Joint Stock Company Togliattiazot v Eurotoaz Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Noonan
• Judgment Date: 03 May 2019
• Neutral Citation: [2019] IEHC 342
• Docket Number: [2010 No. 7155 P.]
• Court: High Court
• Date: 03 May 2019

BETWEEN

JOINT STOCK COMPANY TOGLIATTIAZOT

PLAINTIFF

AND

EUROTOAZ LIMITED

DEFENDANT

[2019] IEHC 342

Noonan J.

[2010 No. 7155 P.]

THE HIGH COURT

Discontinuance – Costs – Defamation – Plaintiff seeking leave to discontinue proceedings – Whether injustice would be occasioned to the defendant by the granting of leave to discontinue to the plaintiff

Facts: The defendant, Eurotoaz Ltd, by two letters dated respectively the 15th and 19th October, 2009, wrote to three administrative entities in the Russian Federation claiming to be entitled to shares in the plaintiff, Joint Stock Company Togliattiazot, and further that the plaintiff fraudulently and unlawfully rejected the defendant’s claim to the shares. In May of 2010, the defendant issued proceedings against the plaintiff in the Russian Federation seeking to establish its right to the shares (the Russian proceedings). On 26th July, 2010, the plaintiff issued proceedings against the defendant in Ireland’s jurisdiction (the Irish proceedings) in which the plaintiff claimed, inter alia, damages for defamation arising out of the publication of the letters in Russia. By motion dated 12th May, 2011, the defendant sought to challenge the jurisdiction of the Irish Courts to hear the claim on the basis that Ireland was forum non conveniens for the resolution of the dispute. That motion was abandoned by the defendant and was struck out with costs to the plaintiff on the 19th December, 2011. The plaintiff set the matter down for trial in the non-jury list on 14th January, 2013 and the defendant took objection to this course indicating that it required trial by judge and jury. On 4th July, 2013 the plaintiff issued a motion seeking an order directing trial of the proceedings by judge alone which was opposed by the defendant. On 31st July, 2013, the High Court made an order directing trial by judge alone. That order was appealed by the defendant to the Supreme Court. Following the establishment of the Court of Appeal, the appeal was transferred to that court. The appeal was listed in the call-over list of the Court of Appeal on 2nd May, 2018. Directions were given on that date and it was adjourned to the 1st November, 2018 for the purposes of allocating a hearing date for the appeal. On 20th July, 2018, the defendant’s solicitors wrote to the plaintiff’s solicitors indicating that the defendant intended to withdraw the appeal. On 15th October, 2018, the defendant gave one month’s notice of intention to certify the matter as ready for trial and to apply for a hearing date in accordance with practice direction HC75. The matter appeared in the Court of Appeal list on 1st November, 2018 when the appeal was struck out with costs to the plaintiff. On 31st October, 2018, the plaintiff’s solicitors indicated by telephone to the defendant’s solicitors that the plaintiff intended to discontinue the proceedings and on 15th November, 2018, wrote formally to confirm that position. In that letter it was suggested that the proceedings be struck out with no order as to costs on the basis that the plaintiff would not enforce the costs orders previously made in its favour. The defendant responded that it was not agreeable to this course and wished the matter to proceed to trial. The plaintiff applied to the High Court for leave to discontinue the proceedings pursuant to O. 26, r. 1 of the Rules of the Superior Courts.

Held by Noonan J that the defendant had not satisfied him that any injustice would be occasioned to it by the granting of leave to discontinue to the plaintiff. Noonan J noted that the plaintiff in its motion sought discontinuance with no order as to the costs, save for those already made in the proceedings. Noonan J held that the default position is that the discontinuing plaintiff should pay the defendant’s costs and to his mind nothing had been advanced by the plaintiff which would justify a departure from that position. Noonan J was further of the view that the justice of the case required that the plaintiff should not seek to enforce any of the costs orders it had already obtained in its favour.

Noonan J held that he would grant leave to discontinue on the plaintiff giving an undertaking to the court not to enforce those costs orders together with an undertaking not to institute any further proceedings against the defendant in Ireland’s jurisdiction arising from the same cause of action.

Leave granted.

JUDGMENT of Mr. Justice Noonan delivered on the 3rd day of May, 2019

1 This application is brought by the plaintiff for leave to discontinue these proceedings pursuant to O. 26, r. 1 of the Rules of the Superior Courts. It provides as follows:

‘1. The plaintiff may, at any time before receipt of the defendant's defence, or after the receipt thereof before taking any other proceeding in the action (save any interlocutory application), by notice in writing in the Form No. 20 in Appendix C, wholly discontinue his action against all or any of the defendants or withdraw any part or parts of his alleged cause of complaint, and thereupon he shall pay such defendant's costs of the action, or, if the action be not wholly discontinued, the costs occasioned by the matter so withdrawn. Such costs shall be taxed. The plaintiff may, however, at any time prior to the setting down of any cause for trial wholly discontinue his action, with or without costs to be paid by any party, upon producing to the proper officer a consent in writing signed by all parties or by their solicitors and such costs (if any) shall be taxed. Such discontinuance or withdrawal, as the case may be, shall not be a defence to any subsequent action. Save as in this rule otherwise provided, it shall not be competent for the plaintiff to discontinue the action without leave of the Court, but the Court may before, or at, or after, the hearing or trial, upon such terms as to costs, and as to any other action, and otherwise, as may be just, order the action to be discontinued, or any part of the alleged cause of complaint to be struck out. The Court may, in like manner, and with the like discretion as to terms, upon the application of a defendant, order the whole or any part of his alleged grounds of defence or counterclaim to be withdrawn or struck out, but it shall not be competent to a defendant to withdraw his defence, or any part thereof, without such leave.’

Factual and Procedural Background

2 The plaintiff is a very substantial undertaking carrying on business in the Russian Federation. It is said to be the world's largest producer of ammonia. The defendant is a limited liability company registered in Ireland. These proceedings concern allegations about the defendant's alleged entitlement to a shareholding in the plaintiff. The defendant does not carry on any business in this jurisdiction or elsewhere. It appears to have little or no assets beyond its claimed shares in the plaintiff.

3 By two letters dated respectively the 15th and 19th October, 2009, the defendant wrote to three administrative entities in the Russian Federation claiming to be entitled to shares in the plaintiff worth more than one billion roubles and further that the plaintiff fraudulently and unlawfully rejected the defendant's claim to the shares. The shares were alleged then to have amounted to 10% of the shareholding in the plaintiff but was subsequently diluted to 4.4%. No complaint is made by the defendant of the dilution.

4 The letters in question were written in the Russian language and were published only to the three parties in Russia. In May of 2010, the defendant issued proceedings against the plaintiff in the Russian Federation seeking to establish its right to the shares and claiming that its rights had been fraudulently denied by the plaintiff (‘the Russian proceedings’). On 26th July, 2010, the plaintiff issued proceedings against the defendant in this jurisdiction (‘the Irish proceedings’) in which the plaintiff claims, inter alia, damages for defamation arising out of the publication of the letters in Russia.

5 The plaintiff also claims certain reliefs under Russian law and an injunction restraining the defendant from publishing like words defamatory of the plaintiff or denigrating its business reputation. In an affidavit sworn in opposition to this motion by a director of the defendant, Andrey Babichev, Mr. Babichev avers that he believes that the proceedings in Ireland were issued by the plaintiff in retaliation for the Russian proceedings brought by the defendant. In its defence, the defendant pleads that the Irish proceedings were brought by the plaintiff in essence for the purpose of stifling the Russian proceedings.

6 The proceedings in both jurisdictions followed a protracted course. By motion dated 12th May, 2011, the defendant sought to challenge the jurisdiction of the Irish Courts to hear the claim on the basis that Ireland was forum non conveniens for the resolution of the dispute. That motion was abandoned by the defendant and was struck out with costs to the plaintiff on the 19th December, 2011. The plaintiff set the matter down for trial in the non-jury list on 14th January, 2013 and the defendant took objection to this course indicating that it required trial by judge and jury. On 4th July, 2013 the plaintiff issued a motion seeking an order directing trial of the proceedings by Judge alone which was opposed by the defendant. On 31st July, 2013, the High Court made an order directing trial by judge alone.

7 That Order was appealed by the defendant to the Supreme Court. Following the establishment of the Court of Appeal, the appeal was transferred to that court. Little or nothing happened for the best part of five years until the appeal was listed in the call-over list of the Court of Appeal on 2nd May, 2018. Directions were given on that date and it was adjourned to the 1st November, 2018 for the purposes of allocating a hearing date for the...