Fruit importer Fyffes has won a Supreme Court appeal against the High Court's dismissal of its mammoth "insider trading" action against industrial holding group DCC.
The multimillion euro legal confrontation with DCC has been ongoing since early 2002, when Fyffes sued DCC over the sale of its 10 per cent stake in the fruit group in February 2000.
DCC received €106 million for its Fyffes shares, yielding a €85 million profit. The case ran for 87 days in the High Court in 2005.
Today's ruling follows a five-day hearing last month in which Fyffes sought to overturn Ms Justice Mary Laffoy's rejection of its claim for €85 million in compensation from the DCC transaction.
Ms Justice Susan Denham presided over the five-judge Supreme Court which ruled unanimously in favour of Fyffes. The company will now take its case back to the High Court.
At issue in the appeal was whether High Court judge Ms Justice Laffoy was correct in her ruling that DCC chief Jim Flavin was not in possession of price-sensitive information about Fyffes' trading at the time of the sale of DCC's stake in the business.
Mr Flavin was then a director in Fyffes, and he had trading reports for November and December 1999 that indicated a negative performance in the first-quarter of the 2000 financial year.
Ms Justice Laffoy found Mr Flavin did "deal" in the Fyffes shares and effectively controlled the whole process but did not do so unlawfully. She ruled there was "a fundamental incongruity" between Fyffes's own conduct in early 2000 and its claim that Mr Flavin had price-sensitive information.
Fyffes said in its appeal that the insider-dealing laws were enacted to achieve equality in the market. It argued that Mr Flavin had a significant advantage over other investors in making the transaction.
Shares in Fyffes jumped 10 per cent on today's news, while those in DCC fell as much as 7 per cent. Shares in Fyffes were at €0.88 in Dublin by 11.47am, while DCC was 3.2 per cent lower at €21, having earlier fallen as low as €20.20.
In a statement this afternoon DCC said it expects an aggregate liability, including legal costs, of not more than €50 million, after the Supreme Court ruling.
DCC said it believes its liability to Fyffes resulting from this judgment will not exceed the difference between the price at which the relevant shares were sold and the price those shares would have realised had the relevant information been generally known.
Fyffes also issued a statement after the ruling, saying it was pleased that its Supreme Court appeal has been successful and that the five Judges of the Court found, unanimously, that the trading information in Mr Flavin's possession when he dealt in Fyffes shares in early 2000 was price sensitive.