Irish Bank Resolution Corporation Ltd v Quinn

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 28 July 2016
• Neutral Citation: [2016] IESC 50
• Court: Supreme Court
• Docket Number: [S.C. No. 44 of 2013],[Appeal No: 044/2013]
• Date: 28 July 2016

[2016] IESC 50

THE SUPREME COURT

Clarke J.

[Appeal No: 044/2013]

O'Donnell J.

Clarke J.

MacMenamin J.

Between/

Irish Bank Resolution Corporation Limited (In Special Liquidation), Quinn Investments Sweden AB

and

Leif Baecklund

Plaintiffs/Respondents

and

Sean Quinn, Ciara Quinn, Colette Quinn, Sean Quinn Junior, Brenda Quinn, Aoife Quinn, Stephen Kelly, Peter Darragh Quinn, Niall McPartland, Indian Trust SA, Forfar Overseas SA, Lockerbie Investments SA, Clonmore Investments SA, Marfine Investments Limited, Blandun Enterprises Limtied, Mecon FZE, CJSE Vneshkonsalt, OOO Stroitelnye Tekhnologh, III RLC-Development, Karen Woods, Senat FZC, Senat Legal Consultancy FZ LLC

and

Michael Waechter

Defendants (Mecon FZE Sole Appellant)

Banking – Debts owed to plaintiff bank – Receivers appointed over assets held by defendants – Application by defendant to stay proceedings on basis it had been improperly joined – Jurisdiction

Facts: The parties were engaged in substantial litigation in respect of debts owed to the first respondent and the efforts of the first respondent to realise their security held over assets of the defendants. One of the defendant (?Mecon?) had been a defendant in proceedings in India brought by the respondents. Mecon had applied to stay the proceedings in the State on the basis the Indian court was the appropriate form to determine any outstanding matter. The High Court had rejected that application and the matter now came on appeal to the Supreme Court.

Held by Mr Justice Clarke the other Justices concurring, that the appeal would be dismissed. The Court reviewed the relevant principles and was satisfied that the High Court had correctly dismissed Mecon?s application to set aside the grant of leave for service out of the jurisdiction. Further, the Court was not prepared to grant a stay on the proceedings, subject to the first respondent and associated entities ensuring that the matter was proceeded in a reasonable manner with respect to Mecon?s security.

Judgment of Mr. Justice Clarke delivered the 28th July, 2016.

1. Introduction

1.1 Litigation between the parties to these proceedings (or at least some of them) has been ongoing in the courts of this jurisdiction and others for quite some time. The principal underlying issue is, by now, well known. The first named plaintiff/respondent (?IBRC?) contends that various members of the Quinn family engaged in wrongful actions designed to place assets, which had been charged in favour of IBRC, outside of its reach. Various corporate entities are said to have played a role in putting those plans into place. It is in that context that the position of 16th named defendant/appellant (?Mecon?) comes into play. Mecon is a Dubai registered company which, it would appear, engaged in certain transactions concerning relevant Indian companies. It is asserted by IBRC and the other plaintiffs (being a Quinn related company now under the control of IBRC and a receiver appointed in respect of assets of that and other relevant companies) (collectively ?IBRC? where the context so admits) that the transactions in which Mecon was involved formed part of the general plan to place Quinn related assets outside the reach of IBRC thus frustrating the attempt to realise those assets for the purposes of part payment of debts owed by members of the Quinn family and Quinn entities to IBRC.

1.2 It was in those circumstances that an application was made to join Mecon to these proceedings. However, Mecon is not an Irish company nor is it a company incorporated within the EU or subject to the jurisdictional arrangements applicable to individuals or corporations to whom certain EU jurisdictional law applies. It thus followed that it was necessary to obtain the leave of the High Court to facilitate the commencement of these proceedings against Mecon outside the jurisdiction (in practice to give Mecon formal notice of the proceedings). In the ordinary way that application was made ex parte. However, Mecon brought an application seeking to set aside the order granting leave. As an alternative Mecon suggested that these proceedings (insofar as they relate to the claims against it) should be stayed on the basis that what was said to be similar proceedings had previously been commenced in India by persons and entities acting in the interests of IBRC. It was argued that India was a more convenient or appropriate location to deal with the issues in question not least because those acting in IBRC's interests had chosen to instigate proceedings in India prior to Mecon being joined to these Irish proceedings.

1.3 The High Court (Charleton J.) rejected Mecon's application ( Irish Bank Resolution Corporation & ors v. Quinn & ors [2013] IEHC 1). Mecon has appealed to this Court from that rejection. Against that background it is first appropriate to turn to the issues.

2. The Issues

2.1 While 13 grounds of appeal were set out in the notice of appeal filed by Mecon, it is fair to say that the real issues between the parties became a lot clearer in the course of the oral hearing conducted before this Court. In substance there remained three main sets of grounds of appeal.

2.2 First there were grounds concerning the appropriateness of the original order of the High Court to grant leave to serve notice outside of the jurisdiction. It will be necessary to turn to the precise basis on which that leave was granted in due course. It was accepted by both parties at the hearing before this Court that one of the factors which a court granting leave ought properly take into account is whether there is a sufficient basis established for the case against the foreign defendant who is sought to be joined. The principle behind that requirement is that a court, by granting leave, requires a foreign defendant to come to this jurisdiction to defend proceedings. An Irish court should not do so unless there is a sufficient basis established for bringing the case in the first place.

2.3 It would be fair to say that there may have been some differences between the positions of the parties as to the precise threshold which a plaintiff needs to cross in order to establish a sufficient basis for its claim. It would also be fair to say that there were differences between the parties as to the materials on which a court can or should rely in satisfying itself that whatever threshold may be appropriate has been met. In summary, therefore, the first set of issues concerns whether a sufficient case had been established by IBRC to justify requiring Mecon to come to Ireland to defend these proceedings.

2.4 The second set of issues concerns the contention of Mecon that India would be a more appropriate venue for the trial of the issues which arise in these proceedings insofar as they relate to Mecon on the basis of the common law doctrines of forum non conveniens and lis pendens. A series of subsidiary arguments under that broad heading were canvassed.

2.5 The third potential issue concerns the possible impact of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (?the Brussels Regulation?) on the question of the jurisdiction of this Court to stay these proceedings in favour of the proceedings already in existence in India. The case made by IBRC under that heading is that the traditional common law jurisdiction to stay on the basis of convenience no longer subsists in the light of the Brussels Regulation. On the other hand, Mecon argues that the jurisdiction continues to subsist. In that context Mecon suggested before the High Court that, at a minimum, the issue is not acte clair and, should it prove necessary to determine that issue in order to resolve this application, it is suggested that this Court is obliged to refer the matter to the Court of Justice of the European Union under Art. 267 of the Treaty on the Functioning of the European Union.

2.6 In the course of discussion with counsel on both sides during the oral hearing it was agreed that it was logical to consider the second set of issues before going on to determine whether it is necessary to resolve the third question. If, applying established common law principles, it would be appropriate to stay these Irish proceedings, insofar as they relate to Mecon, in favour of the Indian proceedings then it obviously would be necessary to determine whether the jurisdiction of this Court to so stay the proceedings has been displaced by the Brussels Regulation. In those circumstances the third issue would clearly arise including the question of whether a reference is mandated.

2.7 On the other hand, in the event that this Court concluded that the application of established common law principles did not require that the proceedings against Mecon be stayed, then the question of the effect of the Brussels Regulation would be irrelevant. It would follow that it would not be necessary to decide that question. It would, therefore, further follow that it would be inappropriate to make a reference on the point for the issue in question would not require to be determined in order to resolve this appeal.

2.8 In those circumstances it seems to me that the appropriate course of action to adopt is to consider the first two sets of issues and then go on to consider the third issue only if it should prove necessary so to do in the light of the resolution of the second set of issues. The two sets of issues concerned are somewhat standalone but both have, to some extent, their roots in the procedural history both of these proceedings and the relevant Indian proceedings. I, therefore, turn to that history.

3. Procedural History

3.1 Prior to its nationalisation, IBRC (then Anglo Irish Bank) made substantial loans to the Quinn family and to entities connected with them. On the 14th April, 2011, IBRC...