ANGLO IRISH Bank could have to wait five years to recover €500 million from several Quinn companies if the High Court rules it does not have jurisdiction to grant an injunction preventing Quinn family members from transferring assets, it was claimed yesterday.
The claim was made by Paul Gallagher SC, for Anglo Irish Bank, during a hearing in the High Court over whether the court has jurisdiction to deal with the issue of an interlocutory injunction being sought by the bank against Seán Quinn and several of his family.
Anglo Irish Bank is owed some €2.8 billion by Quinn interests and in its proceedings against Mr Quinn and his family, Anglo Irish Bank claims the Quinn side had set up “a mirror corporate structure”, the Cranaghan Foundation.
Anglo Irish Bank claims the Cranaghan Foundation is “a systematic attempt” to transfer assets worth an estimated €500 million to “mirror” Quinn companies for the benefit of the Quinn family, including Mr Quinn’s children and grandchildren.
Bill Shipsey SC represents Mr Quinn; his children Ciara, Colette, Seán jnr, Brenda, Aoife; his nephew, Peter; and sons-in-law, Stephen Kelly and Niall McPartland; as well as two companies, Quinn Investments Sweden AB and Indian Trust AB.
Yesterday, Mr Shipsey told the court proceedings had been initiated by the Quinn family in a court in Cyprus where some of the assets are located to have share pledges made by Quinn against the €2.8 billion loaned by Anglo Irish Bank to the Quinn family set aside.
Mr Shipsey said that these proceedings in Cyprus were initiated on June 20th last, a week before Anglo Irish Bank initiated injunctive proceedings against the Quinns, and that, as a result, the court in Nicosia was the court of first seise in the case.
Under article 28 of the Brussels Regulations on Jurisdiction and Recognition and Enforcement of Judgments, which is aimed at avoiding conflicting decisions by different courts in different jurisdictions, the Cypriot court has jurisdiction over the matter, he argued.
Mr Shipsey said that if proceedings went ahead in Ireland, then a situation could arise where the parties were left with irreconcilable judgments being given by courts in Ireland and Cyprus.
This would run counter to article 28.
However, Mr Gallagher argued the matter was related to an action initiated by Patricia Quinn and her children in the Irish High Court last May against Anglo Irish Bank in which the Quinns claim loans of €2.34 billion by Anglo to various Quinn companies are unenforceable.
In that action by Patricia Quinn which is expected to be heard in January 2012, the Quinn side argue that the €2.34 billion loaned to Quinn companies and various Cypriot-registered companies were issued illegally to support the falling Anglo Irish share price.
Yesterday, Mr Gallagher argued that, as a result of that Irish action preceding the Cypriot action, the High Court has the jurisdiction to deal with Anglo’s application for an injunction preventing the Quinn family from transferring assets from its Swedish companies.
Mr Gallagher argued that the injunction was the only mechanism open to Anglo Irish Bank to prevent the Quinn family from transferring assets.
This transfer, he argued, was invalid and unlawful as it would be in breach of their share pledge which underlined the loans.
And he said that if Mr Justice Clarke accepted he had to put a stay on these High Court injunction proceedings, then Anglo Irish Bank would have to wait five years to address the transfer as that was how long it was estimated the Cypriot court could take to rule on the matter.
Mr Gallagher also argued that the High Court injunction proceedings relating to the Quinn’s International Property Group were significantly different to the Quinn proceedings in Cyprus which involved only six of the IPG share pledges.
The case continues.
