The Supreme Court has referred, as "a matter of great urgency", a number of legal issues to the European Court of Justice (ECJ) arising from a controversial Italian court decision on a Parmalat subsidiary.

The Italian court decided to place into extraordinary administration Eurofood IFSC, an insolvent Irish company and wholly owned subsidiary of the Italian food giant Parmalat SPA.

The five-judge Supreme Court yesterday unanimously agreed with a High Court judge that the decision of a court in Parma last February breached fair procedures and therefore should not, "as a matter of Irish public policy", be recognised by the Irish courts.

The Parma court's decision was made just weeks after insolvency proceedings were initiated in the Irish courts.

The Supreme Court found that the procedures before the Parma court were unfair, particularly the failure of the Italian-court-appointed extraordinary administrator, Mr Enrico Bondi, to give the Irish provisional liquidator, Mr Pearse Farrell, the legal documents grounding the application to the Italian court until that court hearing was over. The largest creditors of Eurofood also complained that they were not notified of the Parma hearing.

Until the ECJ determines a number of questions, it will be impossible in practice to administer the assets of the company, Mr Justice Fennelly said yesterday. The questions relate to whether insolvency proceedings regarding Eurofood first opened here or in Italy and where the company's centre of main interests lie.

The ECJ has also been asked to decide whether Ireland, in circumstances where the Irish courts have found fair procedures were not followed at the Parma court hearing and that recognition of the Parma court's decision "is manifestly contrary" to the public policy of the Irish state, is bound to recognise the Italian court's decision.

In the High Court last March, Mr Justice Kelly decided that the presentation of the petition here brought about the opening of insolvency proceedings in Ireland, that the centre of main interests of the company was in Ireland, and that the court in Parma did not have jurisdiction to open insolvency proceedings regarding Eurofood.

He also refused to recognise, on grounds of Irish public policy, the decision of the Parma court placing the company in extraordinary administration under Italian law and determining that the main interests were in Italy.

He granted a winding-up order for Eurofood, appointed Mr Farrell as liquidator and later permitted Mr Farrell to initiate proceedings in Italy aimed at overturning the Parma court decisions.

Mr Bondi has appealed those High Court findings to the Supreme Court.

Delivering the Supreme Court decisions yesterday, Mr Justice Fennelly described the case of Parmalat SPA and its associated companies as among "the most notorious large-scale insolvencies in the world in recent times".

He agreed with the High Court that the Parma court decision to place Eurofood into extraordinary administration should not, as a matter of Irish public policy, be recognised by the courts here.

He added that it was "not possible to refrain from criticising, in the strongest terms" the behaviour of Mr Bondi in relation to refusing documents to Mr Farrell prior to the Parma court hearing.

In a like situation, the Supreme Court here would not allow any corresponding decision of a court or an administrative body to stand, Mr Justice Fennelly said.

However, he continued, it was clear that, in order for the Supreme Court to be able to give judgment on the appeal, it must refer questions for preliminary rulings to the ECJ. Those questions related to the interpretation of Council Regulation (EC) No.1346/2000, a regulation dealing with insolvency issues.

The court also found as facts that Eurofood was incorporated in Ireland in 1997 with registered office at Harbourmaster Place, IFSC, Dublin, with its principal objective being the provision of financing facilities for companies in the Parmalat group.

Bank of America NT and SA managed the day-to-day administration of the company. Until December 2003, Eurofood had four directors. Two were Irish and were based here while two were Italian and based in Italy.

One of the Italian directors resigned in late 2003 and the second in January 2004. Two meetings of the board of directors in December 1998 approved two large financial transactions - note issues of US$80 million and $100 million respectively to Venezuelan and Brazilian companies in the Parmalat group.

The liabilities of Eurofood under the two note issues were guaranteed by Parmalat. The creditors of the company, the "note holders", were now owed more than $122 million and Eurofood could not pay its debts.