Company hit by $1.7m US court order

Company hit by $1.7m US court order

A KILLYLEAGH firm which has been one of the district's major success stories could be forced out of business.
The Strangford Lough Brewing Company faces an uncertain future after an American court imposed a $1.7m penalty on its managing director Mr. Tony Davies.
The local firm produces a range of Irish beers named after historical characters and the Killyleagh company has been actively targeting the North American market.
Formed in 2004, it sells licences, distribution and manufacturing rights for its range of beers and also provides brewers with the raw ingredients and equipment they require.
But a problem developed with the Palouse Falls brewery in Washington whose owners questioned the authenticity of the recipe used by the Strangford Lough Brewing Company (SLBC).
It argued the Killyleagh firm wasn't Irish and expressed concern about the standard of equipment it had been supplied with which led to production delays. The US brewer was also concerned there was no plant in Ireland manufacturing the raw ingredients used to brew the beer and that German, not Irish shamrock, was used in the recipe.
As a result, it instigated court proceedings and was awarded $1.4m dollars in lost productivity and profits for a projected five year term, with Mr. Davies also ordered to pay legal fees and costs of almost $238,000 dollars.
The legal case resulted in 10 people losing their jobs and has left Mr. Davies battling to survive and keep the Killyleagh company afloat. He revealed his company ran out of money defending the court case in the US, claiming that in the end "financial strength overcame justice." He said the case against his firm includes a "number of untruths."
Mr. Davies also confirmed his company has an outstanding court case registered in the High Court in Belfast against Palouse Falls over an alleged breach of copyright.
The Killyleagh businessman explained the initial dispute with Palouse Falls arose as a result of his company being late with delivering a brewery. He said problems also developed with a bottle capping system, with SLBC installing more advanced equipment which failed to work.
He continued: "The court case that followed was a prime example of the litigative nature of the USA. This wasn't about seeking rightful damages but about maximising the opportunity."
Mr. Davies argued the court case in the US contained a "number of untruths," including that SLBC was not Irish and that there are no historic beer recipes.
"These were combined with other things which SLBC representatives are supposed to have said, all of which were denied. Why would SLBC have told them that all the ingredients were Irish when many of them, such as hops are not grown here?<\!p>
"SLBC denied these claims in writing and I gave an affidavit in the US and entered into arbitration by going to Washington. In the end, we ran out of money defending this case and all of these incorrect assumptions were entered into the case as a matter of record. Financial strength overcame justice."
Mr. Davies confirmed he had never met representatives from Palouse Falls until legal proceedings commenced, explaining previous dealings with the US brewer were handled by his former business partner Bob Little.
He added: "Being the Managing Director has its responsibilities. It seems unjust though that what is a dispute between limited companies can be turned into such a personal attack."