The High Court has lifted a stay on enforcement of a US$829,720.64 judgment in favour of Microsoft Ireland Operations Ltd against Moneer Omar Thabit Trading Est, after finding that delays in advancing the defendant’s counterclaim made it unjust to keep the stay in place.
Mr Justice Noonan made the order on 30 January 2019, with immediate effect. The counterclaim itself was not decided. The court’s ruling concerned whether enforcement of the earlier judgment should remain stayed while that claim proceeded.
The parties’ 2010 Retail Distribution Agreement made the defendant a distributor of Microsoft products. The plaintiff supplied products in 2012 and issued invoices worth US$829,720.64. The defendant admitted the plaintiff’s claim but pleaded an equitable setoff based on its counterclaim.
The defendant alleges that, before the agreement, Microsoft made representations that it would become the sole distributor of certain products in Saudi Arabia and that a temporary distributorship would protect market share while it established itself. It says it relied on those representations and suffered losses of about US$6 million. Those allegations were not findings in this ruling.
In July 2015, Mr Justice Haughton gave judgment for the plaintiff for the amount claimed, but stayed it pending determination of the setoff and counterclaim. The defendant was ordered to make discovery in December 2016, but did not do so by the February 2017 deadline. It eventually provided an affidavit of discovery in July 2018, shortly before a hearing on the plaintiff’s application to strike out the defence and counterclaim or lift the stay.
In July 2018, Mr Justice Noonan left the stay in place for the time being, while directing that the counterclaim be progressed urgently. The parties later agreed to extend the deadline for exchanging expert reports to 28 November 2018. The defendant missed that deadline, did not bring a directed discovery motion by the next case conference, and provided its accountancy report on 17 January 2019. The report was dated 11 January.
The defendant’s solicitor attributed delay in exchanging reports partly to the defendant’s location in Saudi Arabia and the departure from practice of senior counsel. The judge considered the location explanation unpersuasive given the report came from a Dublin-based firm and electronic communications. He also noted that the plaintiff had consented to proposed amendments to the defence and counterclaim without abandoning its application to lift the stay.
The judge found the counterclaim had made little progress since July 2018 and that the plaintiff was not responsible for the delays. He also considered the plaintiff’s inability to recover interest on the judgment under Saudi law. The defendant had not suggested it would be unable to recover if it ultimately succeeded on its counterclaim. The court therefore lifted the stay immediately; it did not rule on the counterclaim’s merits.