High Court finds Irish firm not bound by Dutch supplier’s contractual terms

The High Court has found that an Irish firm suing a Dutch company over allegedly defective components supplied for its manufacturing process was not bound by the supplier’s general contractual terms and conditions.

Biomass Heating Solutions Ltd (BHSL), of Kantoher Business Park, Co Limerick, develops and builds equipment that enables poultry farmers to convert chicken waste into energy.

They work by burning poultry manure which is turned into hot water or steam which is then used to heat the farm or, secondarily, to produce electricity.

As part of the process, BHSL bought heat exchange systems from Geurts International BV of Leiden, the Netherlands, which it is said were incorporated into units it supplied to farms in the UK.

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However, BHSL said defects in the Geurts heat exchange systems became apparent around December 2016.

It says it spent €2.6 million on repairing those defects including the use of third-party contractors, additional or replacement parts, staff costs and customer claims against BHSL. It estimates it lost another €1 million in profits.

Geurts denied the claims and sued BHSL in the Netherlands for about €1 million it said it was owed by the Irish firm. The Dutch courts, however, refused to allow that case to be dealt with in the Netherlands.

When BHSL’s case came before the Irish High Court, it was decided that it would be dealt with on a modular basis starting essentially with whether Geurts’ general contractual terms were applicable, in particular whether exclusion of liability and limitation clauses applied.

BHSL argued they did not and Geurts said they did.

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In a judgment, Mr Justice Denis McDonald said that while there were a number of individual contracts between the parties, which did not all follow the same pattern and which he had to consider individually, it was clear to him that “in no case, do the defendant’s general terms and conditions apply”.

He adjourned the case to later this month to allow the parties to liaise with each other in relation to costs and any other issues with a view to trying to reach agreement in relation to the orders to be made on foot of his judgment. He would also fix a date for the hearing of the main trial.