Actial Farmaceutica LDA v Professor De Simone & Ors

Judgments Regulation 44/2001 Article 5(3) is a narrow exception to the basic rule that a defendant is sued where domiciled. It requires a particularly close connection between the dispute and the proposed forum. The relevant place is where the jurisdictionally significant harm directly affects the immediate victim and is closest in causal proximity to the harmful event. In a supply-chain tort, non-delivery at an intermediate packaging location may constitute the direct harm. Later inability to supply downstream distributors and resulting market loss are consequential damage. A claimant’s largest market, or sales of a rival product there, does not relocate the harm.

Actial claimed damages against an Italian professor and an Italian company for unlawful means conspiracy and unlawful interference with its business. It alleged that supplies of VSL#3 had been cut off at source, preventing delivery to packaging agents in Italy and the Netherlands and later preventing supplies to its United Kingdom distributor.

The Deputy High Court Judge held that the English courts lacked jurisdiction under Article 5(3) of the Judgments Regulation 44/2001 and the Lugano Convention 2007: [2015] EWHC 836 (Ch). Actial appealed. The central issue was the place where the harmful event occurred or the direct damage was suffered.

Appeal dismissed. Flaux LJ gave the judgment, with which Christopher Clarke LJ and Lewison LJ agreed.

1. Article 5(3) of the Judgments Regulation 44/2001 is an exceptional derogation from the domicile rule in Article 2 and must be interpreted restrictively. It requires a particularly close connecting factor between the dispute and the proposed forum. The inquiry is directed to the jurisdictionally significant harm, namely the damage closest in causal proximity to the harmful event. It is not a forum conveniens test. The same analysis applied to the invoked provision of the Lugano Convention 2007. The court relied on the principles collected in AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH [2014] EWCA Civ 143 and related authorities.
2. The alleged harmful event was the conspiracy to prevent Actial trading by cutting off supplies. The jurisdictionally significant damage was the non-delivery of bulk VSL#3 to Actial’s packaging agents in Italy or the Netherlands. The later inability to supply distributors, including Ferring UK, was consequential or indirect damage. The judge’s analysis was correct.
3. The carriage cases provided an analogy. Whether the product was stolen, lost, or withheld on instructions, the relevant harm occurred where it was not delivered to the packaging agent. The counterfactual inquiry confirmed that, absent the tort, the agents would have received the product for packaging and onward transmission. Identifying that location also satisfied foreseeability and certainty.
4. Shevill v Press Alliance SA [1995] 2 AC 18 was distinguishable. International libel involves injury at each place of distribution, with the harmful event and injury occurring there simultaneously. Here, direct damage occurred earlier at the packaging locations. The United Kingdom’s market share and the alleged distribution of Vivomixx did not alter that conclusion.
5. The alternative Article 5(1) argument was not determined because the appeal was disposed of under Article 5(3). The court followed the caution in Housden v The Conservators of Wimbledon and Putney Commons [2008] EWCA Civ 200 against deciding unnecessary issues.

• Court of Appeal (Civil Division): dismissed Actial’s appeal, holding that the English courts lacked jurisdiction under Article 5(3) of the Judgments Regulation 44/2001 and the Lugano Convention 2007.
• High Court, Chancery Division: the Deputy High Court Judge held that the English courts lacked jurisdiction over the tort claims: [2015] EWHC 836 (Ch).