Actial Farmaceutica LDA v De Simone

When considering interim relief pending appeal, the court must compare the risk of injustice if relief is wrongly refused with the risk if it is wrongly granted. Mandatory relief may involve greater risk, but does not create a separate requirement for a high degree of assurance. An undertaking concerning supplied goods must be construed in context. It may prohibit interception, reverse engineering or modification of those goods without preventing development of an independent replacement product. Under Civil Procedure Rules 1998 r 6.15(2), alternative service may be ordered where the respondent knows of the application, indicates non-compliance and service under the Hague Convention would seriously undermine the order. Delay alone is insufficient. Both appeals were dismissed.

The appeals arose from litigation concerning the supply and distribution of the probiotic product VSL#3. The High Court made a mandatory interim order requiring the Professor to instruct the manufacturer to supply bulk product so that Actial could fulfil an order from its distributor. It later ordered, under Civil Procedure Rules 1998 r 6.15(2), that a committal application be treated as served through the Professor’s English solicitors rather than under the Hague Convention.

The Professor argued that fresh evidence showed breaches of undertakings and misleading conduct, that the mandatory order was unjustified, that an alternative waiver route was available, and that substituted service was improper. The central issues were whether either order should be set aside.

Kitchin LJ gave the judgment, with which Ryder and Jackson LJJ agreed.

1. The fresh evidence did not establish that Actial had breached its undertakings or deliberately misled the court. The undertakings were directed to preventing interception of the bulk product and reverse engineering or modification of the finished product supplied under the relevant orders. Read in context, they did not prevent Actial from developing an independent replacement product, provided that it did not do so by intercepting or reproducing or modifying the supplied product. The evidence did not establish that Actial had acted, or threatened to act, in breach.

2. The principles stated in Novartis AG v Hospira UK Limited [2013] EWCA Civ 583, [2014] RPC 3 were of general application. Although a mandatory order may carry a greater risk of injustice if wrongly made, the critical question remained the comparative risk of injustice if relief were wrongly refused or granted. Nottingham Building Society v Euro Dynamics Systems [1993] FSR 468 did not impose a separate high-assurance test. The deputy judge had properly considered the evidence, the cloning and public-health risks, the waiver route, the size of the order, and the undertakings and security. He made no error of principle. The waiver route did not eliminate the risk of irremediable prejudice if Mendes Switzerland was controlled by the Professor.

3. As to substituted service, the judge was entitled to find a good or possibly exceptional reason under Civil Procedure Rules 1998 r 6.15(2). Delay alone was insufficient, and the Convention was not being subverted. The Professor knew of the committal application, had indicated that he would not comply with the underlying order, and service under the Convention would seriously undermine its effectiveness. There was no suggestion that the order contravened Swiss law, and the Professor’s ability to defend the application was not impaired. Knauf UK GmbH v British Gypsum Ltd [2002] 1 WLR 907 did not require a different result.

4. The appeals against both the May order and the June order were dismissed.

1. Court of Appeal (Civil Division) — On 6 August 2015, dismissed the appeals against the mandatory interim order and the substituted-service order.
2. High Court of Justice, Chancery Division — A deputy judge made the mandatory order on 7 May 2015. Asplin J made the substituted-service order on 8 June 2015 under Civil Procedure Rules 1998 r 6.15(2).