to where court cases involving disputes arising out of the trans-national nature of that single market are to be tried. It is the application of those rules to the somewhat complex situation which underlies the dispute between Anglo and the Quinns that gives rise to the difficult questions with which I am now faced. However, before setting out the precise issues of jurisdiction which arise, it is appropriate to briefly set out the background to the various cases and to the general issues which arise between Anglo and the Quinns for it is against that background that the jurisdictional issues which now arise need to be seen.

3. Background

2 2 3.1 There are a number of cases currently extant between the parties across a number of jurisdictions. While this decision merely goes to determine the jurisdictional questions which arise in one of those sets of proceedings, the existence of the other cases forms part of the picture against which that jurisdictional issue needs to be considered. For this reason it is necessary to refer to the other proceedings and to provide a brief overview of same.

3 3 3.2 In the present case, the third to seventh defendants ("the Quinn Children") are the beneficial owners of the Quinn Group which comprises approximately 95 companies and which was, as far as these proceedings are concerned, at all material times under the stewardship of the second defendant, Mr. Sean Quinn. The Quinn...