The High Court has ordered Protégé International Group (Cyprus) Limited and Avalon International Management Incorporated to provide €1 million in security for costs in their competition-law proceedings against Irish Distillers Limited.
Mr Justice Max Barrett delivered the judgment on 17 May 2019. Irish Distillers applied under Order 29, rule 1 of the Rules of the Superior Courts. The court said the relevant test was similar, though not identical, to the test under section 52 of the Companies Act 2014.
At the hearing, the plaintiffs conceded that Irish Distillers had a prima facie defence. The judge said the evidence would have supported that conclusion in any event. He also accepted that the plaintiffs had a prima facie case.
The court found that Protégé’s accounts and the evidence generally showed it lacked the assets or funding to meet the likely costs in full if the defence succeeded. Avalon was established outside the European Union, and the court said that, alongside Irish Distillers’ prima facie defence, this gave rise to a presumption in favour of the requested order. The burden then shifted to the plaintiffs to show why security should not be ordered.
The plaintiffs argued that their inability to provide security was attributable to Irish Distillers, that the case raised issues of exceptional public importance, and that its European context meant an order could deny them effective redress. The judge found they had not produced evidence meeting the legal test for linking Irish Distillers’ conduct to their financial position. He also treated the proceedings as a private competition dispute between parties in the whiskey and spirits sector; the importance of the industry and competition law did not, by themselves, make the case one of exceptional public importance.
The judge said the European-law context was relevant but not decisive without additional special circumstances, which he found absent. He noted the complexity of the proceedings, divergent cost estimates, Protégé’s financial records, and the absence of financial records for Avalon. He also found little assistance in the plaintiffs’ separate funding of trademark litigation concerning Irish Distillers.
In setting the amount, the court considered that full security based on Irish Distillers’ figures could overcompensate it or obstruct a fair determination of the dispute. Taking account of Protégé’s weak financial position and the unknown position of Avalon, the court ordered discounted security of €1 million. The judgment does not state a deadline or other terms for providing it.