Judgment: 2012-11-14 · Court archive

Supreme Court dismisses appeal over Saudi Arabia computer licence dispute

The court upheld the finding that the licence agreement had not been validly terminated and that the Foundation could not rely on its contractual cap on liability.

Supreme Court of Ireland ·

Who, what, where, when and why

Who
  • ICDL, GCC Foundation, FZ-LLC
  • The European Computer Driving Licence Foundation Limited (Defendant)
  • Technical and Vocational Training Corporation
What

The court upheld the finding that the licence agreement had not been validly terminated and that the Foundation could not rely on its contractual cap on liability.

Where

Places mentioned in the report

  • Dubai
When

Judgment:

Other dates in the report
  • 25 April 2006

    In a judgment delivered on 14 November 2012, Mr Justice Fennelly said the Foundation had not validly terminated the agreement. The agreement, dated 25 April 2006, covered seven Gulf Co-operation Council countries, including Saudi Arabia. The Dubai company had separately sublicensed the programme in Saudi Arabia to its co-plaintiff, Sh arikat Takniayat Almaarefa Lil Taalim, Al Mutatwer, Al Mohadoda, trading as ICDL Saudi Arabia (TAM).

Why

Reasons reported in the judgment

The High Court had found that the agreement required licences and consents necessary to make the business lawful, rather than permissions needed for commercial success. It accepted that TAM did not itself provide training and found that operating the programme without TVTC’s consent was not unlawful. The Supreme Court upheld that conclusion, finding the Dubai company was not in breach of the agreement’s licensing clause.

The Supreme Court has dismissed an appeal by the European Computer Driving Licence Foundation Limited in a dispute over its Gulf region licence agreement with ICDL, GCC Foundation, FZ-LLC, a Dubai-based company.

In a judgment delivered on 14 November 2012, Mr Justice Fennelly said the Foundation had not validly terminated the agreement. The agreement, dated 25 April 2006, covered seven Gulf Co-operation Council countries, including Saudi Arabia. The Dubai company had separately sublicensed the programme in Saudi Arabia to its co-plaintiff, Sh arikat Takniayat Almaarefa Lil Taalim, Al Mutatwer, Al Mohadoda, trading as ICDL Saudi Arabia (TAM).

The dispute followed a breakdown in relations between TAM and Saudi Arabia’s Technical and Vocational Training Corporation (TVTC), which was not a party to the Irish proceedings. TVTC alleged that TAM lacked required permission to operate and asserted authority over training and certification. TAM disputed that position. The Foundation relied on TVTC’s assertions when it issued a February 2010 notice alleging breach of the licence terms and requiring the alleged breach to be remedied within 60 days.

The High Court had found that the agreement required licences and consents necessary to make the business lawful, rather than permissions needed for commercial success. It accepted that TAM did not itself provide training and found that operating the programme without TVTC’s consent was not unlawful. The Supreme Court upheld that conclusion, finding the Dubai company was not in breach of the agreement’s licensing clause.

The Supreme Court also upheld the High Court’s finding that the agreement did not allow termination for Saudi Arabia alone. The clause gave the Foundation a right to terminate “this Contract”; it did not provide for partial termination. The separate question of whether a second notice was required was not properly before the Supreme Court as a distinct appeal ground, and the court did not decide it.

The High Court had found the Foundation grossly negligent in its conduct around the attempted termination. The Supreme Court upheld that finding, citing the Foundation’s direct dealings with TVTC while the agreement remained in force and its reliance on TVTC’s view of its powers despite receiving notice that Saudi legal advice disputed it. It also held that the intentional notice, which breached the contract, amounted to a “wilful act” under the agreement.

The Foundation therefore could not rely on the contract’s liability cap. The Supreme Court dismissed the appeal on all grounds. The judgment addressed liability; questions quantifying damages had been left for a later decision.

Read the original court judgment

Something looks wrong?

Highlight the relevant passage or flag this article for review. Review requests do not immediately change the report.

Email a correction request

Request a review