The High Court granted an interlocutory injunction restraining Skellig Fish Limited from alienating fishing capacity covered by a disputed sale agreement, pending trial of the plaintiff’s claim for specific performance.
In an ex tempore judgment delivered on 27 February 2017, Mr Justice Twomey found that the plaintiff had at least an arguable case that the company was legally bound to sell him capacity of 324 gross tonnes and 709 kilowatts under an agreement dated 4 March 2016. The court’s decision was an interim measure to preserve the position before trial; it did not determine whether the agreement is binding or whether specific performance should ultimately be ordered.
The agreement set a price of €900,000 and a deposit of €90,000. The original document, produced to the court, appeared to bear the plaintiff’s signature, signatures on behalf of the company and the company seal. Evidence was given that the deposit had been paid to the company’s former solicitors. A clause in the agreement provided for the buyer to seek specific performance if the seller failed to perform.
The plaintiff told the court he had arranged construction of a fishing vessel, the Allanah Riley, for €6 million in reliance on the agreement. He said €4.925 million in bank funding had been drawn down and that the vessel was due for completion at the end of April 2017. He said the bank required the agreement and fishing capacity as security. The court concluded that damages would not be an adequate remedy if the capacity were sold before trial, given its scarcity and the potential consequences for the vessel project and the plaintiff’s financial obligations.
The company argued that the agreement’s lack of a closing date raised questions about enforceability. Its solicitor said he had been instructed that the company had no intention of selling or otherwise disposing of the capacity. But he had not been able to give the undertaking sought by the plaintiff that the capacity would not be alienated pending trial. The court also considered correspondence about a possible internal transfer between company vessels. It treated the plaintiff’s concern that such a transfer could contaminate the capacity with caution, as no evidence explained how that would happen.
Balancing the risks, the judge said a delay of a few months was unlikely to prevent the company selling the capacity if it ultimately succeeded at trial, while the plaintiff might struggle to replace it if it were sold. The injunction keeps the status quo until the trial, which the plaintiff had sought within two months of the hearing. The court also considered that the plaintiff’s undertaking as to damages would adequately compensate the company if it later succeeded.