Takeda Pharmaceutical Company Ltd v Fougera Sweden Holding 2 AB

Applications for expedition and preliminary-issue trials are practical case-management decisions governed by the overriding objective. The court must weigh the reason for expedition, disruption to court administration and other court users, prejudice to each party, and any special circumstances.

A preliminary issue is appropriate where it is clearly separable, may dispose of the case or materially reduce the evidence and costs, and will not unfairly fetter the parties or the court. The court should select the course most likely to achieve an orderly and fair resolution while minimising prejudice and disproportionate disruption.

The claimant sought an expedited trial of its claim that the defendant was contractually or otherwise obliged to provide information concerning potential Danish withholding-tax liability under a share purchase agreement and a later letter agreement.

The escrow securing the alleged liability was due to expire on 30 September 2017. The claimant sought a full trial before that date. The defendant proposed a preliminary trial on the existence of the alleged duties, with the escrow continuing if the duties were established. The court therefore had to determine the appropriate case-management directions, balancing urgency, trial practicality, costs, prejudice and the effect on court resources.

1. The application for a full expedited trial before the escrow expiry date was not granted. The court directed a trial of the preliminary issue concerning the existence of the alleged express or implied duties in July 2017, with the escrow sums to remain in place if the defendant was found to owe a relevant duty.

2. When deciding whether to expedite a trial, the court must consider practical factors, including the reason for expedition, the inevitable interference with the administration of justice and other court users, prejudice to either party, and any special factors. The overriding objective requires the overall management of the case to achieve justice at proportionate cost.

3. A preliminary issue was suitable because its determination could dispose of the claim, substantially reduce disclosure and evidence, and was primarily a question of law and construction based on a relatively narrow factual matrix. It was not irrelevant, did not require agreed facts, and would not unreasonably fetter either party or the court.

4. The court recognised the risks identified in Steel v Steel, including the possibility that a preliminary issue may create delay or additional expense. In this case those risks were outweighed by the separability of the duty issue and the defendant’s legitimate interest in knowing whether it had an opportunity to comply before the cut-off date.

5. A full trial in July was impractical and would cause substantial disruption. A full trial in November would also disrupt the court lists while resolving no issue before the cut-off date. The selected directions best maximised the prospects of an orderly and fair resolution and minimised prejudice to the parties and the administration of justice.

Not an appeal. The judgment records no prior decision in the same proceedings.