The High Court has set aside service of proceedings in Ireland in a $20 million guarantee dispute, ruling that the plaintiff had not established that litigating in England would cause “manifest injustice.” The court did not decide whether the guarantee is payable or whether funds can be released from the defendant’s frozen assets.
Compagnie de Bauxite et d’Alumine de Dian-Dian S.A., a Guinea-based company, sued GTLK Europe DAC in Ireland. It claims it can enforce a $20 million guarantee issued by GTLK in connection with bauxite shipments from Guinea to Aughinish Alumina in Limerick. GTLK disputes its obligations under the guarantee and said sanctions prevent it from making payments.
The guarantee gives the English courts exclusive jurisdiction over disputes. Compagnie nevertheless brought the Irish proceedings, seeking payment and an order requiring GTLK to apply to the Central Bank of Ireland for permission to release funds frozen under EU sanctions. It argued that having to seek an English injunction and then enforce it in Ireland would create manifest injustice.
Justice Twomey held that the Hague Convention required the Irish court to suspend or dismiss the proceedings unless an exception applied. Compagnie, as the party asking the court to disregard the jurisdiction clause, had to establish manifest injustice—a high threshold. The judge found no evidence that Compagnie could not get a fair trial or bring its claim in England. Nor was there expert evidence that an English court could not grant the proposed injunction or that an Irish court would refuse to enforce it. The added steps, expense and delay were inconvenient, but did not meet the test.
The judge also rejected the argument that GTLK’s delay in challenging jurisdiction created manifest injustice. Compagnie knew within weeks that GTLK intended to contest jurisdiction and had said frozen funds were making it difficult to obtain legal representation. The court considered the delay relatively short and noted that Compagnie had also sought adjournments.
The court ordered service of the proceedings on GTLK set aside. It directed the parties to try to agree outstanding matters, including final orders and costs. It made no final costs decision. The judge invited submissions on whether GTLK should receive all its legal costs, despite winning the jurisdiction application, because an undertaking to seek a sanctions derogation if Compagnie obtained an English judgment might have avoided the hearing without prejudicing GTLK. The court said it had not decided that costs question.