A recent Irish High Court case shows how unexpected differences in foreign court procedures may lead to expensive litigation in more than one country. Companies may benefit from early assessment of such risks, and the options available, when faced with a cross-border dispute.

Facts

Celtic Atlantic (“Celtic”), an Irish fish farm, bought feed from Aller Ireland and Aller Denmark. Many of Celtic’s fish became sick or failed to thrive.  In mid-2008, Celtic’s veterinary experts reported that the fish feed was deficient in phosphorous. Later that year, Aller Denmark sued Celtic in a Danish court for unpaid invoices. They also asked the court to declare that the feed was in conformity with the contract.

In February 2010 Celtic learned that probably they could not use the 2008 Irish veterinary reports in the Danish court. Danish courts appoint their own experts, rather than relying on the parties’ experts. Unfortunately, by 2010, a court expert could not examine the fish and feed, as they no longer existed. As a result, Celtic did not take part in the Danish trial, and the court awarded judgment to Aller Denmark for the feed supplied.

In most circumstances, matters in a case decided by another EU courts may not be re-litigated in Ireland. However, on 31 July 2014, the Dublin High Court permitted Celtic to proceed with negligence proceedings in Ireland against Aller Denmark alleging that the supplier ought to have known that the feed was unsuitable for the fish in question. The court said that it would be contrary to public policy not to allow that aspect of the dispute to proceed. Celtic could not have foreseen in summer 2008 that it would be necessary to apply to the Danish courts to have a report commissioned and so, in 2010, it could not have advanced that claim effectively in Denmark.

Assessing risks and jurisdiction options

This is a very rare example of an Irish court deciding that a judgement of another EU court will not be recognised in full.

Companies usually prefer to fight cases  on home territory, or go to arbitration. Depending on the terms of the contract or other circumstances of the case, an Irish company may be able to sue the foreign company in Ireland, rather than risk being sued in the other country. In every case with a foreign element, however, early assessment of the options available is important.