A High Court judge will rule next week whether the courts have power to lift a stay in the new Irish Bank Resolution Act which has halted all existing legal actions against the bank.
About one third of existing cases before the Commercial Court are against IBRC and the stay has caused uncertainty whether any steps at all may be taken in relation to them with several judges raising the issue since the Act came into force last month.
Lawyers for the family of bankrupt businessman Sean Quinn applied to the court last month to lift the stay on their proceedings against the bank alleging they are not liable for some €2.34 billion loans made to Quinn companies on grounds those loans were unlawfully made by Anglo to prop up its plummeting share price.
The family argued the court could lift the stay and their lawyers also made clear, if the stay was not lifted, they would challenge the constitutionality of the relevant provision in the Act - Section 6.2.a.
The special liquidators of IBRC later indicated they agreed with the Quinns that the court has power to lift the stay but Mr Justice Peter Kelly ruled there would have to be a hearing to decide that issue in circumstances including that the Act disapplies the normal provisions relating to the courts' ability to lift a stay.
Mr Justice Sean Ryan today heard arguments on behalf of the special liquidators and the Quinns that the court has jurisdiction to lift the stay and said he would rule on the issue on March 15th.
In his submissions, Martin Hayden SC, for the Quinns, said it was a "unique" application as the two sides had "rarely" agreed on anything before this.
Mr Hayden argued the Act should be construed as meaning the stay remains in place unless and until an affected party applies to the court to lift it in which circumstances the court may lift it.
It the court could not do so, that would breach the entitlement of all citizens to equal access to the courts, counsel said. Any such ousting of the courts jurisdiction would have had to be set out "in clear and unambiguous terms" but that was not done.
The whole tenor of the Act is to "draw a line in the sand where everything stops dead" but the Act did not prevent parties taking steps after that, he said. A line had had to be drawn in the Act because of concerns such as "a flight of funds" if there was any notice of the special liquidaton of IBRC last month, he said.
Brian Murray SC, for IBRC, said the very use of the word "stay" in Section 6.2.a indicated an intention to suspend proceedings, not to completely terminate them.
The terminology meant there was always potential for the stay to be lifted because, if it was intended the stay could never be lifted, that word would not have been used, he said.
The full hearing of the family's case has been deferred pending the criminal trials of former Anglo Chairman Sean Fitzpatrick and two former senior executives of the bank - Pat Whelan and Willie McAteer.
Pre-trial applications are continuing and, if the stay is lifted, the family will later indicate if they intend to apply to join the Department of Finance and Central Bank - as regulator of the banks - as co-defendants with IBRC.
