JUDGMENT
KEANE J.:
[1] In the present application which has been at hearing for some
considerable time, I have gained extensive knowledge of the background
to the dispute between the parties. For reasons which will subsequently
become clear, it is neither necessary nor desirable to express any view on
the merits of the case as I have firstly to decide whether or not the Irish
courts have jurisdiction to determine the present application.
[2] The plaintiff seeks in the present motion:
(1) An order restraining the defendants and each of them from purporting
to summon, attend or vote at the general meetings of the companies
more particularly described in the schedule hereto to be held on 16
February 1996 (or any adjourned date) and in particular, an order
restraining the defendants and each of them from summoning, attending
or voting at the said general meetings of the said companies for the
purpose of removing the plaintiff as director of the said companies or any
of them.
(2) An order directing the first named defendant as a director in the
companies listed in the schedule hereto, to sign the draft accounts of the
said companies, to execute all documents for the purpose of enabling the
said companies to remain on the register of companies and to execute
all documents required for the purpose of enabling the said companies to
have a proper registered office in this jurisdiction.
[3] The plaintiffs issued a plenary summons in the ordinary way and
served the above mentioned motion. It is not in dispute between the
parties that the first named defendant was appointed by the courts of
Luxembourg and purports to summon meetings of the Irish companies for
the purpose of removing the plaintiff as a director of the said companies,
nor is it in dispute that he intends to use his voting power at the said
meetings in order to remove the plaintiff as a director of the companies.
[4] The companies in question were all incorporated in accordance with
the laws of this country and all have registered offices in this jurisdiction.
Having said that, this fact (and the fact that the parties to the present
application are represented by Irish solicitors and counsel) is the only
and very tenuous connection which this jurisdiction has with a series of
disputes which form the background to the present application.
[5] The disputes in question arise out of the difficulties of the second-
named defendant company, which is a company registered in Luxembourg
and incorporated under the laws of that State. The principals to these
disputes are not only the first-named defendant (who is an official
appointed by the Luxembourg courts) and the plaintiff (who is a Greek
national) but also a French person, whom it is alleged has behaved
improperly in relation to the transfer of funds into E. M. and their
subsequent disposition. I express no view on these latter allegations.
[6] E. M. was to be a business venture concerned with operations in
various countries in Southern Europe (namely, Greece, Spain, Italy and
Portugal) in the leisure and residential field, with particular emphasis on
tourism. It will be seen that the connection (geographical or otherwise)
of this jurisdiction to that factual matrix is peripheral in the extreme.
However, that is not relevant to the question of whether I should
decide that this court has jurisdiction in this dispute, having regard to
the Jurisdiction of Courts and Enforcement of Judgments (European
Communities) Act 1988 which gives effect in this jurisdiction to the E.C.
Judgments Convention which is scheduled to the Act.
[7] In determining whether the court should decline jurisdiction, it
is important to say something about the position of the first-named
defendant in relation to the second-named defendant. The second-named
defendant was incorporated in accordance with the laws of Luxembourg
and is a 95 per cent shareholder in the Irish companies. In circumstances
that have been recited in detail in the order of the Luxembourg Court
of Appeal, the first-named defendant was appointed as provisional
administrator of E. M. and empowered to manage and administer its
affairs in accordance with commercial law and practice until a final
decision is taken on the substantive dispute between its two classes of
shareholders. That dispute, essentially relating to which class could elect
the board of directors of E. M., led the Luxembourg court to the view that
E. M. was paralysed and that therefore an officer should be appointed to
manage and administer its affairs.
[8] In purported pursuance of the powers conferred in that order, the
first-named defendant has convened meetings of the Irish companies
which are an essential link in the chain of ownership and control of
properties situate in Greece. In purported execution of the mandate
conferred on him by the Luxembourg courts, the first-named defendant
intends to cast the vote of the 95 per cent shareholder of these
companies to remove the plaintiff as a director of the companies. The
first-named defendant purports to do this on the basis that the plaintiff
is not acting in the interests of the Irish companies or their shareholders
and has misused his position as a director to advance his personal
interests. The plaintiff has strenuously contested that this is so and
has claimed that the first-named defendant has grossly and seriously
exceeded his powers under the Luxembourg court order appointing him.
Accordingly, the plaintiff seeks to restrain the holding of the meetings.
This is the background to the decision I must make as to whether the
Irish courts should seize jurisdiction in relation to the present application.
[9] This depends upon the proper interpretation of Article 16(2) of the
E.C. Judgments Convention which states that:
The following courts shall have exclusive jurisdiction, regardless of
domicile:...
(2) in proceedings which have as their object the validity of the
constitution, the nullity or the dissolution of companies or other legal
persons or associations of natural or legal persons, or the decisions of
their organs, the courts of the Contracting State in which the company,
legal person or association has its seat.
[10] Mr O'Moore who has urged everything which could possibly be
urged on behalf of the plaintiff said that the seat of the companies for
the purposes of Article 16(2) should be the registered office of the Irish
companies. He submits that these companies come within the ambit
of Article 16(2) in relation to the dispute that is now before the court.
Accordingly, since the validity of proceedings/meetings of the Irish
companies will inevitably arise, the registered office of those companies
should determine who is to have jurisdiction.
[11] Mr Healy, on behalf of the defendants, submits that Maitre T., the
first-named defendant, is an organ of the second-named defendant and
possibly, in the present circumstances, the only organ. Accordingly, these
proceedings must involve a question of the validity of decisions by that
organ, namely, Maitre T.. Maitre T. as an organ of E. M. and, in effect, its
alter ego, has called a meeting of the subsidiary Irish companies in his
capacity as the 95 per cent shareholder of those companies. His actions
in this regard are either lawful or unlawful and that question must be
determined by the Luxembourg court which made the order under which
Maitre T. was appointed.
[12] There are affidavits from Luxembourg lawyers which have been
opened and which express different views as to whether Maitre T. is acting
within or without his mandate in convening these meetings. It is very
difficult to resolve a conflict between lawyers from another jurisdiction
without evidence and the benefit of cross-examination. However, it is
unnecessary to express even the most tentative view on this question as
this can only be determined by the Luxembourg court. I have no doubt
that, whatever status Maitre T. enjoys, he must be an organ of E. M.
within the meaning of Article 16(2) of the Convention. It is common case
that he has been appointed provisional administrator of that company
in circumstances where the company itself was paralysed and unable to
function. Under the terms of his appointment, he is required to manage
and administer the affairs of E. M.. I accept that E. M. is further inhibited
by an order freezing its bank account. What residual affairs require to
be dealt with are, by virtue of the order of the Luxembourg court, to be
dealt with solely and exclusively by the first-named defendant until a final
decision has been taken by the court in Luxembourg on the substantive
dispute between the shareholders.
[13] I have no doubt that these proceedings raise the question of the
validity of the decision of an organ of E. M., namely, Maitre T., to convene
meetings of the Irish companies in his capacity as 95 per cent shareholder
and plainly, only the court in Luxembourg can answer that question.
[14] I reach that conclusion irrespective of the argument between
different groups of academic commentators, relying on the comma after
the word "persons" as to whether Article 16(2) should be construed as
dealing only with the decisions of organs or in the alternative, the validity
of the decisions and not simply the decisions themselves. Regardless
of which view one takes only the Luxembourg court can resolve this
application. To the extent to which it is relevant I adopt the reasoning of
the English Court of Appeal in the case of Grupo Torras v. Al-Sabbah in
which the court took the view that all the provisions of the Convention
should be interpreted in a purposive manner, i.e. that there should not be
too much fine-tooth combing of the grammatical and syntactical minutiae
of the Convention and that it would be inappropriate to be misled by some
fine parsing of the wording of the Convention: This is particularly so in
view of the fact that the Convention has had to be translated into several
languages. The broad purpose of Article 16(2) of the Convention must be
taken into account. The effect of the Article is abundantly clear and it is
clear that this matter is not one that should be determined by the Irish
courts and accordingly I propose to make the necessary declaration..
[15] I propose to stay the proceedings simpliciter and award the
defendants the costs of the motion. I also grant a stay on the order for
costs in the event of an appeal.