State not entitled to indemnity from BT over Declan Ganley's action on mobile licence

By Ann O'Loughlin

The State is not entitled to an indemnity and contribution from a telecommunications company to any loss that might result from an action over the awarding of the country's second mobile phone licence in 1996, the High Court has ruled.

Ms Justice Carmel Stewart granted BT Communications Ireland, formerly EsatTelecommunications, an order striking out notices for such indemnity and contribution made by the Minister for Public Enterprise and the State.

It would arise if businessman Declan Ganley, Comcast International Holdings Inc., Ganley International Ltd and GCI Ltd win an action they have taken over the awarding of the second mobile phone licence, a competition in which their Cellstar consortium was an unsuccessful bidder.

The case was originally against the Minister, the State, BT, businessman Denis O'Brien, and former minister Michael Lowry TD.

In 2013, the Ganley/Comcast group sought to amend their statement of claim but BT refused to consent to this. BT then sought to have the Ganley/Comcast claim struck out for failure to disclose a reasonable cause of action.

In 2014, the High Court dismissed the claim against BT on consent in 2014 and Ganley/Comcast was then allowed to amend its statement of claim without objection from the other defendants. Since then, Mr O'Brien has withdrawn similar indemnity and contribution notices against BT.

The State defendants said they were not prepared to do the same and BT then applied to have the State's notices struck out.

BT submitted that its role in the 1996 tendering process was limited to preparatory work including the acquisition and development of transmission sites.

No adverse findings were found against them by the Moriarty Tribunal which was set up to look into the awarding of the second mobile phone licence, it said.

The State defendants said the 2014 dismissal on consent order was not a release or an accord. They questioned how, at the trial of the main action, a judge could be expected to reach a fully informed decision if BT was released completely from the case and spared the burden of having to discover documents.

Ms Justice Stewart said this latest case was "but a small scene in the saga of legal proceedings" which were inspired by the tendering process for the second GSM licence.

She said it would be open to Ganley/Comcast to have the 2014 consent order in favour of BT set aside if there was found to be fraudulent or dishonest concealment of wrongdoing by BT. But it would be an impermissible limitation on the court's inherent jurisdiction to dismiss claims if reliefs could be refused "on the grounds of abstract judicial hypothesis".

Notwithstanding her dismissal of the indemnity and contribution claim by the State, it would still be open to the State to issue fresh indemnity and contribution notices against BT if such a scenario (of wrongdoing) should come to pass, she said.