Frandsen & Ors v Bestnet Europe Ltd & Ors

A claim should not be struck out as vexatious or an abuse of process merely because related proceedings have been brought in several jurisdictions, where each proceeding is directed to a proper defendant or relevant conduct. Nor should a claim be struck out for lack of merit where resolving the issue requires detailed factual and expert examination. A failure to particularise allegations at an earlier stage does not justify striking out if the claim has been properly particularised before the strike-out application is heard. The court should not determine the ultimate merits on an interlocutory application.

The claimants brought proceedings for breach of confidence concerning an insecticidal net product developed by the defendants. The defendants included former employees of the claimants and companies associated with them. Related proceedings had been brought in Denmark, France and India.

The defendants applied to strike out the English action as vexatious and an abuse of process. They argued that the claimants had no case that the information was confidential or had been used, and that the claimants had acted oppressively by failing to identify their confidential information and allegations of misuse with sufficient particularity.

1. Application dismissed. The defendants had not established that the action was vexatious or an abuse of process.
2. The existence of proceedings in several jurisdictions was not, without more, vexatious or abusive. It was legitimate to sue a new corporate entity in its country of incorporation and to sue individuals who owned or controlled the relevant companies. It was also legitimate to proceed against a foreign manufacturer in the country where manufacture was carried out.
3. The court could not decide on the strike-out application that the claim was without merit. The final product differed from the claimants’ products, but the relevant question was whether the defendants had obtained an advantage through possessing and using the claimants’ confidential information. That issue required proper examination of the identified database entries and the competing expert evidence.
4. The court was not required to determine the rights or wrongs of the expert criticisms at this stage. The absence of a formal report from the claimants’ expert did not establish non-compliance with a court order, since the claimants had merely been given permission to serve such a report.
5. The claimants had initially failed to particularise their case adequately, and this had hampered the defendants. However, a failure to particularise properly at an earlier stage did not justify striking out where the claim had been properly particularised before the application was heard.
6. The court expressed no view on the ultimate merits. It also observed that much of the evidence placed before the court appeared unnecessary.