LAST UPDATE | 27 Mar

THE BITTER HIGH Court civil trial involving three shareholders of tech conference giant Web Summit has been finally settled this morning after talks between the parties came to a resolution yesterday afternoon.

Founder Paddy Cosgrave said he was “delighted” that his two former friends would now leave the company.

Details of the resolution were not made public in court today.

At 11am this 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 parties and that the case could be listed for mention before the court on 29 April.

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, who have saved cost, court time and avoided possible reputational and personal cost.

The case had been expected 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. 

Outside court, Mr Cosgrave said he was “delighted” with the resolution and said Web Summit will now focus on “growing our position and reputation as the world’s premier tech conference”.

A statement from former director Daire 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 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.”

Yesterday, the court was due to hear evidence from former Web Summit director Daire Hickey but proceedings were put back as lawyers and parties held talks in corridors all morning outside Court 29 in the Four Courts.

Daire Hickey arriving at the Four Courts today RollingNews.ie RollingNews.ie

While those talks did not immediately bear fruit, Michael Cush SC, for Mr Kelly, indicated in the afternoon that there had been a “beneficial development”.

That led to this morning’s announcement that the litigation would not now go ahead.

Web Summit majority shareholder Paddy Cosgrave was suing Mr Kelly, who owns 12% 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 7% of the shares in Web Summit, for alleged shareholder oppression and breaches of a profit-sharing agreement.

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

Mr Justice Twomey had urged the parties to resolve their differences, rather than suffer the “real and human” cost of spending months in litigation.

Quoting the French philosopher Voltaire, Mr Justice Twomey said: “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 said 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.

Mr Cosgrave’s side also claimed that Web Summit lost over €11m after Mr Kelly “co-opted for private profit” the workings, expertise and networks of a fund set up by Web Summit in starting up a new, rival tech fund called Semble.

Lawyers for Mr Hickey alleged that Paddy Cosgrave engaged in a “vendetta” against their client in an attempt to “blackmail” him into giving up his shares in the company.

Eoin McCullough SC, for Mr Hickey, said Mr Cosgrave had refused company information, strategy and finances to Mr Hickey, who had complained about corporate governance between 2019 and 2021.

A further claim alleged that Mr Cosgrave messaged Mr Kelly that he was aware of a visit by Mr Kelly, when he was a director of Web Summit, to what Mr Cosgrave described as a Singaporean “brothel”, known there as the “Four Floors of Whores”.

Michael Cush SC, opening the case for Mr Kelly, said it was submitted that Mr Cosgrave had claimed he believed that photos of the visit could have been used [by another] as a “hold” over Mr Kelly.

Mr Cush said that Mr Kelly and a group were brought to the Singapore venue by “a VC” and that “absolutely nothing” happened inside before Mr Kelly and the group left.

The court was told there would be evidence of a recorded March 2021 phone call, in which Mr Cosgrave alleged that Mr Kelly “concealed for years sexual harassment by another cofounder” and that he had refused to share the letter of complaint with Mr Cosgrave.

Mr Cush said it was to be alleged that Mr Cosgrave then took a recording of the call and sent it to a number of Web Summit staff but had “heavily edited” it throughout so that portions of the transcript did not appear in the audio.