Microsoft Ireland suing Saudi companies for €27m through Irish courts

Microsoft Ireland Operations is suing two Saudi Arabian companies in the Commercial Court for more than $31 million (€27.3 million) allegedly owed under various "channel partner agreements".

One of the companies, Arabic Computer Systems (ACS), was described in court documents as a long-standing partner of Microsoft, accounting for about half of sales of Microsoft licences in the Saudi Arabian market.

The case by Microsoft Ireland Operations Ltd, with registered offices in Leopardstown, Dublin 15, is against ACS and National Technology Group, both incorporated in Saudi Arabia.

It relates to Microsoft Channel Partner Agreements allegedly entered into on dates in September 2014 and September 2016.

On Monday, Eoin McCullough SC, for Microsoft Ireland, applied to have the proceedings fast-tracked in the Commercial Court.

The claim against ACS concerned goods supplied to ACS while the claim against the second defendant was as guarantor of the debt, he said.

Rejecting arguments that Microsoft’s delay in pursuing the matter to court disentitled it to the benefit of fast-track procedures, counsel said there was a long-standing commercial relationship between the sides and Microsoft had thought ACS was experiencing a cash flow problem and would honour its obligations.

The first his side heard of a defence to the claim “on the merits” was after Microsoft initiated these proceedings, he said.

Irish jurisdiction

That defence was to the effect the parties who had entered the relevant contracts for the defendants were not authorised by the defendants to do so, the court heard.

In court documents, Microsoft says the relevant agreements provided for any dispute to be determined in the Irish courts.

Another reason the company wanted the case fast-tracked here was because Microsoft had been advised, as a matter of Saudi law, no interest can be recovered on any judgment sum obtained in the Irish courts against the defendants, it said.

Joe Jeffers BL, for the defendants, said they maintain the Irish courts have no jurisdiction in the matter and had entered a conditional appearance only.

Without prejudice to the jurisdiction point, counsel argued Microsoft’s delay was such the case should not be fast-tracked.

Mr Justice Haughton said he would admit the case to the commercial list.

The reasons why Microsoft had held off before issuing these proceedings was because it thought its debt would be paid arising from a $42 million (€36.9 million) sale of a part of ACS’ business known as Arabsoft, he said.

He considered Microsoft had taken a “reasonable” approach and it had not acted precipitatively in this matter.

It was notable it was only “late in the day” that correspondence was received indicating a defence to the effect that the parties that signed the relevant contacts were allegedly not authorised to do so, he added.

The judge has returned the case to late February.