Web Summit court case settled after parties come to resolution

High Court Reporter

The bitter High Court civil trial involving three shareholders of tech conference giant Web Summit has been finally settled after talks between the parties came to a resolution on a Wednesday afternoon.

At 11am on Thursday morning Joe Jeffers SC, for minority shareholder in Web Summit David Kelly, told the court that all matters had been resolved to a satisfactory conclusion between majority shareholder Paddy Cosgrave, Mr Kelly and former director Daire Hickey and that matters were to be listed for mention before the court on April 29th.

On the seventh day of the civil trial hearing of five separate actions, Mr Justice Michael Twomey said he was “really, genuinely pleased” for all parties in the case who saved court time and possible reputational and personal cost in cases that had been listed to last up to nine weeks.

Mr Justice Twomey then wished all parties the best for the future and adjourned the matter until next month.

On Wednesday, the court was due to hear evidence from Web Summit minority shareholder Mr Hickey but proceedings were put back as lawyers and parties held talks in corridors all morning outside Court 29 in the Four Courts.

At around 12.30pm on Wednesday, barrister Michael Cush SC, also for Mr Kelly, told Mr Justice Twomey that negotiations had not yet borne fruit but that time in the case had not been wasted.

Mr Justice Twomey then adjourned the case until 2pm.

At around 2:05pm Mr Cosgrave's legal team asked him to step outside the court and five minutes later counsel for all three were seated before Mr Justice Twomey.

Mr Cush said he was pleased to say there had been a beneficial development through talks and that what was discussed between all three parties will be written up overnight and presented to the court tomorrow morning.

Mr Cush thanked the judge for the time allowed for the parties to enter into settlement discussions. Mr Justice Twomey then adjourned the matter for finalisation until 11am tomorrow morning.

Majority shareholder Mr Cosgrave was suing Mr Kelly, who owns 12 per cent of the shares in Web Summit, for alleged breaches of his fiduciary duties as a director of the company.

Mr Cosgrave was, in turn, being sued by Mr Kelly and Mr Hickey, who holds seven per cent of the shares in Web Summit, for alleged shareholder oppression and breaches of a profit-sharing agreement.

Yesterday at the High Court, Mr Justice Twomey urged the parties to resolve their differences, rather than suffer the "real and human" cost of spending months in litigation.

Mr Justice Twomey quoted the French philosopher Voltaire, saying: "I was never ruined, but twice - once when I lost a lawsuit, and once when I won one.”

He urged the three parties not to focus on the “rights and wrongs” of the history of their business disputes but to focus on resolution.

He said mediation was "a thousand times more preferable than going into litigation" and warned that the three months for which the case is scheduled could mean a judgment from him in the winter which might not satisfy any of the parties.

This, he said, may lead to appeals and possibly thereafter to Supreme Court appeals, which could take up to three years from now to deliver a final judgment.

Mr Justice Twomey warned that there would be a personal cost to the proceedings and that should matters be litigated to their fullest it would be three months of their lives they will "not get back, never get back" and that there would be a "real and human" cost to all involved.

Last week, when lawyers for all parties made their opening statements, Bernard Dunleavy SC, for Mr Cosgrave, said that proceedings brought by Mr Kelly and Mr Hickey are an attempt to avoid a discount on the potential sale of their shares in the tech conference firm.

Mr Dunleavy, who was responding to opening statements delivered in the proceedings by Mr Hickey and Mr Kelly’s counsel, said Web Summit is “big enough and valuable enough” to make the two minority shareholders “millionaires many times over in the morning” if they sold their stakes.

Speaking afterwards Mr Cosgrave said it was a “great day for Web Summit” and that the company was “delighted to remove these two individuals [Mr Hickey and Mr Kelly] as minority shareholders”.

“Our agreement vindicates everything Web Summit has done to protect its interests and stand up for its principles. It’s heartening that Daire Hickey and David Kelly have recognised publicly what we have known for years: that them leaving the company as shareholders is in Web Summit’s best interests.

“It’s gratifying that every single one of the claims made against me or the company has been withdrawn and crucially, David and Daire have finally publicly accepted that I and I alone founded Web Summit in 2009, contrary to their claims over many years.

“Thankfully, though, we have an amazing team at Web Summit and can once again focus wholly on growing our position and reputation as the world’s premier tech conference.

“I would like to thank our legal team, led by Bernard Dunleavey SC, Derek Shortall SC, [solicitor] Elizabeth Burke, who is amazing, and our general counsel Adam Connon, who is also amazing, my colleagues and friends as well and most of all, my amazing wife, Faye, my two boys and my wonderful family for always supporting me and doing the right thing. Thank you very much.”

A statement from Mr Hickey said: "Daire is very pleased with the outcome today. He would like to thank his family, friends and colleagues as well as his excellent legal team, Dentons, and his barristers for their support throughout. He is now looking forward to getting back to work and his family life.”

A statement from Mr Kelly, who was not in the court this morning, said: “David is very pleased that an agreement has been reached between the parties. He is grateful to Dillon Eustace, his entire legal team and his family and friends for their support throughout the process and the many years leading to this.”

Web Summit has been valued at between €280 million and €360 million.

Details of the settlement were not made public in court on Thursday.