Les Laboratoires Servier & Anor v Apotex Inc. & Ors

Interest on a monetary award is assessed on a broad-brush basis. The court need not determine the recipient’s precise loss or the rate at which that particular recipient could have borrowed. It should consider the recipient’s general characteristics and the evidence of prevailing market conditions. The conventional commercial rate is base rate plus 1%, but the court may depart from it where the evidence justifies doing so. The reference rate should ordinarily reflect the currency of the award. Where the award is in sterling, a sterling interbank rate may be preferable to a euro rate.

The court had previously ordered Apotex to repay Servier £17.5 million, together with interest, following the order made by Norris J. The remaining issue was the appropriate rate of interest on that repayment and related costs.

Servier sought interest at EURIBOR plus 1%, alternatively LIBOR plus 1%. Apotex contended for base rate plus 1%, relying in part on Norris J’s earlier decision. The court therefore had to determine whether the conventional rate should be displaced and, if so, whether EURIBOR or LIBOR was the appropriate reference rate.

1. Disposition. Interest was awarded at three-month LIBOR plus 1%. Servier recovered 50% of its costs incurred since 7 April 2011.
2. The assessment of interest is a broad-brush exercise. It is neither practical nor proportionate to calculate precisely what would compensate the recipient, and the court does not generally ask at what rate that particular recipient could have borrowed. It may, however, consider the recipient’s general characteristics and categorise the recipient objectively when selecting a fair rate. These principles were drawn from Fiona Trust & Holding Corporation v Primalov [2011] EWHC 644 (Comm), including its discussion of Jaura v Ahmed [2002] EWCA Civ 210.
3. Base rate plus 1% is the conventional rate in commercial cases. The court may depart from it where sufficient evidence demonstrates that another rate is more appropriate. The issue is evidence-sensitive and depends on the relevant period and market conditions.
4. Norris J’s earlier selection of base rate plus 1% was based on the evidence, or lack of evidence, available in November 2008. It did not determine the rate on the materially different evidence concerning the period after that date.
5. The evidence showed that commercial interbank rates better reflected the likely borrowing reference rate for a company in Servier’s position, particularly given divergences between interbank rates and Bank of England base rates. Since the award was in sterling, LIBOR was appropriate; EURIBOR was a euro rate and there was no EURIBOR sterling rate.
6. Servier had substantially succeeded on the rate issue, but its abandonment of claims for compound interest and a 2% margin justified limiting its recovery to 50% of the relevant costs.

The judgment followed an earlier order requiring repayment of £17.5 million. It also considered the earlier interest decision of Norris J in [2009] EWHC 3289 (Pat) and the court’s prior judgment in the same litigation, [2011] EWHC 730 (Pat).