Microsoft Ireland Operations Ltd (plaintiff) v EMI International Electronics Ltd and EIM Computerised Technologies Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice de Valera
• Judgment Date: 09 June 2010
• Neutral Citation: [2010] IEHC 228
• Court: High Court
• Docket Number: Record No. 1900P/2005
• Date: 09 June 2010

[2010] IEHC 228

THE HIGH COURT

Record No. 1900P/2005

Microsoft Ireland Operations Ltd v EIM International Electronics Ltd & EIM Computerised Technologies Ltd

Between

MICROSOFT IRELAND OPERATIONS LIMITED

Plaintiff

AND

EIM INTERNATIONAL ELECTRONICS LIMITED AND EIM COMPUTERISED TECHNOLOGIES LIMITED

Defendant

RSC O.12 r26

CONVENTION ON THE SERVICE ABROAD OF JUDICIAL & EXTRAJUDICIAL DOCUMENTS IN CIVIL OR COMMERCIAL MATTERS 15.11.1965

RSC O.11

RSC O.11B

RSC O.11 r1(E)(iii)

SHIPSEY v BRITISH & SOUTH AMERICAN STEAM NAVIGATION CO LTD 1936 IR 65

RSC 1905 O.11

PARKER v SCHULLER 1901 17 TLR 299

RSC O.11 r2

RSC O.11A

SPIELBERG v ROWLEY & ORS UNREP FINLAY-GEOGHEGAN 26.11.2004 2004/47/10870 2004 IEHC 384

EEC REG 44/2001 ART 22(2)

SCHMIDT v HOME SECRETARY OF THE GOVT OF THE UNITED KINGDOM & ORS 1995 1 ILRM 301 1995/5/1584

KUTCHERA v BUCKINGHAM INTERNATIONAL HOLDINGS LTD 1988 IR 61 1988 ILRM 1 1987/3/912

RSC O.28 r11

EEC REG 44/2001 ART 23

BINCHY IRISH CONFLICTS OF LAW 1988 124

BRITISH AEROSPACE PLC v DEE HOWARD CO 1993 1 LLOYDS 368

COLLINS & ORS DICEY MORRIS & COLLINS ON THE CONFLICT OF LAWS 14ED 2006

CONFLICT OF LAWS

Jurisdiction

Service outside jurisdiction - Set aside service - Alleged defects in procedure - Incorrect order and rule cited in order - Contract - Breach of contract - Exclusive jurisdiction clause - Forum non conveniens -Factors to be considered - Whether order granting service outside jurisdiction defective - Whether service should be set aside - Whether alleged defects rendered order invalid - Whether defendants should be held to exclusive jurisdiction clause - Whether court had discretion to disregard exclusive jurisdiction clause - Kutchera v Buckingham International Holdings Ltd [1988] IR 61 applied; Aerospace plc v Dee Howard Co [1993] 1 Lloyds Rep 368 followed; Parker v Schuller (1901) 17 TLR 299, Shipsey v British and South American Steam Navigation Co Ltd [1936] IR 65, Spielberg v Rowley [2004] IEHC 384 (Unrep, Finlay Geoghegan J, 26/11/2004) and Norburt Schmidt v The Home Secretary of the Government of the United Kingdom [1995] ILRM 301 considered - Rules of the Superior Courts 1986 (SI 15/1986) O 12, r 26 & O 11, rr 1,2 -- Application dismissed (2005/1900P - de Valera J - 9/6/2010) [2010] IEHC 228

Microsoft Ireland Operations Ltd v EIM International Electronics Ltd

Facts: The defendants sought an order granted to serve notice of the proceedings outside of the jurisdiction. The defendants claimed that the Israeli courts were the appropriate forum to determine the dispute between the parties and that Ireland was a forum non conveniens. The plaintiff company incorporated in Ireland had entered into a standard form distribution agreement with the defendant, incorporated in Israel. The defendants claimed that the order granting leave to serve warranted being set aside on the grounds that it did not recite the proper provision of the Rules of Court pursuant to which it was made, prejudicing the Israeli witnesses in the proceedings. The defendants also submitted that the Statement of Claim was delivered out of time and differed from the claim as described previously and that cost and convenience were also relevant considerations. The plaintiff sought to rely upon Council Regulation (EC) 44/2001, which was disputed by the defendants on the basis that this was the first time that the defendants had sought to rely upon the provision. The defendants contended that an exclusive jurisdiction clause in a non-negotiated contract from a powerful global corporation could not have been agreed by the plaintiffs and that there were more reasons, people and events which connected the proceedings with Israel.

Held by DeValera J. that the parties had entered into two contracts which contained clauses to the effect that Ireland was the relevant jurisdiction for the resolution of any dispute arising out of the agreements. The simple fact of the defendants' witnesses having to travel to Ireland did not mean that it would be more sensible to have the trial in Israel. The defendants were not in a position to indicate the existence of unforeseeable circumstances at the time that they entered the contract and there was no valid reason why they should not be held to their agreement. The other Israeli proceedings involved a completely different cause of action- the current matter involved a contract claim whereas the Israeli litigation was tort based. Given the existence of the jurisdiction clause and the appropriateness of the procedures so far the Court was satisfied that this much was sufficient to warrant a refusal of the orders sought and the Court was not obliged to carry out any fuller investigation of the forum non conveniens issue. However, Ireland was the appropriate forum. There were no compelling reasons to allow the defendants to avoid their agreement to confer jurisdiction on the Irish courts and the application of the defendants would be dismissed.

Reporter: E.F.

Mr. Justice de Valera

1 This matter involves an application by the defendants for an order pursuant to Order 12, rule 26 of the Rules of the Superior Courts, or pursuant to the inherent jurisdiction of the Court, setting aside the service of the plenary summons or staying the proceedings on the grounds offorum non conveniens. The defendants further seek an order discharging the order of Quirke J. made on 31^st May, 2005 which granted the plaintiff liberty to serve notice of the plenary summons on the defendants outside the jurisdiction. The defendants claim that the Israeli courts are the appropriate forum to determine the dispute between the parties and that Ireland is a forum non conveniens.

2 The plaintiff, a company incorporated in Ireland, and the defendant companies, incorporated under the laws of the State of Israel, entered into a standard form distribution agreement for the period between 1^st April, 2003 and 30^th June, 2005. The business of both defendant companies, both part of the EIM Group, involves the sale and supply of computer software and is carried on exclusively in Israel.

3 Upon obtaining the Order for service out of the jurisdiction, the plaintiff proceeded to serve the defendants pursuant to the Hague Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil or Commercial Matters of 15^th November, 1965 ("the Hague Convention"). The plaintiff's solicitors, Matheson Ormsby Prentice, contacted the relevant section of the Israeli Directorate of Courts (the relevant authority in Israel pursuant to the Hague Convention) to effect service of the proceedings on the defendants.

4 The defendants claim that the order granting leave to serve the proceedings outside the jurisdiction should be set aside because it did not recite the proper provision of the Rules of Court pursuant to which it was made and which it was required to do and because they would be greatly prejudiced if the proceedings were to be heard in Ireland given that the majority of the witnesses in the case are Israeli citizens living and based in Israel.

5 The defendants refer to Order 11 of the Rules of the Superior Courts which provides:

6 2 "1. Provided that an originating summonsis not a summons to which Order 11A applies, service out of the jurisdiction of an originating summons or notice of an originating summons may be allowed by the Court whenever - …

7 (e) the action is brought to enforce, rescind, dissolve, annul, or otherwise affect a contract, or to recover damages or other relief for or in respect of the breach of a contract, where any one of the following three conditions is fulfilled: …[or] (iii) the contract is, by its terms or by implication to be governed by Irish law…" (Emphasis added)

8 Order 11 states that service out of the jurisdiction may, not must, be allowed. The fact that one or more of the conditions specified in Order 11 have been fulfilled does not entitle the plaintiff as of right to succeed in an application for leave to effect service out of the jurisdiction. The matter is one entirely at the discretion of the court. Order 11 is exhaustive and is applicable only to the matters specifically listed in the Order itself.

9 The defendants say the order made on 31^st May, 2005 was defective because it was expressed in the order that the intended proceedings fell within the class of action set out in "Order 11 Rule B" of the Rules of the Superior Courts. The defendants submit that in this regard the order was clearly defective in that Order 11B does not list any class of action in respect of which the High Court has jurisdiction to make orders giving liberty to issue and serve proceedings outside the jurisdiction.

10 The Affidavit upon which the application for leave to serve out of the jurisdiction was grounded sets out Order 11 Rule 1(e)(iii) as the basis for the application, not Order 11B, which is the provision mentioned in the Order itself. The defendant submits, therefore, that the order is fatally flawed. In this regard, the defendant relies onShipsey v. British and South American Steam Navigation Co. Ltd [1936] I.R. 65, which concerned an application for leave to serve out of the jurisdiction under Order 11 of the then 1905 Rules of the Superior Courts. In that case, the Supreme Court affirmed the necessity for any such order specifically to mention the particular class of action within which the court considered the intended action to fall. Kennedy C.J. stated, at p. 83:

"…I think that it is very important that, in a matter of the international comity of courts, the High Court, when making an order giving leave for service out of the jurisdiction, should specifically mention in the order the particular class of action within which the court decides the intended action to fall, so as to confine jurisdiction to allow service out of the jurisdiction...