Ireland: High Court Upholds Jurisdictional Challenge To Enforcement Of Foreign Judgment In Ireland

High Court upholds jurisdictional challenge to enforcement of foreign judgment in Ireland where no 'solid practical benefit' accrues to the plaintiff

Matheson acted as Irish legal counsel to Enel SpA and Enelpower SpA.

The Irish High Court in the case of Albaniabeg Ambient Shpk v Enel SpA and Enelpower SpA confirms that, as a matter of Irish law, for the court to assume jurisdiction to enforce a foreign (non-EU) judgment in Ireland a "solid practical benefit" must accrue to the applicant in pursuing the proceedings in Ireland, and that several debt securities listed by the first named defendant on the Irish Stock Exchange were not sufficient for the court to assume jurisdiction.

In summary

In Albaniabeg Ambient Shpk v Enel SpA and Enelpower SpA (High Court, 8 March 2016, McDermott J), the Defendants successfully resisted an application to enforce a foreign judgment in Ireland on jurisdictional grounds. The decision confirms that, as a matter of Irish law, for the court to assume jurisdiction:

(a) the plaintiff must be able to demonstrate that a "solid practical benefit" will or is likely to accrue to the plaintiff in the event that the judgment is recognised and enforced in Ireland; and

(b) the question of whether there are, or are likely to be, assets within the jurisdiction against which to levy enforcement is critical to the question of whether any "solid practical benefit" will or is likely to accrue.

To resist enforcement on substantive grounds would involve significant time, costs and court resources. The court held that Ireland was not the appropriate jurisdiction in which to seek enforcement from the perspective of comparative cost and convenience pursuant to Order 11 of the Rules of the Superior Courts where the Defendants had no, and were unlikely in the future to have any, assets in Ireland.

The arguments

The enforcement proceedings related to an Albanian judgment in favour of an Albanian company (the "Plaintiff") against two Italian companies (the "Defendants") and recognition and enforcement was sought in Ireland in a sum of c. €433 million. Enforcement proceedings had also been brought in a number of other jurisdictions around the world including New York, The Netherlands, Luxembourg and France.

Leave to issue and serve the enforcement proceedings on the Defendants outside of the jurisdiction on the Defendants was granted on an ex parte basis pursuant to Order 11 of the Rules of the Superior Courts. A conditional appearance was entered in order to preserve the Defendants' right to challenge jurisdiction and, upon the proceedings being admitted to the Commercial Court, directions were given that the question of jurisdiction be determined in the first instance.

In considering whether to set aside the service, the court had to determine whether the Plaintiff had a good arguable case and whether the case was a proper one to determine in Ireland. The court noted that the 'comparative cost and convenience', meaning the fitness, propriety and suitability of bringing proceedings in Ireland, was relevant to the exercise of the court's discretion.

Whilst the judge accepted the Plaintiff had a good arguable case, whether it was a proper case to be determined in Ireland required him to address the question of whether the Defendants had assets within the jurisdiction. Although it was not a precondition that there be assets, the judge was satisfied that the court is entitled to consider whether the proceedings will serve any useful purpose. In this regard, he cited the English Court of Appeal decision in Tasarruf v Demirel(1) where it was held that the discretion to allow enforcement should not be exercised "unless it can be shown that a solid practical benefit would ensue". He observed that these principles had been found persuasive in Ireland in the case of Yukos Capital v Tomskneft(2) where Kelly J applied the "solid practical benefit" and found there was none in circumstances where the defendant had no connection with Ireland, no assets in the jurisdiction and no real likelihood of assets coming into the jurisdiction.

In this case, the Plaintiff pointed to certain factual matters in order to demonstrate that certain companies in the Enel group have or previously had a connection with Ireland.

The Plaintiff's principal argument was that it had identified that one of the Defendants (as well as other Enel group entities) had listed bonds on the Irish Stock Exchange which gave a sufficient connection with Ireland. The Defendants explained to the court that bonds by their nature constitute liabilities rather than assets, in that the bonds reflect funds owned by Enel which must be repaid to the bond holders upon maturity, so it would not be possible to seek execution against the redemption amount of such bonds. Furthermore, the listing of a bond in Ireland does not mean that any funds realised upon issue would ever be in or flow through Ireland (and this was the position as a matter of fact in respect of the bonds in question in this case). Accordingly, there were (and would be) no resultant assets in Ireland to be derived from such bonds.

The Plaintiff also argued that an Italian subsidiary of one of the Defendants had an Irish branch with a fixed term contract to provide services in Ireland and that this constituted a sufficient connection with Ireland. The court did not accept this argument in circumstances where the subsidiary in question was not a defendant in the proceedings and its assets would not be capable of being enforced against. The Plaintiff argued that it could look to pierce the corporate veil to get access to the subsidiary's assets but did not identify any grounds entitling it to do so. Furthermore, the Defendants contended that the subsidiary in question had no employees in Ireland and any monies received pursuant to its contract were received in Italy. In any event, by the time the motion was heard, the contract in question had terminated. Accordingly, even if the corporate veil could be pierced, there would be no resultant benefit to the subsidiary being susceptible to enforcement.

Decision

On the evidence McDermott J concluded that the Plaintiff could not demonstrate that any solid or practical benefit would ensue if the judgment were to be recognised and enforced in Ireland. He was satisfied that the Plaintiff could not demonstrate that the Defendants had any assets within the jurisdiction and nor could they point to any reasonable possibility of any assets coming into the jurisdiction. Accordingly, there was no practical benefit to be obtained from these proceedings and they served no useful purpose. Furthermore, given the enforcement proceedings brought elsewhere, he felt it would be unfair to require the Defendants to attend in yet another foreign jurisdiction.

Conclusion

This decision is important because it has confirmed that the test for the exercise of jurisdiction of the Irish courts for the enforcement of non-EU judgments is whether there is a "solid practical benefit" to be derived from such proceedings. Although having assets within the jurisdiction is not a pre-condition for enforcement, the absence of assets (or any real prospect that they will come into the jurisdiction) is likely to be sufficient for a finding that there is no "solid practical benefit". This is consistent with the approach of the Irish courts to the question of jurisdiction to enforce foreign arbitral awards.

Footnotes

 1. [2007] 4 All ER 1014
 2. [2014] IEHC 115

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.