The Supreme Court granted Meridian Communications a two-week injunction preventing Eircell from terminating mobile services to its customers while Meridian sought to sell a subscriber base of about 20,000 users.
The court also temporarily restrained Eircell from presenting a petition to wind up Meridian. Both protections were ordered on April 27, 2001 and were due to expire at 4pm on May 11. Mrs Justice McGuinness delivered the court’s reasons on May 10.
The dispute followed lengthy litigation over a volume discount agreement under which Meridian rented mobile lines in bulk from Eircell and supplied them to its own customers. After a 95-day High Court hearing, O’Higgins J. ruled in April 2001 on contractual and competition-law issues. Meridian intended to appeal aspects of that judgment.
Meanwhile, relations between the companies deteriorated. Eircell restricted international and premium-rate calls, began disconnecting some numbers and prepared a winding-up petition. Eircell said Meridian had cancelled direct debit payments and owed substantial sums. Meridian disputed the level of its indebtedness and alleged billing errors.
By the Supreme Court hearing, Meridian accepted that its existing business model could not continue. It said its remaining major asset was its subscriber base, which it valued at up to £10 million, and that negotiations for a sale to one of Eircell’s competitors were advanced.
The court found there were serious issues connected with Meridian’s proposed appeal. It also considered that damages would generally be an adequate long-term remedy and said there could be no continuing injunction forcing the companies to trade together.
However, the balance of convenience justified a brief injunction to allow an orderly sale and potential payment of creditors, particularly Eircell. The winding-up restraint was similarly limited to two weeks. The wider contractual, competition and debt disputes remained unresolved.