Meridian Communications Ltd & anor -v- Eircell Ltd, [2001] IESC 42 (2001)

Docket Number:109/01
Party Name:Meridian Communications Ltd & anor, Eircell Ltd
Judge:McGuinness J.
 
FREE EXCERPT

THE SUPREME COURT

No. 109/01McGuinness, J.

Hardiman, J.

Fennelly, J.

BETWEEN

MERIDIAN COMMUNICATIONS LIMITED AND CELLULAR THREE TELECOMMUNICATIONS LIMITED

APPELLANTS/PLAINTIFFS

AND

EIRCELL LIMITED

RESPONDENT/DEFENDANT

REASONS FOR THE ORDER OF THE COURT DATED 27TH APRIL 2001, DELIVERED BY MRS. JUSTICE McGUINNESS THE 10TH DAY OF MAY 2001

This is an appeal from an order of Lavan J. whereby he refused the Appellants/Plaintiffs application for interlocutory relief.

By notice of motion dated the 18th April 2001 the Appellants/Plaintiffs, Meridian Communications Limited and Cellular Three Telecommunications Limited ("Meridian") sought the following injunctive reliefs:-

"(1) An injunction restraining the Defendant by itself its servants or agents or otherwise howsoever from terminating the delivery of the supply of mobile telephony to the Plaintiff or any or its subscribers without the prior agreement of Meridian Communications Limited the first named Plaintiff.

(2) An order directing Eircell to recommence provision of international call services and premium services to Meridian pending further order.

(3) An order directing Eirecell to reconnect disconnected numbers pending further order.

(4) An order restraining Eircell from presenting a petition to wind-up Meridian without the leave of this honourable court."

On 18th April 2001 the Plaintiffs made an ex-parte application to Herbert J. who made an interim order in the terms of paragraphs 1 and 4 of the Notice of Motion. The Plaintiffs gave the normal undertaking as to damages and in addition undertook not to transfer, assign or otherwise dispose of all or any part of their subscriber base pending the hearing of the interlocutory application for an injunction.

The matter then came on for hearing before Lavan J. on the 25th April 2001. The learned judge refused the relief sought and discharged the interim order made by Herbert J. The Appellants/Plaintiffs appealed to this Court. The appeal was heard as a matter of urgency on the 27th April 2001. Following the hearing the Court granted an interlocutory injunction in the terms of paragraphs 1 and 4 of the original notice of motion, such injunction to remain in force for a period of two weeks only expiring at 4 p.m. on Friday the 11th day of May 2001. A number of conditions, as set out in the order of this Court, were attached to the injunction. The matter was listed for mention on the 10th May 2001. Owing to the lateness of the hour when the hearing concluded and the order of this Court was made, the Court reserved to a later date the statement of the reasons for its decision.

The dispute between the parties has been lengthy and complex. The original proceedings between them were at hearing before O'Higgins J. in the High Court for ninety five days. Following a number of interim judgments the proceedings culminated in a lengthy (158-page) judgment delivered by O'Higgins J. on 5th April 2001. The learned High Court judge then put the matter back for mention to permit the parties and their legal advisers to read and study his judgment and to make submissions. On the 24th April it was agreed that submissions on costs and other issues should be heard by O'Higgins J. on 15th May 2001. This Court is informed that it is the intention of Meridian to appeal against a number of the aspects of the decision of the High Court in these proceedings.

In the meantime the events which gave rise to Meridian's present application for injunctive relief occurred.

The background and history of the commercial relations between the parties is set out fully and with admirable clarity by O'Higgins J. in his judgment of 5th April 2001. There is no need to repeat it here. For the purposes of the present dispute a summary of the bare bones of the matter is sufficient. From in or about 1997 onwards a Volume Discount Agreement (VDA) existed between Meridian and Eircell. This agreement enabled Meridian to rent mobile telephone lines in bulk from Eircell at a considerable discount. Meridian then rented these lines on to individual subscribers at an overall price which was lower than that normally charged to subscribers by Eircell but which enabled Meridian to make a profit on the transaction. It appears that at the time when the injunction proceedings came before this Court Meridian had a base of some 20,000 subscribers.

For reasons which can readily be appreciated Eircell was not particularly happy with the expansion of Meridian's business which had occurred from November 1998 onwards and sought to bring the VDA to an end when the then current agreement expired. Meridian brought proceedings to require Eircell to continue to supply air time at a discount on the expiry of the VDA. A number of other issues also arose in the proceedings. In the first judgment of O'Higgins J. which was delivered on 4th April 2000 he held inter alia that the Plaintiffs were not entitled to enforce the renewal of the VDA. The proceedings before O'Higgins J. continued at hearing to deal with a number of other issues including breach of contract and breach of competition law. In his judgment of the 5th April 2001 O'Higgins J. held for the Plaintiffs on some of the...

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