ICDL GCC Foundation FZ-LLC and Others v European Computer Driving Licence Foundation Ltd

JurisdictionIreland
JudgeMr. Justice O'Donnell,Mr. Justice Fennelly
Judgment Date14 November 2012
Neutral Citation[2012] IESC 55
CourtSupreme Court
Docket Number[S.C. No. 389 of 2011]
Date14 November 2012
ICDL & Ors v European Computer Driving Licence Foundation Ltd

BETWEEN:

ICDL, GCC FOUNDATION, FZ-LLC,

AND

SHARIKAT TAKNIAYAT ALMAAREFA LIL TAALIM, AL MUTATWER, AL MOHADODA, TRADING AS ICDL SAUDI ARABIA
PLAINTIFFS/RESPONDENTS
-AND-
THE EUROPEAN COMPUTER DRIVING LICENCE FOUNDATION LIMITED
DEFENDANT/APPELLANT

[2012] IESC 55

Hardiman J.

Fennelly J.

O'Donnell J.

McKechnie J.

MacMenamin J.

Record No.10396P/2010
389/11

THE SUPREME COURT

CONTRACT LAW

Termination

Partial termination - Validity of termination - Limitation of damages clause - Interpretation - Meaning of "gross negligence" - Meaning of "wilful act" - Deliberate act - Ambiguity - Contra proferentem rule - Whether entitled to terminate agreement - Whether limitation clause applied - Whether guilty of gross negligence - Whether wilful amounted to no more than deliberate - Analog Devices BV v Zurich Insurance Co [2005] IESC 12, [2005] 1 IR 274, Brady v Irish National Insurance Co Ltd [1986] IR 698, Rohan Construction v ICI [1988] ILRM 373 and Investors Compensation Scheme Ltd v West Bromich Building Society [1998] 1 WLR 896 followed; Lac Minerals Ltd v Chevron Mineral Corporation of Ireland [1995] 1 ILRM 161 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 58, rr 7 and 10 - Defendant's appeal allowed (389/2011 - SC - 14/11/2012) [2012] IESC 55

ICDL GCC Foundation v ECDL Foundation Ltd

Facts: The appellant Foundation was an Irish registered company, a non-profit entity whose members were computer societies or associations of IT professionals and had a licence agreement with the first named plaintiff, the Dubai company for seven countries. Multiple breaches of contract had been made against the second named plaintiff. The plaintiffs issued proceedings and the Dubai company claimed a declaration that the licence agreement had not been terminated, specific performance and damages. The second named plaintiff claimed damages for wrongful interference with its economic interests and/ or negligence. The Dubai company alleged that the Foundation wrongfully and in breach of contract and asserted that the Dubai company was in breach of its obligations. The defendant sought to appeal an order of the High Court finding that a contract between the first plaintiff and defendant was not validly terminated and that the first named plaintiff was entitled to damages for breach of contract. The second named defendant was held to be entitled to damages in tort in accordance with the law of the Kingdom of Saudi Arabia. The Supreme Court considered whether inter alia the High Court erred in finding that the plaintiffs did not breach their contractual obligations, whether the High Court erred in finding that the Defendant was not entitled to partially terminate the Licence Agreement, finding that the termination was not invalid finding that the defendant's conduct was such as to deprive it from relying upon the licence agreement and that the defendant was liable under Saudi law for negligence.

Held by the Supreme Court per Fennelly J. (Hardiman, Fennelly, McKechnie, MacMenamin JJ. concurring) that the trial judge was fully justified in the findings that he made. The two background facts were that the Dubai company and Foundation was still in force and TVTC was engaged in a hostile campaign against the second plaintiff. All of the actions failed to take account of the Foundation's existing contractual relationships. The trial judge was entitled to find the Foundation guilty of gross negligence. The Court could consider whether there was any wilful default even though the Dubai company had not served a notice to vary. The purported notice of termination was unquestionably an intentional act on the part of the Foundation. It amounted to a breach of contract because the conditions did not exist for the valid termination and because it wrongly purported to terminate the agreement in part only. Once it established that the purported termination was a breach of contract on the part of the Foundation and that the act was intentional as it was, there was a wilful act. The Foundation forfeited any right to rely on the limitation of damage. The Court would dismiss the appeal on all grounds.

Per O' Donnell J dissenting: that the limitation provision applied and the Foundation was not guilty of either gross negligence or wilful act and the appeal would be allowed on this point. The interpretation of the limitation clause made little sense. The term "gross negligence" was no simply negligence to a significant degree.

YOUNG & HARTSON 1886 31 LR CH D 168

WHEELER v NEW MERTON BOARD MILLS LTD 1933 2 KB 669

LOMAS v PEEK 1947 2 AER 574

AUSTIN v MANCHESTER SHEFFIELD & LINCOLNSHIRE RAILWAY COMPANY 1850 10 CB 454

HILTON v DIBBER 1842 2 QB 646

GRILL v GENERAL IRON SCREW COLLIER CO 1866 1 LR CP 600

RED SEA TANKERS LTD v PAPCHRISTIDIS (HELLESPNT ARDENT) 1997 1 LLOYDS 547

ANALOG DEVICES BV v ZURICH INSURANCE CO 2005 1 IR 274

SMITH LINE LTD v YOUNG HANSEN TANGEN 1976 3 AER 570

ROHAN CONSTRUCTION v ICI 1988 ILRM 373

INVESTORS COMPENSATION SCHEME v WEST BROMWICH BUILDING SOCIETY 1998 1 WLR 896

MANNAI INVESTMENT LTD v EAGLE STAR LIFE ASSURANCE CO LTD 1997 AC 749

ANTAIOS COMPANIA NAVIERA SA v SALEN REDERIERNA AB 1985 AC 191

LAC MINERALS LTD v CHEVRON MINERAL UNREP KEANE 6.8.1993 1993/12/3862

BRADY v IRISH NATIONAL INSURANCE CO LTD 1986 IR 698

CLARK CONTRACT LAW 4ED 1998

CHITTY ON CONTRACTS 30ED 2008 1476

NORTH & FAWSETT PRIVATE INTERNATIONAL LAW 14ED 2008 115

WHEELER v NEW MERTON BOARD MILLS LTD 1933 2 KB 669

WORKMENS COMPENSATION ACT 1925 S29 (UK)

WILSON v BRETT 1843 11 M & W 113

BEAL v SOUTH DEVON RAILWAY 1864 3 H & C 337

GRILL v GENERAL IRON SCREW COLLIER CO 1866 LR 1 CP 600

JP MORGAN CHASE v SPRINGWELL UNREP GLOSTER 2008 EWHC 1793 UNREP UK 25.7.2008

CAMARATA PROPERTY INC v CREDIT SUISSE SECURITIES 2011 2 BCLC 54

RSC O.58 r 10

AHMED v MEDICAL COUNCIL 2003 4 IR 302

ANALOG DEVICES BV v ZURICH INSURANCE CO 2005 1 IR 274

SHAWINIGAN LTD v VOKINS 1961 3 AER 396

CAMARATA PROPERTY INC v CREDIT SUISSE SECURITIES UNREP 9.3.2011 2011 EWHC 479 COMM

GLENCAR v MAYO CO COUNCIL 2002 1 IR 84

1

1. This is an appeal by the defendant from an order of the High Court (Clarke J) made in the Commercial List on the 20th September 2011. The trial judge found that a contract between the 1st named plaintiff and the defendant was not validly terminated and held that the 1st named plaintiff was entitled to damages for breach of contract. He held that the 2nd named plaintiff was entitled to damages in tort to be assessed in accordance with the law of the Kingdom of Saudi Arabia.

2

2. The proceedings concern access to the private training sector in the Kingdom of Saudi Arabia ("KSA") allegedly without the consent of Technical and Vocational Training Corporation (hereinafter "TVTC") the relevant state authority in KSA.

3

3. The parties have helpfully formulated a list of what are agreed to be the issues on the appeal. The facts are very fully recounted in the High Court judgment. There is little or no controversy about the essential primary facts, in the ordinary sense. There are, however, some disputes about inferences drawn from the facts. There is a central disagreement relating to the findings in respect of the law of the Kingdom of Saudi Arabia and, in particular, about the way in which the learned judge treated the evidence of certain witnesses. There are also some disputes concerning the factual basis of the findings of gross negligence made against the Foundation. I will set out an abbreviated account of the relevant facts.

The facts
4

4. The appellant, which, like the learned trial judge, I will describe as "the Foundation," is a non-profit entity, an Irish registered company limited by guarantee, not having a share capital. Its members are computer societies or associations of IT professionals, one from each of the 28 European countries, who are also members of the Council of European Professional Informatics Societies. Its Chief Executive is Mr. Damien O'Sullivan. The Foundation provides the ECDL, or "European Computer Driving Licence," designed to promote skills and literacy in Information Technology. Its programme has three components. They are the issue of a skills card (a card which records the enrolment and progress of the candidate through the course), the provision of course materials in accordance with a syllabus, a testing base or solution (which is essentially the examination questions and process, also generally conducted online) and the award of a certificate. It provides an internationally recognised method of certification of skills in information technology. Outside Europe the programme is branded as the International Computer Driving Licence. It was launched in 1999. The Foundation licenses individual companies or bodies to provide the programme in different countries or regions.

5

5. The subject-matter of the present proceedings is a licensing agreement in relation to the seven countries of the Gulf Co-operation Council, most importantly the KSA, upon which the entire dispute centres.

6

6. The first-named plaintiff/respondent (hereinafter the Dubai company) is a body corporate which has its headquarters in Dubai, United Arab Emirates. The second-named plaintiff/respondent (hereinafter "TAM") is a company incorporated in Riyadh, KSA. It trades as "ICDL Saudi Arabia." Mr. Marwan Al Bawardi is the Chief Executive Officer of both plaintiffs. TAM has also traded under the name "Element K" as a provider of IT training materials and e-learning solutions serving a variety of organisations over a period in excess of 20 years, both in the Middle East and elsewhere.

7

7. In late 2002, TAM approached the Foundation with a view to...

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