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

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 04 August 2011
• Neutral Citation: [2011] IEHC 343
• Court: High Court
• Date: 04 August 2011

[2011] IEHC 343

THE HIGH COURT

[10396 P/2010]

ICDL GCC Foundation FZ-LLC & Ors v European Computer Driving Licence Foundation Ltd

COMMERCIAL

BETWEEN:

ICDL GCC FOUNDATION FZ-LLC

AND

SHARIKAT TAKNIAYAT ALMAAREFA LIL TAALIM AL MUTATAWER AL MOHADODA, TRADING AS ICDL SAUDI ARABIA

PLAINTIFFS

AND

THE EUROPEAN COMPUTER DRIVING LICENCE FOUNDATION LIMITED

DEFENDANT

BEALE CHITTY ON CONTRACTS 30ED 2008 1476-7

AFOVOS SHIPPING CO LTD v PAGNAN 1983 1 WLR 195

MARDOF PEACH v ATTICA SEA CONTAINERS CORP 1977 AC 850

PARTIAL TERMINATION OF CONTRACTS 2008 24 JOURNAL OF CONTRACT LAW 1

YOUNG & HARSTSON, IN RE 1885 31 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 1852 10 CB 454

HINTON v DIBBIN 1842 2 QB 646

BEAL v SOUTH DEVON RAILWAY 1861-73 AER REP 972

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

RED SEA TANKERS LTD v PAPACHRISTIDIS 1997 2 LLOYDS REP 547

EEC REG 864/2007

ROME II REG 864/2007 LAW APPLICABLE TO NON CONTRACTUAL OBLIGATIONS OUP 2008 4.79

CONTRACT LAW

Interpretation

Commercial law - Licence agreement - Breach - Partial termination - Limitation of damages clause - Construction of commercial contract - Statutory interpretation - Gross negligence - Conflict of laws - Tortious liability - Place of damage - Islamic law - Whether breach of licence - Whether termination of licence lawful - Whether cure notice was wrong - Whether second notice necessary - Whether defendant entitled to partial termination - Whether wilful act of gross negligence - Whether damage limitation clause applied - Whether possible to split applicable law - Afovos Shipping Co. SA v Pagnam [1983] 1 WLR 195; Analog Devices BV v Zurich Insurance Company [2005] IESC 12, [2005] 1 IR 274; Austin v Manchester, Sheffield and Lincolnshire Railway Company (1850) 10 CB 454; Beal v South Devon Railway [1861] All ER Rep 972; BNY Trust Company (Ireland) Ltd v Treasury Holdings [2007] IEHC 271, (Unrep, HC, Clarke J, 5/7/2007); Grill v General Iron Screw Collier Company (1866) LR 1 CP 600; Hilton v Dibber (1842) 2 QB 646; ICS Ltd v West Bromich BS [1998] 1 WLR 896; Lomas v Peek [1947] 2 All ER 574; Mardorf Peach & Co Ltd v Attica Sea Containers Corp [1977] AC 850; Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989; Red Sea Tankers Ltd v Papachristidis (The Hellesport Ardent) [1997] 2 Lloyd's Reports 547; Wheeler v. New Merton Board Mills Limited [1933] 2 KB 669 and Re Young and Hartson's Contract (1885) 31 Ch D 168 considered - Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11/7/ 2007, on the law applicable to non-contractual obligations (Rome II), arts 1, 2, 3, 4 and 15 - Claim allowed (2010/10396P - Clarke J - 4/8/2011) [2011] IEHC 343

ICDL GCC Foundation v ICDL Saudi Arabia

1. Introduction

2 2 1.1 The so-called Computer Driving Licence was introduced as a scheme for certifying skills and literacy in Information Technology. The licensing system originated in Europe but has since acquired an international dimension. It was started by a combination of national computer societies in Europe which established the defendant ("the Foundation") which, it would appear, holds the Intellectual Property rights in the licence.

3 3 1.2 The advantages of the licensing system appear to be that there is provided an internationally recognisable certification which makes skills transportable. In addition, it would seem that those wishing to acquire certification are not confined to one location in so doing, so that, for example, part of the certification may occur in one location, but an individual, who, for whatever reason, moves to another location before completing the programme, can easily fit in with completing the programme in a second location.

4 4 1.3 In substance, the Foundation works by licensing individual entities to carry out the works of the programme in different regions or countries. Of particular relevance to this case is the licensing of the operation of the programme in the Gulf region (and, in particular, in Saudi Arabia) ultimately to the second named plaintiff ("TAM"). I will return to the precise details of that licensing arrangement in due course.

5 5 1.4 However, a problem emerged (or, at least, did so on one view) in relation to the operation of the Programme in Saudi Arabia. That problem was concerned with the jurisdiction of a Saudi Arabian public body, to which it will again be necessary to refer to in more detail in due course. A suggestion was made that it was no longer lawful to operate the programme in Saudi Arabia, and, on that basis, and on foot of the terms of the relevant licence, the Foundation purported to terminate same.

6 6 1.5 These proceedings ensued. While there are a number of sub-issues, the kernel of the case concerns the lawfulness or otherwise of the termination of the licence in question. It was agreed between the parties and accepted by me that it would be appropriate to deal with all questions of liability first, and to leave over any question concerning the quantification of damages, save in one limited respect. As will become clear, there is a damages limitation clause in the licence which, on one view, would limit any possible claim which might be made to €50,000. This judgment is also concerned with whether that clause applies on the facts of this case, for if it does, then the undoubtedly complex questions which would arise concerning the calculation of damages would be most unlikely to arise.

7 7 1.6 One of the features of this case is that it has involved a considerable amount of interpretation and translation or oral and written evidence from Arabic to English. This brings its own challenges.

8 8 1.7 Against this brief background it is next appropriate to turn to the reliefs claimed.

2. Reliefs Sought

2 2 2.1 The first plaintiff ("the Dubai Company") is seeking a declaration that its contract with the Foundation remains in force. The Dubai Company also seeks an order for specific performance or damages in lieu and also damages for breach of contract. Both plaintiffs make claims in tort for damages/compensation under the laws of Saudi Arabia. In the alternative both seek damages for wrongful interference with their economic interests or for negligence, or both.

3 3 2.2 The Foundation counterclaims seeking injunctions to restrain the plaintiffs from operating or promoting the European Computer Driving Licence ("ECDL") concept in Saudi Arabia and from taking such steps as would induce the belief that they were licensed to operate or promote the ECDL concept or that they are connected to the Foundation. The Foundation also counterclaims for damages for breach of contract, negligence and breach of duty.

4 4 2.3 As can be seen, the counterclaim is, in substance, the counterpart of the claim. The Dubai Company asks the court to declare that its contract with the Foundation remains in force where the Foundation seeks, in substance, orders stemming from its assertion that the contract is no longer in force. That is the key question. If the contract has been validly terminated, then that is the end of the case. If, however, the contract has not been validly terminated, then some of the other issues which arise from the specific reliefs claimed in both directions will then require determination. Against the background of those issues, it is next necessary to turn to the facts.

3. Factual Background

2 2 3.1 The ECDL is an information technology skills and literacy certification programme, which demonstrates levels of competence in computer use. The ECDL programme (the "Programme") consists of three components, namely: a syllabus, a skills card and a question test base. Outside of Europe the ECDL is branded as the International Computer Driving Licence ("ICDL") and was launched in 1999.

3 3 3.2 The Dubai Company is a body corporate which has its headquarters in Dubai, United Arab Emirates. TAM, which trades as ICDL Saudi Arabia, is a company incorporated in Riyadh, 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. It would appear that while there was some overlap during the early stages of the introduction of the ICDL programme into Saudi Arabia, latterly Element K and ICDL Saudi Arabia were separated and run as individual business units.

4 4 3.3 The Foundation is a company limited by guarantee, not having a share capital, registered in Ireland. Its members are computer societies or associations of IT professionals, one from each of 28 European countries, who are also members of the Council of European Professional Informatics Societies. The purpose of the Foundation is the development of the ECDL programme and its implementation across Europe and internationally. Mr. Damien O'Sullivan is the Foundation's Chief Executive.

5 5 3.4 In late 2002, TAM approached the Foundation with a view to introducing the ICDL programme to Saudi Arabia. This is reflected in the board minutes of the Foundation dated 11 ^th March, 2003.

6 6 3.5 At this point, TAM had a close working relationship with the General Organisation for Technical Education and Vocational Training ("GOTEVOT"), which later became the Technical and Vocational Training Corporation ("TVTC"). TVTC is a governmental body charged with the responsibility for vocational education and training in Saudi Arabia. The precise nature of its role and authority along with its contractual arrangements with TAM in the context of these proceedings is a matter of some dispute and will be questions which I...