Maxter Catheters Sas and Another v Medicina Ltd
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Teare |
| Judgment Date | 30 October 2015 |
| Neutral Citation | [2015] EWHC 3076 (Comm) |
| Date | 30 October 2015 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: Medicina Limited |
[2015] EWHC 3076 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane, London EC4A 1NL
Mr. Justice Teare
Case No: Medicina Limited
Philp Moser QC and Nikolaus Grubeck (instructed by Greenberg Traurig Maher LLP) for the Claimants
Jonathan DC Turner (instructed by Taylors Solicitors) for the Defendant
Hearing date: 5 October 2015
This is another dispute as to where claims between parties should be heard. The Claimants wish the claims to be heard in England. The Defendant wishes the claims to be heard in France. The Defendant has issued an application seeking an order that the proceedings issued in England by the Claimants should be stayed. Any such stay is opposed by the Claimants.
The Claimants have also issued an application to amend its Claim Form. That application is opposed by the Defendant.
The background
The Claimants (two French companies) and the Defendant (an English company) are involved in the development, production and sale of medical devices such as syringes and feeding tubes. For some 10 years the parties were in an ongoing business relationship involving the production, distribution and certification of such medical devices. In late 2014 the Claimants were acquired by another company, Corpak. As a result of what the Claimants say were breaches of contract by the Defendant the relationship came to an end. The breakdown of that relationship has given rise to litigation in France and in England.
On 21 December 2014 Medicina France, a subsidiary of the Defendant, commenced proceedings against the Claimants in the Marseilles Commercial Court based upon Article L.442–6 of the French Commercial Code which imposes liability in tort for terminating a business relationship without reasonable notice, notwithstanding anything to the contrary in the contract. The proceedings commenced in December 2014 were an action en référé seeking emergency relief, in particular an order that the Claimants resume their business relationship with Medicina France. An order to that effect (ordering the Claimants to resume their business relationship for two months) was made on 10 February 2015. The evidence tendered by the Defendant to this court is to the effect that the action en référé is "finished" and not subject to appeal.
Also on 10 February 2015 Medicina France filed a motion before the Commercial Court in France seeking disclosure of documents in relation to an allegation of unfair competition. An order to that effect was granted on 17 February 2015. The evidence tendered by the Defendant is again to the effect that this proceeding is "finished".
On 19 March 2015 the Claimants issued the present proceedings in the English Commercial Court. The claim form alleged a repudiatory breach of contract by the Defendant which was accepted by the Claimants. Declaratory relief was sought, in particular, that the contract between the parties was governed by English law and subject to a non-exclusive jurisdiction clause in favour of the English courts, that the Claimants were entitled to cease to supply medical products to the Defendant and that the Claimants had no liability to the Defendant. The Claim Form was not served immediately.
On 30 March 2015 Medicina France commenced an action au fond against the Claimants before the Commercial Court in Marseilles in relation to the unlawful submission of a business partner to obligations creating a significant imbalance in the rights and obligations of the parties and also in relation to the unlawful termination of a contractual relationship without proper notice. The latter complaint was, like the action en référé, based upon Article L.442–6 of the French Commercial Code. However, there was unchallenged evidence from the Claimants' avocat that an action au fond and an action en référé are distinct and separate from one another. The action au fond concerns substantive proceedings on the merits which proceed to trial in the normal way, whereas the action en référé is a summary procedure most often used to prevent imminent harm, danger or unlawful activity. An action en référé does not become an action au fond. In the present case the action au fond is due for trial in February or March 2016.
I mention at this stage something which is not common ground but which is disputed. Evidence was adduced by the Defendant that on 13 March 2015 the Claimants' avocat called the Defendant's avocat and asked him not to serve the action au fond because she would be on holiday during the week 16–22 March 2015. The Defendant's avocat said that he acceded to that request and did not send the action au fond to the bailiff for service until 23 March 2015. It is further alleged that "in order to avoid litigating the case before the French jurisdiction" the Claimants "have organised the postponement of the service" of the action au fond "in order to prior seise the English court and then claim that the French Court should decline its jurisdiction". This serious allegation has been denied. The Claimants' avocat has said that she did not ask the Defendant's avocat to postpone service and was not aware of any intention by the Claimants to issue proceedings in England. There is a clear conflict of evidence. It is not possible for the court to resolve this matter on this application. It was raised for the first time on 1 October 2105, shortly before the hearing and long after the application to stay the English proceedings was issued on 11 August 2015.
On 17 April 2015 the Claimants served their Claim Form on the Defendant and on 20 April 2015 the Defendant acknowledged service. There was no challenge to the jurisdiction.
On 20 May 2015 the Claimants provided the Defendant with a proposed Amended Claim Form and with Particulars of Claim. The Amended Claim Form seeks, in addition to declaratory relief, the remedy of damages. Further, the remedy of damages is sought not only for breach of contract but also for passing off and conversion.
On 5 June 2015 Medicina France served a civil complaint seeking the enforcement of penalties granted by the Court on 10 February 2015 in the event that the Claimants did not resume their business relationship with Medicina France. It was accepted by counsel for the Defendant that this was a separate proceeding. That concession was consistent with the evidence that the action en référé commenced on 21 December 2014 was "finished".
Also on 5 June 2015 the Claimants issued an application to amend its Claim Form.
The submissions of counsel
Counsel for the Defendant made 4 submissions. First, he submitted that the sole purpose of the Claimants' proceedings in England was to frustrate the Defendant's proceedings in France and that they should therefore be stayed. Second, he submitted that it would not be just to grant the declarations sought by the Claimants and therefore the Claim Form issued and served by the Claimants seeking certain declarations should be stayed. Third, he submitted that pursuant to Article 30 of Regulation (EU) No 1215/2012 (to which I shall refer as the Judgments Regulation) the courts of France were first seised and that therefore the English court should stay the proceedings before it. Fourth, he submitted that the proposed Particulars of Claim have no real prospect of success and should be struck out.
Counsel for the Claimants submitted that permission to amend the Claim Form should be granted. He submitted that this court was the court first seised and that therefore this court had no discretion to stay the proceedings in this court pursuant to Article 30 of the Brussels Regulation. Finally, he submitted that the proceedings should not be stayed on any of the other grounds relied upon by the Defendant.
Abuse of process
It was submitted that the sole purpose of the English proceedings was to obstruct the French proceedings commenced by the Defendant in the Marseilles Commercial Court. This was said to be an illegitimate purpose with the result that proceedings should be stayed pursuant to the principles set out in JSC BTA Bank v Ablyazov [2011] 1 WLR 2996, especially at paragraphs 22–23.
The evidential basis of this submission is that in his witness statement Mr. Catterall, the solicitor acting for the Defendant, said at paragraph 10:
"It seems that the purpose of this claim was to obstruct the anticipated substantive proceedings in France under French law, instead of defending them in the French courts."
That evidence has not been denied.
In addition, reliance was placed on a letter dated 20 April 2015 in which the Defendant's solicitor asked the Claimants' solicitor why the proceedings had been issued. In response the Claimants' solicitors said in their letter dated 22 April 2015 that the English court was the court first seised and therefore that it was expected that the French court would stay the proceedings before it.
These matters support the case that at least one purpose of the Claimants in issuing proceedings in England was to cause the French court to stay the proceedings before it. However, the Claimants' solicitors also referred in their letter dated 22 April 2015 to the fact that the Claimants had made complaints of the Defendant's conduct. That must have been a reference to the matters upon which the Claimants relied to justify their termination of the relationship between the Claimants and the Defendant. The Claimants have a legitimate interest in establishing that their...
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