The High Court has refused to stay Irish proceedings brought by Goshawk Dedicated Limited, Kite Dedicated Limited and two Cavell companies against Life Receivables Ireland Limited, despite an earlier case involving the same dispute in Georgia, United States.
Mr Justice Clarke ruled on 27 February 2008 that the Irish proceedings must continue in the ordinary way. He held that the Brussels Regulation required the Irish courts to exercise jurisdiction over Life Receivables, which is incorporated and has its principal place of business in Ireland. He concluded that he had no jurisdiction to stay the case pending either the Georgia proceedings or a decision by the US courts on their own jurisdiction.
Life Receivables alleged that it had been induced by misrepresentation to buy an interest in a Delaware partnership. The partnership was a beneficiary of a trust whose commercial value derived from life insurance policies and contingent cost insurance issued by Goshawk. Life Receivables had sued Goshawk, Cavell and other parties in the US District Court for the Northern District of Georgia. Those proceedings began first.
Goshawk and Cavell later brought mirror-image proceedings in Ireland, seeking declarations that they had not made misrepresentations and other related relief. The Irish case did not include the additional defendants named in Georgia.
Life Receivables argued that the Irish court could stay the case under the common law doctrine of lis alibi pendens, which can allow proceedings to be paused where a dispute is already before a foreign court. It also argued that the Irish claim for a negative declaration was an abuse of process. Goshawk and Cavell submitted that the Brussels rules required the dispute to be heard in Ireland.
The judge considered the European Court of Justice’s ruling in Owusu v Jackson, which held that a court exercising jurisdiction under Article 2 could not decline it because a non-member state was a more appropriate forum. He found that a discretionary stay under the common law was inconsistent with the Regulation. He also rejected Life Receivables’ proposed extension, by analogy, of the Regulation’s rules for parallel cases between member states to proceedings in a non-member state.
On abuse of process, the judge left open whether seeking a negative declaration could be abusive in other circumstances. He found nothing inherently wrong with the form of declaration sought here and said that the doctrine could not be used to defeat the jurisdiction required by the Regulation.
The ruling addressed whether the Irish case should be stayed; it did not decide the underlying allegations of misrepresentation. The court declined to stay the proceedings, which are to continue in the ordinary way.