The Supreme Court dismissed Mecon FZE’s appeal against an order allowing proceedings to be served on it outside Ireland and refusing to stay the Irish claims in favour of proceedings in India. The Court said Mecon could return to the High Court for a stay if the plaintiffs failed to take reasonable steps to limit the risk of it having to meet substantially similar claims in both countries.
The judgment, delivered by Clarke J on 28 July 2016, concerns claims brought by Irish Bank Resolution Corporation Limited (in special liquidation), Quinn Investments Sweden AB and Leif Baecklund. The plaintiffs allege that members of the Quinn family and associated companies and individuals acted together to put assets beyond IBRC’s reach. They allege that Mecon’s role involved a share transfer in Mack Soft, a company said to own valuable property in Hyderabad. Those allegations were not determined at this appeal.
Mecon challenged the High Court’s 2012 permission to serve it outside Ireland and sought a stay, arguing that India was the more appropriate forum because related proceedings had begun there first. The Indian proceedings focus on a share transaction alleged to have been made at a significant undervalue and seek, among other relief, to reverse it. An interim injunction had restrained dealings in Mack Soft shares and related assets; the Supreme Court noted that it appeared to remain in place.
On service, the Supreme Court held that the evidence before the High Court met the low threshold of showing that the claim against Mecon was reasonably capable of proof. It found that Mecon was a proper party to the broader Irish proceedings, which had been brought against other defendants within the jurisdiction. The Court did not decide whether the other legal grounds for service outside Ireland were also met.
On the stay application, the Court considered the risk that separating the claims would fragment a broader case alleging concerted action across jurisdictions, with a risk of duplicated evidence and inconsistent decisions. It was not satisfied that India was clearly or distinctly the more appropriate forum for the Irish claims against Mecon as part of that wider case.
However, the Court also said the plaintiffs should take all reasonable steps within their power to avoid exposing Mecon to a full trial of substantially overlapping issues in both jurisdictions, while protecting the security obtained through the Indian interim injunction. The judgment said the Court lacked information about Indian procedural law and what steps could be taken without jeopardising that protection. If Mecon can show in the High Court that the plaintiffs did not take the required steps, it may renew its stay application; the judgment said such a renewed application would be expected to succeed.
The Court did not decide whether the Brussels Regulation displaced the common-law power to stay proceedings, because that issue was unnecessary to resolve the appeal at this stage.