The High Court has dismissed an application by two Israeli companies to set aside service of proceedings brought by Microsoft Ireland Operations Limited or to have the case heard in Israel.
Mr Justice de Valera ruled on 9 June 2010 that the defendants had not shown a sufficient reason to avoid the jurisdiction clauses in their agreements with Microsoft Ireland. The application sought to discharge an earlier order allowing service of the plenary summons outside Ireland, or alternatively to stay the proceedings on forum non conveniens grounds. The court refused the requested relief; it did not decide the underlying contract claim.
The dispute arises from distribution agreements covering periods from April 2003 to June 2005. The defendants, EIM International Electronics Limited and EIM Computerised Technologies Limited, argued that the order allowing service abroad was defective because it referred to “Order 11 Rule B” rather than the provision cited in Microsoft’s application. They also complained that the statement of claim had been served late and included a negligence or breach of duty claim not disclosed in the application for leave to serve abroad.
The judge accepted Microsoft’s explanation that the reference to “Order 11 Rule B” was an administrative error. He found the application had been made, and the order granted, under Order 11, rule 1(e)(iii). The judgment records the defendants’ complaints about late service and the added claim, but does not separately resolve those points in its concluding reasons.
The companies said Israel was the more suitable forum because the defendants’ business, most witnesses and many documents were there, and related litigation was already under way in Israel. Microsoft relied on written contractual terms providing for Irish law and Irish court jurisdiction. The judge concluded that Article 23 of Council Regulation 44/2001 applied to the agreements and that, under that provision, the jurisdiction choice was exclusive unless the parties agreed otherwise. He also said that, even if Microsoft could not rely on Article 23 at this stage, common law principles supported holding the parties to their jurisdiction clauses.
The judge considered the travel and expense of witnesses insufficiently grave to justify departing from the agreements. He also noted that the Israeli proceedings concerned a different, tort-based cause of action and were unlikely to be consolidated with the contract claim. He said Ireland was the appropriate forum, citing the jurisdiction clause, Irish law governing the dispute, Microsoft’s Irish domicile and available measures to secure witness evidence.
The defendants’ application was dismissed. The judgment makes no ruling on the merits of the underlying contract dispute.