An Irish company, Biomass Heating Solutions Ltd (BHSL), which creates equipment to turn chicken waste into energy for poultry farms, was not obligated to adhere to general contract terms and conditions set by a Dutch supplier, the High Court determined. This ruling is a result of BHSL alleging that the Dutch company, Geurts International BV of Leiden, delivered defective parts necessary for their manufacturing process.
BHSL’s innovative equipment operates by incinerating poultry manure which is converted into hot water or steam, providing heat to farms or producing electricity. They incorporated heat exchange systems procured from Geurts International into the equipment units they sold to farms across the UK.
BHSL claimed faults in the Dutch company’s heat exchange systems around December 2016. The Irish company spent around €2.6 million repairing the faults which included covering third-party contractor fees, replacing or adding parts, staff expenses and customer claims against BHSL. The company also projected a loss of around €1 million in profits.
Geurts International refuted these allegations and launched a lawsuit against BHSL in the Netherlands, seeking approximately €1 million they believed the Irish company owed. However, the Dutch court declined to preside over the case.
As the case reached the Irish High Court, the initial focus was to determine if Geurts’ general contract terms pertained to this situation, specifically those related to liability exclusion and limitation clauses. While Geurts asserted they did, BHSL disagreed.
During the judgement, Mr Justice Denis McDonald clarified that although there were several individual contracts between the two parties, none necessitated adherence to the defendant’s general terms. The case was suspended and will resume later this month to discuss costs and other issues. A hearing for the main trial is also expected to be arranged.