Secretary of State for Health & Ors v Servier Laboratories Ltd & Ors

A national court must avoid deciding EU competition issues in a way that may conflict with proceedings initiated by the Commission. That obligation does not automatically require a stay until the Commission reaches a final decision or all appeals end. The court must balance the risk of conflicting decisions, wasted costs and unfair duplication against delay and evidential prejudice. An immediate stay may be justified while a party responds to a Statement of Objections and prepares for an oral hearing. The stay should then end promptly if independent domestic claims and evidential considerations make further delay disproportionate.

The claimants, public health authorities within the English National Health Service, brought proceedings concerning Servier’s conduct relating to Perindopril. The claims alleged infringements of Articles 101 and 102 TFEU and tortious interference with economic interests by unlawful means. The European Commission had opened an investigation concerning overlapping conduct and subsequently issued a Statement of Objections.

Servier applied for an immediate stay. The claimants accepted that trial should await the Commission’s investigation and any resulting European litigation, but sought directions for disclosure and further information meanwhile. The central issue was the appropriate duration and scope of any stay.

1. Stay ordered. The proceedings were stayed until shortly after the conclusion of the Commission’s oral hearing. Servier would otherwise face an unfair burden in conducting substantial parallel proceedings during the intensive period following service of the Statement of Objections. The approach in MTV Europe v BMG Records (UK) Ltd [1995] 1 CMLR 437, as approved on appeal, supported recognising that division of effort.
2. The obligation under article 16.1 of the Council Regulation (EC) No 1/2003 was to avoid a national decision conflicting with a Commission decision contemplated in proceedings already initiated. It did not require a stay until the Commission’s final decision. Case management remained governed by the overriding objective, including proportionality, fairness, expense and expedition, as illustrated by National Grid Electricity Transmission Plc v ABB Ltd [2009] EWHC 1326 (Ch).
3. The stay should not continue for more than about 14 days after the oral hearing. The action had already been delayed since events between 2001 and 2007. The English tort claims were legally independent of the EU competition claims and could remain relevant whatever the Commission decided. Early disclosure was therefore important, although disclosure concerning confidential Commission material and uncertain EU issues might require later adjustment.
4. The French Blocking Statute did not justify a longer stay or the use of the Regulation 1206/2001 procedure. Following The Heidberg [1993] I.L.Pr.718, Morris v Banque Arabe et Internationale d’Investissement SA [2001] I.L.Pr.37 and Elmo-Tech Ltd v Guidance Ltd [2011] EWHC 98 (Pat), the risk of prosecution for compliance with English disclosure orders was theoretical. Christopher X was exceptional because it involved deceptive, unilateral evidence-gathering without court-order protection.
5. Servier was directed to provide formal answers to the outstanding Part 18 requests. The stay did not prevent procedural steps already in contemplation or the provision of further information.