Irish Bank Resolution Corporation Ltd and Others v Quinn and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice Peter Charleton
• Judgment Date: 13 August 2013
• Neutral Citation: [2013] IEHC 1
• Court: High Court
• Date: 13 August 2013

[2013] IEHC 1

THE HIGH COURT

[No. 5843 P/2011]

[No. 120 COM/2012]

Irish Bank Resolution Corporation Ltd & Ors v Quinn & Ors

COMMERCIAL

BETWEEN

IRISH BANK RESOLUTION CORPORATION LIMITED, QUINN INVESTMENTS SWEDEN A.B. AND LEIF BAECKLUND

PLAINTIFFS

AND

SEÁN QUINN, CLARA QUINN, COLETTE QUINN, SEÁN QUINN JR., BRENDA QUINN, AOIFE QUINN, STEPHEN KELLY, PETER DARRAGH QUINN, NIALL MCPARTLAND, INDIAN TRUST A.B., FORFAR OVERSEAS S.A., LOCKERBIE INVESTMENTS S.A., CLONMORE INVESTMENTS S.A., MARFINE INVESTMENTS LIMITED, BLANDUN ENTERPRISES LIMITED, MECON FZE, CJSC, VNESHKONSALT, OOO STROITELNYE TECKNOLOGIL, RLC-DEVELOPMENT AND KAREN WOODS

DEFENDANTS

EEC REG 44/2001

RSC O.11 r1(F)

RSC O.11 r1(G)

RSC O.11 r1(H)

ANALOG DEVICES BV v ZURICH INSURANCE COMPANY 2002 1 IR 272

ABAMA & ORS v GAMA CONSTRUCTION IRELAND LTD & ORS UNREP DUNNE 25.2.2011 2011/1/216 2011 IEHC 308

SPILIADA MARITIME CORPORATION v CANSULEX LTD 1987 1 AC 460

DICEY MORRIS & COLLINS THE CONFLICT OF LAWS 15ED 2012 P 552-553

KARAFARIN BANK v MANSOURY-DARA 2009 AER (D) 28 2009 2 LLR 289

GUBISCH MASCHINENFABRIK KG v PALUMBO (CASE 144/86) 1987 ECR I-04861

EEC REG 44/2001 ART 2(1)

EUROPEAN COMMUNITIES (CIVIL & COMMERCIAL JUDGMENT) REGS SI 52/2002 REG 11

EEC REG 44/2001 ART 6(1)

OWUSU v JACKSON (CASE 281/2002) 2005 ECR I-3855

GOSHAWK DEDICATED LTD v LIFE RECEIVABLE IRELAND LTD 2008 2 ILRM 460

CATALYST INVESTMENT GROUP LTD v LEWINSOHN & ORS 2010 2 WLR 839

GOSHAWK DEDICATED LTD v LIFE RECEIVABLES IRELAND LTD UNREP SUPREME 30.1.2009 2009/23/5709 2009 IESC 7

CONFLICTS OF LAW: Jurisdiction

CONFLICTS OF LAW

Jurisdiction

Motion to stay proceedings - Whether company registered outside European Union improperly joined - Whether Ireland proper forum - Main claim in conspiracy - Whether established on affidavit allegations reasonably capable of being proven in evidence - Appropriate forum - Power to set aside leave to serve outside jurisdiction - Burden of proof - Interests of efficiency in litigation - Relative stage of proceedings - Discretion of court - Analog Devices BV v Zurich Insurance Company [2002] 1 IR 272; Abama v Gama Construction Ireland Ltd [2011] IEHC 308, (Unrep, Dunne J, 25/2/2011); Spiliada Maritime Corporation v Cansulex Limited [1987] 1 AC 460; Karafarin Bank v Masoury-Dara [2009] EWHC 1217; Gubisch Maschinenfabrik KG v Palumbo (Case C 144/86) [1987] ECR I-04861; Owusu v Jackson (Case 281/02) [2005] ECR I-3855; Goshawk Dedicated Ltd v Life Receivables Ireland Ltd [2008] IEHC 90, (Unrep, Clarke J, 27/2/2008); Catalyst Investment Group Ltd v Lewinsohn [2010] 2 WLR 839 and Goshawk Dedicated Ltd v Life Receivables Ireland Ltd [2009] IESC 7, (Unrep, SC, 30/1/2009) considered - EEC Regulation 44/2001, arts 2(1) and 6(1) - European Communities (Civil and Commercial Judgment) Regulations (SI 52/2002), reg 1 - Application refused (2011/5843P - Charleton J - 7/1/2013) [2013] IEHC 1

Irish Bank Resolution Corporation Limited v Quinn

1 Mr. Justice Peter Charleton delivered on the 7th day of January, 2013

2 This is a motion by the defendant Mecon FZE to stay these proceedings on the basis that it, as a corporation registered outside the European Union, has been improperly joined.

3 Overall, this case has its origin in enormous loans made by Anglo Irish Bank, now nationalised as the first plaintiff, to the Quinn family and to an entity which has been referred to as the International Property Group which was controlled by them. On the 14 ^th April, 2011, Anglo Irish Bank called in those loans. A plenary summons was issued against some of the defendants, up to and including Indian Trust AB, in June, 2011. Later that month, the High Court heard an application to join the rest of the defendants in the title of these proceedings. That was granted together with injunctive relief preventing the disposal of assets. On the 30 ^th July, 2012, a statement of claim was served on the defendants. Leave was sought from the High Court to serve a number of these defendants as they were outside the jurisdiction, and not within the European Union; variously in Belize, the United Arab Emirates and Russia.

4 The defendant Mecon is a United Arab Emirates company. It has brought this motion because since December, 2011 it has been a defendant before the High Court of India in Hyderabad in proceedings brought on behalf of these plaintiffs. Those proceedings in India resulted in an injunction on the 5 ^th January, 2012, restraining on an interlocutory basis any dealing which the company might have in shares through which a valuable property in a place in Hyderabad called Hi Tech Park is ultimately owned, it is alleged, by the Quinn family defendants and their entity the International Property Group. After considerable delay, Mecon entered an appearance to that action in India on the 4 ^th December, 2012. Any participation of that company in these proceedings in Ireland is under protest that it should never have been joined. Mecon argues that the proper forum for the disposal of any issue as to the ownership of the shares through which the property in Hyderabad is owned is the High Court of India. The plaintiffs argue that the proper forum is Ireland and assert that this is so, not only because they allege a wider issue of which this defendant is merely a part, but also because Council Regulation E. C./44/2001 of 22 December, 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, O.J. L 012/1 16.1.2001; commonly called the 'Brussels I Regulation' allows the court no discretion but to hear and dispose of this claim.

5 Mecon was joined in these proceedings under Order 11 Rule 1 (f), (g) and (h) of the Rules of the Superior Courts. This provides that service outside the European Union may be made of notice of an originating summons in respect of any action founded on a tort committed within the jurisdiction; where an injunction is sought as to anything to be done within the jurisdiction; and where an entity which is outside the jurisdiction is a necessary or proper party to an action properly brought against some other person duly served within the jurisdiction.

The wrongs alleged

6 Essentially, the plaintiffs allege that the defendants are in control of extremely valuable property in various parts of the world, including Russia, India and Ukraine, to a value in excess of €500 million and generating an annual income of an estimated €30 million. The specific property in issue in India at Hi Tech Park in Hyderabad with which Mecon is alleged to be concerned through acquiring shares at undervalue in Mack Soft is claimed to be worth around €60 million, producing an income of around €4 million annually. These several properties should be used, it is alleged by the plaintiffs in the event of success by them in the Irish litigation, to repay debts to Anglo Irish Bank. Complexity, obfuscation and concealment are alleged to surround the ownership of the properties. It is claimed that the properties are deliberately distanced from the ownership of the Quinn family and their corporate vehicles and it is further claimed that this obscurity arises from a deliberate scheme to squirrel away assets so that any judgment in favour of the bank will never be satisfied. In short, a conspiracy is alleged and, because of orders from the High Court in Ireland restraining dealings with that property, that conspiracy is claimed to extend to the unlawful undermining of the authority of the courts. In addition, since the original loans to Anglo Irish Bank were backed by the security of a share charge in favour of the bank, various breaches of contract are alleged. Hence, in the prayer for relief in the statement of claim various injunctive orders are sought against the specific defendants to undermine and reverse the alleged chicanery complained of, to obtain clarity as to the ownership of assets and the control thereof, and to obtain damages for breach of contract and conspiracy.

7 The main claim is in conspiracy. This is alleged to have been perpetrated through:

8 1) an unlawful means conspiracy whereby the directors of the defendant corporations failed in their duties of care and fidelity towards the companies they were serving and instead sold corporate assets at an undervalue;

9 2) an agreement to breach the share pledges to Anglo Irish Bank through the means described at (1) above;

10 3) undermining and disregarding the orders of Clarke J. granted by the High Court in Ireland on the the 27 ^th June, 2011;

11 4) forging and backdating documents in a plan of deception in furtherance of the aims in the foregoing paragraphs; and

12 5) generally engaging in a scheme to make the defendants that apparently held valuable assets, and the individual defendants owning shares in them, judgment proof.

The evidence alleged

13 In an application of this kind, it would be inadvisable to simply take the statement of claim as being capable of proof as against the individual defendant Mecon. Rather, the court should come to a view as to whether it has been established on affidavit that whatever is alleged may be reasonably capable of being proven in evidence and amounts to a case upon which a judge could reasonably hold in favour of the party asserting the wrong or wrongs.

14 Much of what is alleged arises from evidence given in proceedings for contempt of court against individual members of the Quinn family, particularly Seán Quinn. Other evidence comes from investigations into instructions allegedly given by that defendant to members of his family. This is coupled, it is claimed, with independent scrutiny of various transactions. The delay in serving a statement of claim, and the late joinder of many of the defendants arises, the plaintiffs say, from the necessity to investigate the organs...