Jamp Pharma Corporation v Unichem Laboratories Ltd
| Jurisdiction | England & Wales |
| Judge | Sir Ross Cranston |
| Judgment Date | 23 June 2021 |
| Neutral Citation | [2021] EWHC 1712 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Claim No: CL-2019-000719 |
| Date | 23 June 2021 |
[2021] EWHC 1712 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF
ENGLAND AND WALES
COMMERCIAL COURT (QBD)
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Ross Cranston
Sitting as a Judge of the High Court
Claim No: CL-2019-000719
Guy Morpuss QC and David Lowe (instructed by Macfarlanes LLP) for the Claimant
Andrew Thomas (instructed by Armstrong Teasdale Limited) for the Defendant
Hearing dates: 4, 5, 6, 10 May 2021
Approved Judgment
INTRODUCTION
The main issue in this case is whether the claimant, Jamp Pharma Corporation (“Jamp”), entered a legally binding agreement for Unichem Laboratories Limited (“Unichem”) to supply it with Tizanidine, a muscle relaxant drug, for the Canadian market. Jamp is a company incorporated in Canada, where it manufactures and distributes pharmaceutical products. Unichem is an Indian pharmaceutical company, which develops and manufactures a range of pharmaceutical products and licenses their sale and distribution worldwide.
The parties had entered an agreement in early 2019 under which Unichem supplied another drug to Jamp, Alfuzosin, as the Canadian distributor. That agreement contemplated the supply of additional products. Jamp's case is that in April/May 2019 Jamp and Unichem reached a legally binding agreement for the supply of Tizanidine as well as Alfuzosin. It was not an agreement “subject to contract”. Unichem's case is that a legally binding agreement was conditional upon the terms being set out in a formal addendum signed by both parties. The parties negotiated an addendum, which was reduced to writing, but Unichem never signed it.
During the trial I heard evidence remotely because of the Covid pandemic. For Jamp there was evidence from Mr Sukhad Juneja, vice-president of portfolio management & scientific affairs, and Ms Sophie Jacques, director of marketing and communications, both based in Canada. For Unichem there was evidence from Mr Santosh Mahil, chief commercial and international business development officer, and Ms Pragati Shetty, the associate general manager, international business, both based in India. These four factual witnesses all gave credible evidence and tried to assist the court. On the whole their evidence was consistent with that given by the others. It transpired that the differences between them were on relatively minor matters which were not central to the issues in the case which needed resolution.
There was also expert evidence from Dr Andrew Tepperman, for Jamp, and Professor W. Kilgallon (the industry expert) and Mr Gordon Hodgen (the accounting expert) for Unichem. The experts were called in relation to the quantum of damages for breach should there be a binding contract between Jamp and Unichem as Jamp asserted. Both experts tried to assist the court, although there were limitations in the evidence of both Dr Tepperman and Professor Kilgallon since their expertise did not extend to all the matters in issue.
BACKGROUND FACTS
The Agreement
The background to the dealings between the parties over Tizanidine was the contract entitled “Product Dossier, Supply and Distribution Agreement” (“the Agreement”), entered in early 2019 after a period of many months' negotiation. Its recitals stated that the parties wished to enter it, among other matters, (i) to have through Jamp what were referred to in the Agreement as the “Products” approved by Health Canada, the government agency responsible for marketing approvals for pharmaceuticals in that country; (ii) to provide for the manufacture and supply of the Products by Unichem to Jamp; and (iii) to authorize Jamp to distribute the Products in Canada on an exclusive basis.
Article 1 of the Agreement covered the provision of a product dossier to Jamp, in return for a fee, and for its responsibility for obtaining the marketing approvals from Health Canada. Article 1.1 conferred on Jamp the exclusive right to register, manufacture, market, distribute and sell the Products in Canada. Article 1.9 of the Agreement stated:
“1.9 Products: For the purposes of the agreement, Products shall initially mean the products set forth in Annexure 1. Thereafter, the Parties may by mutual consent expressed in writing add any product to Annexure 1.”
Annexure 1 to the Agreement identified only one product, Alfuzosin. It was to be supplied in tablets of 10mg strength, a pack size of 100, and a batch size of 700,000. The purchase price was CAD $4.00 per unit, and the fee payable on approval was CAD $50,000.
By article 2.1 the Agreement was to be effective from 18 December 2018 and was to continue on a product-by-product basis for ten years from the date on which Jamp received notification of compliance from Health Canada approving a drug for sale on the Canadian market.
Article 3 dealt with the supply, packaging and delivery of the products. Articles 3.1 and 3.2 dealt with the exclusive purchase and supply of the products in Canada. Article 3.2 read:
“3.2 Exclusive Supply of Products in Canada: Unichem shall not during the Initial Term and any Subsequent Term directly or indirectly sell, either by itself or through other Persons, the Products for resale in Canada, or licence or otherwise grant rights in the Product Dossiers with a view to sale of any Products in Canada. …”.
Article 3.7 covered storing and shipment, article 3.10 making Unichem's delivery obligation ex works. The purchase price was laid down in article 4.1 and Annexure 1. It was to remain fixed during the initial period for a product.
The Agreement contained an entire agreement clause (article 11.8). Article 11.9 stated, in part:
“11.9 Amendment/Waiver/Remedies: This Agreement may not be amended, nor any provision waived, except by written instrument.”
Article 11.12 laid down the laws of England and Wales as the governing law and conferred exclusive jurisdiction for disputes on the courts of London.
The Agreement was signed by Mr Louis Pilon, president and CEO of Jamp, on 28 January 2019, and there were two signatories for Unichem, Mr Mahil and Mr Dilip Kunkolienkar, on 20 February 2019.
Negotiations for Tizanidine
The Agreement covered only one product, Alfuzosin. In the course of the negotiation of the Agreement, included in an email from Unichem of 31 August 2018 was “the offer for the below interested products”. The email set out details in tabular form for Meloxicam, Memantine and Tizanidine. As regards Tizanidine the details were strength 4mg, batch size 1.5 million, pack size (in bottles) of 150 or 1000, with a purchase price of CAD $6.00 or CAD $32.80, and with a dossier fee of CAD $100,000, payable 25% upon signing of the agreement, 25% upon filing of the marketing authorization application, and 50% upon approval.
Around six months later, on 15 March 2019, following the signature of the Agreement, Mr Nishank Gohel, a business development manager at Jamp working under Mr Juneja's supervision, emailed Ms Shetty of Unichem that Jamp had had Tizanidine tablets in its wish list earlier and had received Unichem's proposal for the “project”. The email continued that the project had been on hold, but Jamp was now ready to move ahead, so accordingly “kindly note our counter offer for the project as below”. There followed the details in the same tabular form as in the Unichem email the previous year, labelled “Unichem's offer”, with “Jamp's offer” added as follows: “Counter offer, (CAD) $2.6 for pack of 100 [and] licensing fees CAD $70,000”. The email concluded: “Request you to review and let us have your feedback to proceed further with Amendment and conclude.”
Unichem's response was in an email from Ms Shetty dated 27 March 2019, called “our revised offer”. Details were for the same strength, but with a pack size (bottle) of 100 tablets, at a transfer price CAD $3.20, and a licensing fee of CAD $100,000. The milestones for the payment of that licensing fee were
“25% Upon signing off an addendum”,
% upon filing of an abbreviated new drug submission (“ANDS”) with Health Canada, and 25% upon approval of the ANDS. The email concluded that Unichem looked forward to receiving “the draft addendum to proceed in this project”.
Jamp replied the same day, 27 March 2019, thanking Unichem for “your counter offer”, stating that it would evaluate it and revert within the week for finalization.
An internal email within Jamp dated 27 March 2019 contained evidence of Jamp's inhouse evaluation for Tizanidine. It set out a snapshot of calculations in what was called within the organisation a “Green table”. Overall, with the lowest available price charged by AA Pharma, another Canadian pharmaceutical company distributing Tizanidine in Canada, Jamp would make a gross margin of 90.45 percent inclusive of freight costs. The Green table calculations assumed a lack of competitors. It contained a transfer price per tablet of CAD $0.0352, a dossier price of CAD $100,000 and a lowest available price (in the province of Quebec) of CAD $0.386.
The Green table contained forecast sales of 702,451 tablets in year 1; 936,575 in year 2; and 1,130,759 in year 3. In his first witness statement Mr Juneja stated that these represented 7, 10 and 12 percent of the market over the first three years. It was common ground at the hearing that these forecasts actually represented 15, 20, and 25 percent of the market over that period. In making that correction in his second witness statement, Mr Juneja explained that Jamp used standard market share estimates, for example 3, 5, and 7...
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Markel Bermuda Ltd v Caesars Entertainment, Inc.
...into legal relations). In relation to contract formation CEI also refers to what was said by Sir Ross Cranston, in Jamp Pharma Corporation v Unichem Laboratories Limited [2021] EWHC 1712 (Comm) at [53] and following: “53. First, an offer may be conditioned on its acceptance being expressed......