Since January 2004 the ability to resolve commercial disputes in Ireland has moved forward to a status that has made it the envy of most common law jurisdictions.
This has been achieved by High Court judge Mr Justice Peter Kelly developing and enforcing rigid case management rules that require the parties to plead very tightly and to meet very strict time deadlines. There is no room for the old ‘kitchen sink’ style of litigating in the Irish commercial list, and unless parties have substantive issues that require resolution, the effect of the rules is that the disputes are settled or withdrawn extremely quickly.
The Irish court boasts very impressive statistics, which include an average period of 21 weeks for cases to reach conclusion. There are, of course, cases that stray well outside these average statistics, such as the Cunningham case against First Active, which is currently at hearing in Dundalk and which is scheduled to run for 100 days. But this only makes the statistics on an average basis even more impressive.
An example of this was evident in the resolution of a dispute between AIB and Danish Re. Following the settlement of the derivative action in the US, arising from the John Rusnak fraud scandal, Danish Re failed to pay its portion of the settlement. There were respectable arguments for grounding the jurisdiction in either Ireland or England. On careful examination of the two court systems, it was the unanimous view of the lawyers that the efficiency of the Irish Commercial Court would bring the matter to a speedier resolution and, true to form, the matter was resolved as soon as the proceedings were issued in Ireland.
Another example has recently come before the Irish Commercial Court. Proceedings were commenced in Atlanta, Georgia, by an Irish investment company called Life Receivables Ireland (LRI) against a number of defendants including two UK parties – a Lloyd’s of London syndicate in run-off called Goshawk, and the managing agent, Cavell. Those proceedings allege fraud and are listed in the Federal Court.
Goshawk and Cavell have challenged the jurisdiction of LRI to bring the proceedings in the US and believe the issues should be determined in the EU. As LRI is an Ireland-domiciled company, Goshawk and Cavell brought negative declaration proceedings in Ireland, which are mirror image of the US proceedings. They have jurisdiction to bring the proceedings under Article 2 of the Brussels Regulations. LRI brought an application to stay these proceedings on the grounds that the court retained discretion to stay the proceedings, pursuant to the common law doctrine of forum non conveniens and, in particular, the doctrine of lis pendensThe issue of the discretion of an EU court to stay proceedings was considered by the European Court of Justice in the case of Owusu v Jackson (2005). However, in Owusu, no proceedings had been commenced in a third-party country and therefore it was purely looking at the issues on the basis that another state was a more convenient forum in which to conduct the litigation.
The principal legal argument put forward by LRI centred around the fact that the Brussels Regulations expressly recognise the principles of the doctrine of lis pendens in Articles 27 and 28, and thus the provisions should be applied reflexively to non-member states. However, Mr Justice Clarke had difficulty in accepting the submissions made by LRI, as he stated that to do so would be to contradict the mandatory language of Article 2 of the Brussels Regulations. Further, Clarke J recognised that the Brussels Regulation set down the procedure and the principles by which competing member state jurisdictions determine where the dispute is to be litigated. This would not apply to a dispute involving a non-member state, which would determine jurisdiction in accordance with the principles of private international law in force in that jurisdiction. Clarke J therefore found that he could not apply the doctrine of lis pendens as provided for in Articles 27 and 28 reflexively to non-member states. From a practical perspective, however, the decision that reinforces the Owusu decision means that, irrespective of any proceedings issued in non-member states, a European court will hear proceedings provided it has jurisdiction under the Brussels Regulations to do so. This means that the dispute will be determined by the court that issues its decision first, rather then the court first seised of it. This decision is under appeal.
Additional factors making Ireland a venue of choice include the fact that the court will adjudicate on public law issues as long as they affect commercial parties, and IP rights can be protected quickly and effectively. Ireland is now considered a leader in the field of commercial dispute resolution.
Sharon Daly is a partner in the commercial litigation and dispute resolution department and head of contentious insurance law at Matheson Ormsby Prentice