The High Court found that Verizon (Ireland) Ltd and Verizon (UK) Ltd breached their contracts with ESL Consulting Services Ltd, which traded as VoIP Ireland, by suspending co-location access and internet services in November 2006. It awarded the company €25,000 in damages. The court found no breach in a separate internet suspension in January 2007.
The judgment, delivered by Ms Justice Finlay Geoghegan on 27 November 2008, concerned agreements for wholesale telecommunications and co-location services. VoIP Ireland claimed more than €4 million in damages. The defendants counterclaimed for unpaid service charges.
The November suspensions were based on two invoices, for €32,396.77 and €26,638.58. The court found both amounts remained in dispute under the agreements when services were suspended. The first related to co-location and office rental charges that VoIP Ireland understood to be free; the parties had discussed a proposed 50 per cent settlement. The second was also recorded as disputed in a payment plan signed for the defendants shortly before the suspensions. Rejection of the proposed settlements did not end either dispute, the judge found. The defendants therefore had no contractual basis to suspend services on 17 and 20 November.
The court heard that the November lockout briefly prevented employees from entering the Clonshaugh premises. The internet disconnection the following Monday left VoIP Ireland unable to provide its VoIP and wireless broadband services for a full business day. The judge found that these events caused employee upset and some damage to customer confidence and reputation. She did not find that the breaches caused either of two valuable employees to leave, though she found they probably prompted one employee to leave earlier than he otherwise would have.
The judge rejected the claim that the November breaches caused losses exceeding €4 million. VoIP Ireland had not established that the alleged loss on selling business assets was a direct loss under the agreements. It also had not quantified most claimed revenue losses. The court awarded €15,000 for employee disruption and the earlier departure, and €10,000 for other direct damage and loss, including limited customer and revenue effects.
The January suspension was different. The court found that the invoices issued after November, totalling €186,489.38, were not disputed under the contract’s invoice-dispute procedure. VoIP Ireland was asserting a right to set those amounts off against damages it claimed from the defendants. As the court treated the invoice amounts as due and VoIP Ireland had indicated it would not pay them, the defendants were entitled to suspend service on 9 January 2007. Services were restored later that day after VoIP Ireland obtained an interim injunction.
The parties had agreed that €252,000 was due to the defendants on their counterclaim. After deducting the damages award, the court set the balance at €227,000 and awarded interest from 10 January 2007. The judgment did not identify which defendant was entitled to judgment; the judge said she would hear counsel on that question.