Irish Ferries has brought a High Court challenge over a finding that it must pay compensation to thousands of passengers affected by the cancellation of sailings between Ireland and France last summer.

The company says it had to cancel the services because a new ferry it had ordered, the WB Yeats, to operate the service between Dublin and Cherbourg was delayed for several months.

The challenge has been brought against the National Transport Authority's decision in January that arising out of the cancellations the company breached EU regulations concerning the rights of passengers travelling by sea.

The NTA issued the company with two notices requiring Irish Ferries to pay compensation to impacted passengers within a period of two months.

The notices direct the company to pay compensation to passengers impacted by the cancellations who had to travel from Rosslare instead of Dublin, and from Roscoff instead of Cherbourg.

The notices also state passengers who were delayed in reaching their final destination who have already requested compensation from the company must also be paid compensation.

Non-compliance with the notices is an offence, with a maximum fine on conviction of €250,000.

The company dispute's the NTA's finding and says it and the notices are invalid, irrational, in breach of its Constitutional Rights and EU rights.

Irish Ferries also says the NTA has misinterpreted the relevant EU regulations.

The cancellations occurred because a new ship it had commissioned from the German shipyard Flensburger Schiffbau-Gesellschaft was delivered some "200 days" late, Irish Ferry's counsel Paul Gallagher SC told the High Court.

Counsel said the delay came as a shock to Irish Ferries and made headlines in the media.

Counsel said the company took steps including offering "an immediate no quibble reimbursement in full" to affected customers, offered vouchers for €150, as well as "the opportunity to rebook on alternative sailings of their choosing."

Some 5,700 bookings were affected by the cancellations.

Counsel said the majority of affected passengers, some 82%, chose to travel on alternative sailings to France with Irish Ferries.

The remainder either cancelled and accepted a refund or chose to travel by landbridge through the UK, and were compensated by Irish Ferries for the fuel expended while crossing Britain.

Counsel said that his client is concerned about the long-term implications of the NTA's decision.

The situation Irish Ferries found itself in was extraordinary, was not of its own making, and it was unable to secure another ferry to operate the planned sailings, counsel said.

All affected passengers, counsel said, were informed of the situation a minimum of seven weeks before the proposed sailing, he added.

In its judicial review action, Irish Ferries seeks various orders including one quashing the NTA's decision and the notices it issued to the company.

It also seeks various declarations from the court including that the NTA's decision and the notices are invalid, are irrational and are without any legal basis.

The further seeks declarations including that the decision and the notices fly in the face of common sense, take into account irrelevant considerations, and are disproportionate.

Permission to bring the challenge was granted, on an ex parte basis, by Mr Justice Seamus Noonan, who also placed a stay on the notices from coming into effect.

The judge made the matter returnable to a date in May.