Atrium Medical Corporation & Anor v DSB Invest Holding SA

On an application to amend pleadings, permission should be granted where the proposed case is sufficiently clear and has a real prospect of success, even though the court cannot finally determine the underlying contractual issue at that stage. Where the amendment advances a positive case, the applicant may be required to state that case clearly before evidence is exchanged. An allegation that is confusing, obscure, or unsupported by a coherent construction of the agreement should not be permitted.

The claim concerned a technology purchase and sale agreement under which DSB transferred technology relating to biological fatty-acid coatings for implantable medical devices. Atrium sought permission to amend its particulars of claim concerning the scope of the transferred Technology and its contention that the Technology was not used in its C-QUR products.

The proposed amendments alleged that the Technology comprised only technology owned by DSB, only formulations and fabrication methods supplied by DSB, or only information protected by confidentiality principles. The application required the court to decide whether the proposed allegations were arguable and sufficiently clear to be pleaded.

1. Proposed sub-paragraph (1). The recital stating that DSB owned the Technology raised an issue of contractual interpretation. Although the proposed construction appeared unlikely to succeed, it could not be said to have no real prospect of success. Permission to amend was therefore appropriate. If Atrium intended to advance a positive case connected with the allegation, it had to provide DSB with a statement of that case before the exchange of evidence.
2. Proposed sub-paragraph (2). The allegation that the Technology was confined to formulations and fabrication methods provided by DSB was sufficiently clear. Atrium was nevertheless required to set out any positive case explaining why the Technology did not extend to the broader idea of implantable medical devices coated with biological oils, including fish oil and olive oil, to reduce the inflammatory response.
3. Proposed sub-paragraph (3). This allegation was confusing and obscure. The explanation given in argument could not cure the lack of clarity in the proposed pleading. The court also found no apparent basis for construing the agreement as extending only to information that would be capable of protection under English law of confidential information. Permission to introduce this sub-paragraph was refused.
4. The amendment was allowed in relation to sub-paragraphs (1) and (2), subject to the required statements of case. The costs of the rest of the hearing were to be costs in the case.