High Court refuses stay of proceedings against UAE defendant under Brussels I Regulation despite foreign litigation.

Neutral Citation [2013] IEHC 1

THE HIGH COURT

COMMERCIAL

[2011 No. 5843 P]

[2012 No. 120 COM]

BETWEEN

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

PLAINTIFFS

AND

SEÁN QUINN, CIARA 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

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

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.

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 14th 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 30th 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.

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 5th 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 4th 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.

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

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.

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

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;

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

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

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

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

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.

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 through which the strategy of alleged wrongdoing was performed. Mecon is but one of the companies through which assets

held by other defendants were dissipated and in respect of which asset dilution of various kinds is claimed to have taken place. In

that respect, the approach of the plaintiffs is that Mecon is no different from other foreign companies who are defendants in this case

and who are joined in the proceedings because they held assets on behalf of the Quinn family and are claimed to be the subject of

stratagems to dilute their value. Whether the evidence is credible or not cannot be judged at this stage.

On the 31st March, 2011, the defendant Seán Quinn is claimed to have instructed the defendant Peter Darragh Quinn to begin moving

assets from the Quinn family property company; what has been referred to in this application as the International Property Group.

There is some degree of evidence that assets held through a complex corporate structure over several levels, of which the companies

holding the real property assets would be at the lowest level, were to be transferred out of the lawful ownership of these companies

and into new entities in various countries around the world. These new entities, under the alleged scheme of asset proofing, would

allegedly take the value of the assets without giving value in return. Through a different structure, one that bypassed that made

transparent by investigations into the International Property Group, these transferred assets would then be secretly held for individual

members of the Quinn family. It is demonstrated that property appears to be owned through Quinn Investments Sweden through a

chain downwards to Quinn Logistics Sweden AB to Quinn Logistics India to a corporation in India called Mack Soft. Also involved in

this structure of ownership are said to be companies called Quinn Way and Quinn Land. What the plaintiffs have produced is a

reasonable indication of proof in respect that assets were taken out of the relevant companies holding them. This was done through

either: a dilution of the shares held by a process of issuing further share capital for minimal value that did not reflect the property

balance sheet; or by running up contrived debts to straw corporations or men of straw who were thus enabled to act against the

companies thereby contriving their winding up with, typically, the sale of company assets at a serious undervalue to other

corporations controlled by the Quinn family. Part of the claimed proof of this is through similar fact evidence. It is alleged as part of

these proceedings that Russian assets were transferred in this way to Russian individuals or companies on the basis of a gross

undervalue. What happened in India is claimed to be of that pattern, but operating the unjustifiable increase in share capital

stratagem.

On the 10th June, 2011, an extraordinary general meeting of Mack Soft was held in Cavan, Ireland. As a consequence of resolutions

passed at a meeting, 300,000 new equity shares were issued in that corporation; the plaintiffs claim for no good reason. It is then

alleged that Peter Darragh Quinn travelled to Dubai and organised the acquisition of further corporate entities in Panama and Belize

and perhaps other places as well. These were the corporations that were to acquire, at an undervalue, new shares issued in valuable

Quinn companies. On the 22nd June, 2011, the newly issued shares in Mack Soft were transferred to the defendant Mecon. This is

alleged to have been done through a Dubai company called Senat FZC. Some evidence has been produced which establishes that it is

reasonably possible to prove that this company Senat FZC organised the transfer of the relevant shares in Mack Soft to Mecon.

As against this disturbing narrative, the defendant Mecon has eloquently argued through counsel that:

1) there is no evidence at all that Mecon is owned or controlled by the Quinn family or by any of their interests;

2) merely receiving an asset is not an unlawful act and, more pertinently, the reception of an asset is not an action in

furtherance of a conspiracy; and

3) such circumstantial evidence as has been produced is insufficient to further the allegations made that purport to turn a

commercial transaction into a sham in furtherance of asset proofing.

Key to any such proof is the allegation that the shares of Mack Soft through which the property in Hyderabad was held had a

particular value according to the number of shares in relation to the corporate assets. Sale at a bad value may prove little. Sale at a

gross undervalue is a factor which, if unexplained, may allow a court to draw an appropriate inference. Here the evidence claims the

dilution of control over the asset held by the corporation in respect of which the extraordinary general meeting was held from about

99% to about 2.5%; majority control thus slipping away to Mecon. If that is true, that fact taken together with other facts may

constitute a reasonable level of proof.

In order to control this alleged ruse, proceedings were issued before the High Court in India and limited injunctions were granted in

January, 2012 stopping Mecon acting as true owners of the shares acquired in Mack Soft. Without that injunction, the relevant asset,

it is claimed, would simply disappear through Mecon into ownership apparently, but not truly, outside the Quinn family or be held by

Mecon as an asset to be dealt with through that corporate structure as if it had no relationship to the events whereby it had come to

control the property. Also relevant to the defence argument on behalf of Mecon is another line of relief sought by the plaintiffs. It is

claimed that Anglo Irish Bank took share pledges for consideration as security for loans over a number of the corporate defendants,

including Quinn Finance and Quinn Investments Sweden AB, as to the entirety of the shares held in that way in a number of subsidiary

companies. The relevant transaction is claimed to be captured by this pledge. These pledge agreements required that the relevant

company in the Quinn family structure would not issue shares unless the appropriate share certificates were lodged with the bank. It

is asserted that the shares pledged constituted 100% of the share capital of each company. It is further claimed that each such

pledge included an undertaking not to do or cause to be done anything which could reasonably be expected to materially adversely

impact on the value of the shares. This, it seems reasonable on the state of the evidence before this Court to argue, extended down

to shareholding in subsidiaries whereby real estate in various jurisdictions was held.

In this way, breaches of contract are also alleged. Whether in tort or in contract, reasonable evidence that may be capable of proof

at trial has been demonstrated that dilution of share capital in Mack Soft and into Mecon, in parallel with the relevant companies,

would, if not arrested by injunctive relief in Ireland and in India, have the consequence of a gross diminution in asset value. One is

entitled to wonder what it is that Mecon actually does and who controls that corporation and for what purpose? Mecon has not

explained what it is beyond a bald assertion that it is not a Quinn controlled company. Nor is the apparent value discrepancy in the

transaction explained away at this point. None of this, however, can be taken pejoratively against any lawyer acting in good faith on

instructions.

Appropriate forum

Two arguments are advanced by Mecon for staying the proceedings against Mecon or setting aside the High Court order to serve

outside Ireland. The argument based on the Brussels I Regulation is said by the plaintiffs to be determinative in favour of the

plaintiffs. If it is not, the general argument advanced by Mecon is that the High Court in Ireland is not the appropriate forum

particularly as Mecon is at the receiving end of litigation to similar effect in India. I will deal with the appropriate forum argument first.

It is well established that the power of the court to set aside leave to serve notice of proceedings outside the jurisdiction is a matter

of discretion and that the burden of proof rests with the moving party, namely Mecon, to establish the availability of another forum

which is clearly more appropriate; Analog Devices B.V. v. Zurich Insurance Company [2002] 1 I.R. 272. Where it is established that

another forum outside the European Union is more appropriate for the resolution of the issues between the parties, the burden of

proof then shifts to the plaintiff, the party joining such defendant, to demonstrate why the application to stay the proceedings should

be refused; Abama and Others v. Gama Construction Ireland Ltd. and Others [2011] IEHC 308. The judgement of Lord Goff in Spiliada

Maritime Corporation v. Cansulex Limited [1987] 1 A.C. 460 was cited with approval in these cases and the various principles

enunciated by him have been reduced to seven propositions by the editors of Dicey, Morris and Collins, The Conflict of Laws, 15th

Ed., (London, 2012) at pages 552-553. While some of these are repetitive, nonetheless they provide a handy anchor point:

Firstly, in general the legal burden of proof rests on the defendant to persuade the court to exercise its discretion to

grant a stay, although the evidential burden will rest on a party who seeks to establish the existence of matters which

will assist him in persuading the court to exercise its discretion in his favour. Secondly, if the court is satisfied by the

defendant that there is another available forum which is clearly a more appropriate forum for the trial of the action, the

burden of proof will shift to the claimant to show that there are special circumstances by reason of which justice requires

that the trial should nevertheless take place in England. Thirdly, the burden on the defendant is not just to show that

England is not just the natural or appropriate forum, but to establish that there is another forum which is clearly or

distinctly more appropriate than the English forum; accordingly, where (as in some commercial disputes) there is no

particular forum which can be described as the natural forum, there will be no reason to grant a stay. Fourthly, the court

will look to see what factors there are which point in the direction of another forum as being the "natural forum", i.e. that

with which the action has the most real and substantial connection. These will include factors affecting convenience or

expense (such as availability of witnesses) and such other factors as the law governing the transaction and the places

where the parties reside or carry on business, and also whether the claim is part of a larger overall dispute which would

be damaged by being fragmented. Fifthly, if the court concludes at that stage that there is no other available forum

which is clearly more appropriate for the trial of the action, the court will ordinarily refuse a stay. Sixthly, if, however, the

court concludes that there is some other available forum which prima facie is clearly the more appropriate, it will ordinarily

grant to stay unless there are circumstances by reason of which justice requires that a stay should not be granted. In

that enquiry, the court will consider all the circumstances of the case, including circumstances which go beyond those

taken into account when considering connecting factors with other jurisdictions. Seventhly, this day will not be refused

simply because the claimant will thereby be deprived of "a legitimate personal or juridical advantage", provided that the

court is satisfied that substantial justice would be done in the available appropriate forum.

In this action, it is a legitimate question to ask what the effect of a stay would be on the overall conduct of litigation which the court

is entitled to presume, because it is reasonably capable of being proven, has been initiated in good faith. It is appropriate that the

interests of efficiency in litigation should be taken into account. Where, as in this action, there are multiple defendants it is

appropriate to question whether the result of a stay of these proceedings against Mecon would be to force the plaintiffs to bring their

claim in two separate sets of proceedings. That is hard to justify since such a course would not only give rise to inconvenience due

to multiplicity of courts in different jurisdictions but would also raise the spectre of witnesses in the main action being unavailable to

travel abroad, such witnesses not being amenable to summons by a foreign court, thus leading to the potentially serious consequence

of inconsistent conclusions in Ireland and in India on the main issues.

As between Ireland and India, it is claimed that, since an action has already begun before the High Court of India, the principle of lis

alibi pendens should bar any future action against this defendant which has been subject to injunctive relief already in that

jurisdiction. The fact that a defendant has been already acted against in a foreign jurisdiction does not automatically entitle that

defendant to a stay of domestic proceedings. There can be many reasons why this is so. Dicey, Morris and Collins observe at 563

that such foreign proceedings may have been initiated by the domestic defendant for the purpose of demonstrating that a competing

jurisdiction exists; as where a defendant in a foreign jurisdiction initiates what would amount to a counterclaim to the domestic

proceedings but as a plaintiff in the foreign action. Similarly, the court must weigh the appropriateness of the stage at which the

alternative proceedings are at: this may be from, at one extreme, initiation as a prophylactic or the grant of protective injunctive

relief that would otherwise be unavailable to, at the other extreme, a demonstration that both parties have substantively embarked

on a course that has the hallmark of a determination to proceed expeditiously to trial. These are but relevant factors. Whereas the

stage of preparation for trial before a foreign forum provides a strong indication as to how the discretion of the court to order a stay

of domestic proceedings should be exercised, even still all the factors must be weighed and that issue alone is not necessarily

decisive. Sometimes a plaintiff may be left with little option but to seek some form of relief before a foreign court notwithstanding

that it has already brought a domestic suit against the same defendant. For the purpose of enforcement, for instance, it may be

appropriate to bring proceedings in different jurisdictions if the effect of the grant of relief before the domestic forum would be

problematic abroad; Karafarin Bank v. Mansoury-Dara [2009] EWHC 1217. Traditionally, while cases where an action has already

begun in another jurisdiction have been treated as a special case, the more modern approach is to treat the existence of

simultaneous proceedings as no more than a factor relevant to the determination of the appropriate forum; Dicey, Morris and Collins

563. Crucial to any such determination is what the case is really about. That analysis always has two elements; what wrongs are

alleged and what remedies will right the wrongs complained of.

It is argued that since the agreement regarding the share transaction was performed in India, subject to the laws of India, and that

the objectives of the legal action initiated in that jurisdiction is to upset that transaction, thereby the natural forum for the disposal

of the issue as to the validity of the dilution in the overall value of the shareholding is naturally in India. Mecon, in a written

submission put before the court, expresses the matter in this way:

It is further submitted ... that as the Indian proceedings concern the validity of the transaction in accordance with Indian

law, the determination of the validity of the transaction clearly has a bearing on the reliefs and the subject matter of the

Irish proceedings. Hypothetically, if the plaintiff in the Indian proceedings was successful and the court ordered the

transaction to be set aside, it is arguable that the act alleged to constitute part of the conspiracy in the Irish

proceedings and, so act alleged to involve Mecon, would then arguably have been unravelled. However, this cannot be

determined at the current time and therefore it is submitted that the order to leave the set-aside or the Irish proceedings

against Mecon be stayed until the validity of the transaction under the applicable law is determined by the Indian courts.

It is submitted that where the risk of conflicting orders arises, the relative breath or narrowness of the respective sets of

proceedings is not relevant. It is further submitted that case law addressing the risk of conflicting orders does not

concern itself with the scope of the proceedings where the risk of conflict may be demonstrated. In the alternative, it is

admitted that even if the courts do not consider the scope of proceedings is having a bearing on the risk of conflict, such

in issue is not determinants of or to be accorded greater weight on the issue of the risk itself.

It is certainly the case that there is an overlap between the reliefs sought in the proceedings in India and the reliefs which are sought

before the High Court in Ireland. This is a discretionary factor to be taken into account in balancing the interests of justice. What it is

claimed on behalf of the plaintiffs is that proof is available of a calculated and coordinated conspiracy. In that regard the assertion is

that Mecon is a vehicle for channelling the interests of the Quinn family through the International Property Group, and down in the

corporate structures to Mack Soft, to the ultimate benefit of bypassing court orders and contractual pledges. In the proceedings in

India, the plaintiffs seek to set aside the transfer of shares in Mack Soft to Mecon and the prevention thereby of third party rights in

favour of that company, which is further alleged to be controlled by the Quinn family. Injunctive relief in India is, within that context,

a reasonable response where it is demonstrated that some proof is available that actions on the dilution of shareholdings and any

further dilutions of shareholding would upset the appropriate balance. It is not, as yet, completely clear as to the interest of the

Quinns in Mecon and nor is it at all clear that there is no such interest or no prospective interest or plan to gain an interest. As

against that, before the transaction in question involving Mack Soft and Mecon, Quinn family interests in the valuable real estate in

question was demonstrated. Thus far in India, only one interim injunctive order was sought and ordered against Mecon; this order

arrests the shareholding of Mecon in another company and it was the subject of the share transfer.

The conspiracy, if it exists, was formed in Ireland in respect of Mack Soft and the result was the sale of valuable shares to Mecon.

The conspiracy, if it can be proven, is of a pattern of control and direction from Ireland in furtherance of individuals in Ireland and

their corporate vehicles. The conspiracy, as it is alleged, is an attack on orders of the High Court of Ireland. To further the conspiracy

posited, breaches are claimed of share pledges as security for loans made in Ireland. All of this is a matter of control. None of what is

claimed could happen without direction and planning. That is what the case is about and Ireland is clearly the place where the

witnesses are and the ultimate benefit of what are said to be unlawful actions by the Quinn family defendants will materialise and

where the ultimate detriment of men or corporations of substance transmogrifying into men or corporations of straw will be felt as a

detriment for the plaintiffs.

Relative stage of the proceedings

The proceedings before the High Court in Ireland, having crystallised in a statement of claim in July, 2012 are being closely case

managed by Kelly J. with a view to an early and focused hearing. That management is characterised by the availability of the court

for any relevant motions and by a swift turnaround in any necessary rulings. During the course of this motion, I intimated that I was

not persuaded by allegations of delay that have been mutually made by each side against the other. It is not impressive, however,

that there was a considerable delay by Mecon in putting in an appearance to the proceedings in India. I would assume that the High

Court in India is available to dispose of the proceedings in a reasonably timely fashion. Whereas affidavit evidence by Mecon claims

that the proceedings will be defended vigorously, and that precisely is how the matter is put, experience demonstrates that the

plaintiffs common to these proceedings and proceedings in India have, in contrast, moved swiftly to obtain limited injunctive relief.

What happened in India was supplemental to the orders already granted in Ireland forbidding the Quinn defendants from acting to

make themselves judgment proof. There is no demonstration, on the other hand, that Mecon is determined to bring the Indian High

Court proceedings on to trial in order to vindicate what it claims to be the legitimate nature of the share transactions. If the parties

are not determined to bring a case to trial, courts, whether in India or in Ireland, are unlikely to spur them forward until those

proceedings reach an inactive case list.

In contrast, the plaintiffs in these proceedings have demonstrated a determination to bring their case before the court in order to

recover assets and damages. It may further be stated that, on the part of the defendants, all of their actions before the High Court

of Ireland have been to attempt to vindicate their reputation and their property rights through proof of the legitimacy of relevant

transactions and a clear explanation of such transactions as are impugned. This healthy attitude by all of the litigants in Ireland is in

contrast to the inaction in India by Mecon which is in no sense reflective of the efficiency of the courts of that jurisdiction but,

rather, the relative approach of the parties as between two different jurisdictions.

Brussels I Regulation

The object of the Brussels I Regulation is classically set out in the judgment of the Court of Justice in Gubisch Maschinenfabrik K.G. v.

Palumbo (Case 144/86) [1987] E.C.R. I-04861 at paragraph 8, addressing the Convention which was its origin:

According to its preamble, which incorporates in part the terms of Article 220, the Convention seeks in particular to

facilitate the recognition and enforcement of judgments of courts or tribunals and to strengthen in the Community the

legal protection of persons therein established. Article 21, together with Article 22 on related actions, is contained in

Section 8 of Title II of the Convention; that section is intended, in the interests of the proper administration of justice

within the Community, to prevent parallel proceedings before the courts of different Contracting States and to avoid

conflicts between decisions which might result therefrom. Those rules are therefore designed to preclude, in so far as is

possible and from the outset, the possibility of a situation arising such as that referred to in Article 27 (3), that is to say

the non-recognition of a judgment on account of its irreconcilability with a judgment given in a dispute between the same

parties in the State in which recognition is sought.

Article 2(1) provides the general rule that, in principle and subject to the regulations, domicile shall dictate jurisdiction:

Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of

that Member State.

Domicile is defined in regulation 11 of Regulation European Communities (Civil and Commercial Judgment) Regulations 2002 (S.I. No. 52

of 2002) in this way:

(a) an individual is domiciled in the State or another state (not being a member state) only if he or she is ordinarily

resident in the State or that other state,

(b) an individual is domiciled in a place in the State only if he or she is domiciled in the State and is ordinarily resident or

carries on any profession, business or occupation in that place, and

(c) a trust is domiciled in the State only if the law of the State is the system of law with which the trust has its closest

and most real connection.

Mecon is not domiciled in Ireland but, as has already been stated, is a company incorporated in, and having its registered office in,

the United Arab Emirates. I am therefore puzzled at what is said to be the relevance of the Brussels I Regulation. Article 6(1) of the

Brussels I Regulation provides that a person domiciled in a Member State may also be sued:

…where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the

claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable

judgements resulting from separate proceedings.

This Regulation, however, is almost all about intra European Union litigation. In Owusu v. Jackson Case (Case 281/02) [2005] E.C.R. I-

3855 the Court of Justice held that litigation in England about an accident while a man was on holiday in Jamaica, having rented a

holiday cottage there from a person domiciled in England, with several Jamaican defendants must be heard in England. The Brussels I

Regulation, the Court held, had set aside any local rules, such as that of appropriate forum in this jurisdiction and in England and

Wales, through requiring a uniform interpretation through the European Union. Once one of the parties was in England, in this case

only the man who rented the cottage in Jamaica, England was the appropriate forum; even though the case might most conveniently

be tried for the majority of the parties in Jamaica. Jurisdiction was definitively assumed in England under the Brussels I Regulation

through service on a defendant in England. In Abama v. Gama Construction Limited and Another [2011] IEHC 308, Dunne J. was

constrained to apply that principle to a dispute initiated in Ireland where the centre of what the case was about was claimed to be in

Turkey.

The reasoning of the European Court of Justice in Owusu was set out at paragraphs 39-43 as follows:

39. According to its preamble, the Brussels Convention is intended to strengthen in the Community the legal protection of

persons established therein, by laying down common rules on jurisdiction to guarantee certainty as to the allocation of

jurisdiction among the various national courts before which proceedings in a particular case may be brought (Besix,

paragraph 25).

40. The Court has thus held that the principle of legal certainty requires, in particular, that the jurisdictional rules which

derogate from the general rule laid down in Article 2 of the Brussels Convention should be interpreted in such a way as to

enable a normally well-informed defendant reasonably to foresee before which courts, other than those of the State in

which he is domiciled, he may be sued (GIE Groupe Concorde and Others, paragraph 24, and Besix, paragraph 26).

41. Application of the forum non conveniens doctrine, which allows the court seised a wide discretion as regards the

question whether a foreign court would be a more appropriate forum for the trial of an action, is liable to undermine the

predictability of the rules of jurisdiction laid down by the Brussels Convention, in particular that of Article 2, and

consequently to undermine the principle of legal certainty, which is the basis of the Convention.

42. The legal protection of persons established in the Community would also be undermined. First, a defendant, who is

generally better placed to conduct his defence before the courts of his domicile, would not be able, in circumstances such

as those of the main proceedings, reasonably to foresee before which other court he may be sued. Second, where a plea

is raised on the basis that a foreign court is a more appropriate forum to try the action, it is for the claimant to establish

that he will not be able to obtain justice before that foreign court or, if the court seised decides to allow the plea, that

the foreign court has in fact no jurisdiction to try the action or that the claimant does not, in practice, have access to

effective justice before that court, irrespective of the cost entailed by the bringing of a fresh action before a court of

another State and the prolongation of the procedural time-limits.

43. Moreover, allowing forum non conveniens in the context of the Brussels Convention would be likely to affect the

uniform application of the rules of jurisdiction contained therein in so far as that doctrine is recognised only in a limited

number of Contracting States, whereas the objective of the Brussels Convention is precisely to lay down common rules to

the exclusion of derogating national rules.

This ruling may not be the entire answer to this issue. It is hard to see as always fair or logical that through the Brussels I Regulation,

a court in a Member State is precluded from exercising any discretionary jurisdiction as to a cynical exercise in forum shopping, or as

to other abuses of procedure. However, was such an exception to be allowed, would the exception open up a wider discretion, a

disregard of the Brussels I Regulation, of a discretion to decline jurisdiction in respect of, for instance, any litigant sued outside the

European Union and then sued within it together with a person or entity domiciled in the European Union? Perhaps not. The rule that

once jurisdiction is established under the Brussels I Regulation, a foreign defendant may not challenge the choice of forum on a

discretionary basis is the foundation of the decision of Clarke J. in Goshawk Dedicated Ltd v. Life Receivables Ireland Ltd [2008] IEHC

90. This decision has been followed in the England and Wales Court of Appeal in Catalyst Investment Group Ltd v. Lewinsohn and

others [2010] 2 W.L.R. 839. While a reference was made by the Supreme Court of the High Court decision in the Goshawk case in

Goshawk Dedicated Ltd v. Life Receivables Ireland Ltd [2009] IESC 7, the case was settled before the Court of Justice could

pronounce on it.

Clearly, there is a need for a set of laws in the European Union which takes into account the needs of foreign litigants and which

makes forum shopping less convenient than the choice of appropriate jurisdiction. That process is underway, I am told. It is pointless

for me to attempt any reanalysis. Even were I to do so, my decision is that the joinder of Mecon to these proceedings would be

correct on discretionary grounds were this Court allowed any discretion.

Result

I therefore refuse the motion to stay these proceedings against Mecon. The joinder of that defendant in these proceedings is sensible

and just in the context of the nature of the case. Further, that is the appropriate order under the Brussels I Regulation.