A bid by the Barclay brothers and financier Derek Quinlan to force Paddy McKillen to sell his shares in three luxury London hotels to them will be heard in London, the High Court in London has ruled, rejecting a challenge from Mr McKillen.
Mr Quinlan and a number of companies controlled by the Barclays argue that Mr McKillen's shares in Coroin – which owns the Berkeley, the Connaught and Claridges – should be surrendered.
Misland Investments, one of the Barclay companies, owns 28.36 per cent of Coroin shares while Mr Quinlan owns 35.4 per cent – although his shares have been mortgaged in favour of two other Barclay companies, Ellerman Corporation and B Overseas Ltd.
Mr Quinlan and the Barclay companies argued that a deed of charge given by Mr McKillen in 2008 to Anglo Irish Bank – renewed in March and May 2009 but unpaid since – became enforceable in February 2013.
The court battle is the latest chapter in the seemingly interminable war, which has been going on for over three years and which so far has left Mr McKillen with nearly €25 million worth of legal costs.
Mr McKillen is opposing the hearing of the case in England, saying that an English court “had no jurisdiction to try the claim” and that if the issue is to be heard, it should be adjudicated by one in Ireland.
Under Coroin’s articles of association, the board of the company may require a shareholder to offer their shares to other shareholders if a security granted to a borrower becomes enforceable.
Mr Quinlan and the Barclays argue that the legislation that set up the Irish Bank Resolution Corporation in February 2013 caused Mr McKillen's debt to become enforceable.
Mr McKillen strongly denies that his debts amount to “an event of default”. He also denied that he has an English domicile, but has not said where he is domiciled, though he allows “for the purposes only of the present applications” that his domicile is in Ireland, the judgment reads.
The case against Mr McKillen and a parallel action against Coroin are the same, Master Bowles says in his ruling, creating “the plainest risk of irreconcilable judgments” if they were heard “in separate courts and in separate jurisdictions”.
It is “manifestly absurd”, he adds, that the English proceedings should be stayed “in favour of as yet non-existent Irish proceedings”, where Mr McKillen has yet to say unequivocally where he is domiciled or where Coroin has not said that it would abide by an Irish court’s decision.
Last night, Mr McKillen’s spokesman said the London case was “a mere jurisdiction point” over a claim of default.
