England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Rolls Building, 7 Rolls Buildings Fetter Lane, London EC4A 1NL
		15/06/2016

Mr Justice Mann :

Introduction

1. These are applications which originally took a number of jurisdictional points in relation to a dispute between the claimants and the defendants in which the former claim that the latter have misused the former's confidential information. There are already proceedings in Germany involving some of the same parties and the essence of the complaint of the defendants is that they should not be sued in this jurisdiction while the German proceedings are pending, or at least not yet.
2. The first claimant is, or claims to be, the assignee of rights to information about the manufacture of cement used in orthopaedic operations. The cement includes an antibiotic, so regulatory approval is needed for its use. The second claimant distributes Heraeus bone cements in the UK. Where it is unnecessary to distinguish between them I shall call them simply "Heraeus".
3. The defendants are all companies in the Biomet group. The first and second defendants ("the UK Biomet defendants") distribute, amongst other things, bone cement products in the UK. The third defendant ("Biomet BV") is a Dutch company which is said to control the activities of the Biomet group in the EU and the fourth defendant ("Biomet Inc") is a company incorporated in Indiana which is or was at the time the parent company of the Biomet group and it is said by the claimants that it controls and procures the acts of the defendants which are complained of in these proceedings. I shall call the third and fourth defendants "the Foreign Biomet defendants".
4. In the next section of this judgment I set out a chronology of the procedural events which have brought about the applications which are before me but an outline of the destination may assist an understanding of the narrative of the journey. Putting the matter very shortly, the claimants have been successful in proceedings in Germany in establishing misuse of their trade secrets after an appeal. An application by the relevant defendants (including the Foreign Biomet defendants) for permission to appeal is pending. There is an issue in those proceedings as to whether or not the relief granted, which includes injunctive relief restraining manufacture and distribution, extends to acts in the UK or is confined to Germany. As at the start of the hearing before me that had not yet been resolved in Germany, and resolution was not expected immediately. Presumably in anticipation of possible failure on that point, the claimants have started these English proceedings. The proceedings again claim misuse of trade secrets. The UK Biomet defendants have been served under the CPR in the normal way. Biomet BV has been served (or purportedly served) without leave pursuant to CPR 6.33, and there is a challenge to the propriety of that service. Biomet Inc has been served out of the jurisdiction in Indiana pursuant to an application for permission to serve out of the jurisdiction, and Biomet Inc seeks to set aside that service on the grounds of non-disclosure and proper forum. The claimants resist those attacks on service and mount an alternative case for renewal of permission to serve out so far as may be necessary. As a more overall matter, the defendants say that the current English proceedings should be stayed pending final disposal of the German proceedings, and have in the wings a possible case that these English proceedings should be struck out as contravening the provisions of the Recast Brussels Regulation (No 1215/2012).
5. On the third day of the hearing before me news came through from Germany that the claimants had apparently lost their claim that the German relief covered outside-Germany activities. That led the parties to agree the temporary fate of some of the applications before me, but not all. The Foreign Biomet defendants still pursued their applications to set aside service of these English proceedings on them. That is the point with which this judgment deals.
6. At the hearing before me the claimants made submissions through Mr Moody-Stuart QC; the defendants made their submissions through Miss Camilla Bingham QC.

Chronology and factual background

7. The details of the underlying dispute do not matter much for the purposes of the applications before me. A generalised description suffices, though how the claims are put as against the various defendants is relevant.
8. As appears above, the claimants are manufacturers and distributers of orthopaedic cement. Another company in the group, Heraeus Kulzer GmbH has, or claimed to have, trade secrets in relation to one particular cement and provided them to Merck KGaA for the purpose of the latter obtaining regulatory approvals. In 1996 those two companies and Biomet Inc entered into a project to develop new systems and in that context trade secrets were disclosed to Biomet Inc under what is said to have been an obligation of confidentiality. Merck KGaA and Biomet Inc entered into a joint venture which resulted in the incorporation of Biomet BV, but in due course Merck fell out of the picture and transferred its interests to Biomet Inc. Further trade secrets are said to have been disclosed in the course of a continuing relationship. In due course Heraeus Kulzer assigned its interests to the first claimant, though it is still the claimant in the German proceedings referred to below.
9. The central claim of the claimants is that Biomet misused its trade secrets in manufacturing and distributing a competing product. In September 2005 Heraeus started proceedings against various Biomet entities throughout Europe and on 30 December 2008 proceedings were started in the German court in Darmstadt against various Biomet companies, including the Foreign Biomet defendants (but not including the UK Biomet defendants). I shall have to set out some of the detail of how that claim is put later. For present purposes it is sufficient to say that it claims damages, profits and a form of injunction restraining manufacture and distribution of cements made using what were said to be Heraeus' trade secrets. On 20th December 2012 the court at Darmstadt rejected Heraeus' claim. Putting the matter shortly, it held that some of the alleged trade secrets were in fact publicly known, and another had lost its confidentiality pursuant to a particular 5 year confidentiality term in an agreement between the parties. Heraeus appealed and on 5th June 2014 the court at Frankfurt ("the OLG") allowed the appeal and ordered relief including relief of the nature that I have just described. The relief was granted against, inter alia, the Foreign Biomet defendants. The defendants in those proceedings have sought permission to appeal further, and their application for permission is currently pending. It is thought that the application for permission to appeal will be determined sometime in or after late June of this year. If permission is granted then the final appeal might not be determined until as late as 2019.
10. In the meanwhile an issue has arisen as to the territorial scope of the Frankfurt court judgment. Heraeus says that it covers acts both inside and outside Germany (and therefore in the UK). The Biomet group does not take that view. It has moved manufacturing to a factory outside France (though it says that is coincidental and had been planned before the judgment) and has continued to sell its cement outside Germany, though it has stopped selling in Germany. The group is selling in the UK, for which activities the UK Biomet defendants are said to be directly responsible.
11. Whether that is permissible has been raised in two other sets of proceedings in Germany. On 4th August 2014 the Biomet defendants filed a negative declaratory action in a Frankfurt court, seeking a determination that the OLG judgment did not cover acts outside Germany. On 22nd April 2015 that court held that the action was "inadmissible" because the point was one for the appeal court. That decision was itself the subject of an appeal to the OLG, which was heard on 28th April (during the hearing of the applications before me). A result was not expected for some time, but on 28th April news came through that an indication had been given that the defendants would succeed in their application, that is to say it was determined that the German relief did not cover acts outside Germany. On the footing that that indication would be followed up by a decision to the same effect the parties agreed at least the temporary fate of some of the applications before me but not those relating to service.
12. Almost in parallel with that the point has arisen in enforcement proceedings. Heraeus has applied to the court in Darmstadt for relief enforcing its judgment in jurisdictions other than Germany. The point is opposed there by the Biomet defendants. Judgment is awaited on that application.
13. To complete the picture, Heraeus has also raised the territoriality point as part of its appeals process on its application for permission to appeal.
14. Against that background the present claimants have started these proceedings and the defendants have made their applications. As already pointed out, the first claimant sues as Heraeus Kulzer's assignee. It would seem from the pleading and the evidence before me that these proceedings were started in case the claimants lose the territoriality point in Germany. In Germany they still firmly advance the case that the German order covers extra-territorial acts (and therefore acts in the UK). But in case that is wrong the claimants seem to have started the present proceedings claiming the same sort of relief on the same sort of basis in this jurisdiction. The pleading clearly pleads:

"3.8 Insofar as the present proceedings concern the Third and Fourth defendants, for the purposes of the present proceedings only, the Claimants do not contend that the relief granted by the [OLG] extends to acts of the Third and Fourth Defendants in the United Kingdom, in order to avoid the possibility of the court in this case delivering a judgment which conflicts with that given in any German proceedings."

15. Thus the claimants took inconsistent stances. In Germany they firmly maintained the stance that the German order has extra-territorial effect. In the present proceedings, "for the purposes of the present proceedings only" the claimants take the stance that the German order does not have extra-territorial effect.

The applications before me

16. Against that background of interlocking proceedings the following applications are before me:

(a) The UK Biomet defendants seek:

(i) A case management stay of the proceedings pending the determination by the German courts of the appeals.

(ii) A stay or a declaration that this court should not exercise jurisdiction because of the effects of Article 29 or 30(1) of the Recast Brussels I Regulation.

(iii) Permission to make the application in (ii) out of time or relief from sanctions because the application was brought after the UK Biomet defendants had acknowledged service indicating they intended to defend the claim.

(b) the Foreign Biomet defendants seek:

(i) An order that the court stay the proceedings or decline jurisdiction pursuant to Article 29 of the Recast Brussels Regulation.

(ii) A declaration that this court should stay the proceedings or not exercise jurisdiction to hear this claim because of Article 30; and an extension of time (and/or relief from sanctions) to permit them to raise this point.

(iii) A stay of the proceedings against them pending determination by the German courts of the appeals.

(iv) Striking out of the claim as an abuse of process and/or as disclosing no reasonable grounds for bringing the claim. (This application was not pursued as a separate application before me.)

(v) An order that service of the claim form be set aside against each of them. The third defendant says that service of the claim form under CPR 6.33 was improper because of the knowledge and belief of the maker of the certificate required by that rule; the fourth defendant says there was material non-disclosure in the application for permission to serve out that the claimants made in respect of that defendant, and in any event England cannot be shown to be the proper forum.

(c) In the event that either of the applications to strike out are acceded to, Mr Moody-Stuart seeks various forms of relief designed to mitigate the consequences of that.

17. The claimants originally accepted that there should be a limited stay of these proceedings. They say that there should be a case management stay of the claim against the Foreign Biomet defendants pending a determination in Germany of the territoriality points, but not pending the final German decisions, and not as against the UK Biomet defendants. The defendants' main case was there should be a stay of the proceedings against all of them pending a final resolution of the German proceedings (on both the merits point and the territoriality point). As I have said, on Day 3 of the hearing it was learnt that the claimants had lost their assertion in Germany as to the extended territoriality of the German judgment, and the parties then agreed that the applications to stay the proceedings should be adjourned to the final date for appealing from the decision just referred to, or the hand-down of this decision, if later. Those applications were therefore removed from my consideration, at least for the time being.
18. The applications I have to decide are therefore the defendants' applications seeking to set aside service, and the claimants' counter-applications in the event that one or both of those applications succeeds.

The German proceedings

19. A lot of Miss Bingham's submissions depended on what the German proceedings did and did not contain, so it is necessary to set out a little of the detail of the documents in those proceedings. In those proceedings, rather conveniently, the Foreign Biomet defendants were, as in the present proceedings, the third and fourth defendants. In what follows I have quoted the translation verbatim. It seems that the technique of the translator was to introduce the word "to" before numbering a Defendant when that word is, to English eyes, redundant. That should be borne in mind in what follows.
20. The German particulars of claim contain the following relevant elements:

(i) The claim for an injunction is made against inter alia the Foreign Biomet defendants in terms that they should: "I … cease and desist in business relationships for the purpose of competition to manufacture, offer and/or bring into circulation or manufacture, offer and/or sell to third parties [certain bone cements]"

(ii) The present third defendant (amongst others) is to be required to provide certain information which would be relevant to the taking of an account of profits.

(iii) It is claimed that the court should "ascertain that the Defendants are joint and severally liable to compensate the Plaintiff for all existing and future damages resulting from actions described in [paragraphs] I and II.I above.

(iv) The "summary of facts" sets out certain facts including the alleged illegal use of private information, and "The Defendants to 1) to 4) have had the "successors" for the entire product range of the Plaintiff manufactured by the Defendants to 6) ... And brought them on the market through the Defendants to 1) and 3)."

(v) It pleads the following: "Meanwhile the defendant to 6) is manufacturing bone cements for the Biomet group with the aid of the confidential recipes of the Plaintiff, which are distributed in Germany by the Defendants to 1) and in the rest of Europe by the Defendants to 3)." The significance of this is that it is capable of being an averment of an entitlement to remedies in respect of activities outside Germany.

(vi) There is a similar averment later on: "Within Europe [bone cement products] are being distributed, with the knowledge and intent of the defendants to 4), by the Defendant to 3) and other of their subsidiary companies, which have been created and/or acquired by the defendants to 4). The Defendants to 1) to 4) therefore together… use the Plaintiff's company secret which has been secured illegally by the defendant to 5)."

(vii) Under the heading "Result" the following appears: "The Defendant to 3) distributes the products and/or has the products distributed by its subsidiary companies in the rest of Europe."

21. It is on the basis of averments such as that that the claimants maintained in Germany that they had made a claim in respect of extra-territorial (outside Germany) activities.
22. On 4th August 2014 the Foreign Biomet defendants (and another company) launched their proceedings for declaratory relief averring that the German courts did not have jurisdiction to grant relief in respect of extra-territorial activities. It is unnecessary for me to set out any of the terms of their initiation document, but its effect is quite clear. The respondents to that application resisted it and the challenge to extra-territoriality in a document dated 27th November 2014 and a further document made a form of counterclaim seeking a declaration that the relief had extra-territorial effect.
23. On 3rd September 2014 the claimants started their enforcement proceedings in the court in Darmstadt. Their initiation document claims, in respect of the prohibition in relation to the manufacture and distribution of cement: "This prohibition also applies to infringing acts outside of Germany." A further document averred: "… the judgment of the Frankfurt Higher Regional Court [ie the OLG] does indeed apply to actions taken outside of the Federal Republic of Germany."
24. I have already indicated the fate of all these proceedings, that is to say judgment is awaited in the enforcement proceedings (in Darmstadt) and it would seem that in the declaratory proceedings the claimants have failed to establish extra-territorial effect.

The English claim in these proceedings

25. A large measure of the dispute at the hearing before me was as to the extent to which the English proceedings are or are not different from those in Germany. The following parts of the English Particulars of Claim are, or are said to be, relevant:
26. Paragraph 2.3 avers that the third defendant controls the activities of the Biomet group in the EU including the activities of the UK Biomet defendants.
27. Paragraph 2.4 avers that the fourth defendant is the parent company of the Biomet group and controls and procures the acts of the defendants complained of in the action.
28. Paragraph 2.8 pleads that, by virtue of common management, the UK Biomet defendants are fixed with the knowledge of the Foreign Biomet defendants of the confidential nature of the trade secrets, that the UK Biomet defendants are liable under a specified provision of German law for the acts of certain employees or officers and that the acts of the UK Biomet defendants were controlled and procured by the Foreign Biomet defendants pursuant to a common design.
29. At one stage in the evidence deployed on these applications it was said on behalf of the claimants that this was a plea of vicarious liability. As Mr Moody-Stuart was forced to admit, it is not.
30. Paragraph 2.10 makes clear the scope of the relief sought in these proceedings:

"2.10. For the avoidance of doubt, the present claim only seeks relief in respect of the acts of the Defendants in the United Kingdom. In order to establish the Claimants' entitlement to such relief, the Claimants rely on the Defendants' unlawful activities elsewhere in the world, but such acts are only relied upon to establish the unlawful nature of the acts within the United Kingdom complained of herein and in support of the Claimants' claim for relief in respect thereof."

Paragraph 3.5 contains a "Summary of relief granted by the [OLG]." Paragraph 3.6 goes on:

"3.6. The claimants will rely on the factual findings of the [Frankfurt courts] and the factual findings of the [OLG] in these proceedings as evidence in support of the Claimants' cases herein. Further the Claimants rely on the said findings of fact and law as binding upon the Defendants on the following grounds:

3.6.1. The First Claimant and the Third and Fourth Defendants were party to the proceedings in which the said findings were made, alternatively the First Claimant was privy thereto under German law with the effect that they are to be treated as a party alternatively a privy thereto under English law. The issues are res judicata as between the First Claimant and the Third and Fourth defendants and the Third and Fourth defendants are bound thereby.

3.6.2. In the light of the matter set out at paragraphs 2.1 to 2.9 above the First and Second defendants are privies to the proceedings in which the said findings of fact and law were made and estopped from disputing the said findings."

I have already set out the terms of paragraph 3.8 above.

31. Paragraph 4.12.3 pleads reliance on findings in the OLG in support of an averment that trade secrets were disclosed. That looks like another estoppel plea, though that concept is not expressly deployed.
32. Paragraph 5.2 pleads that the defendants "and each of them" have misused the claimants' trade secrets in manufacturing and/or importing into the UK, and selling in the UK, various cements. The acts are all UK-based acts. In support of that allegation, pending disclosure, the claimants say they will rely on findings in the OLG.
33. The applicable law is said to be German and/or English law (paragraph 6.1). German law seems to come first in the analysis which follows.

The circumstances of service - third defendant

34. The third defendant is a Dutch company, and when it came to service of the proceedings the claimants relied on CPR 6.33.

"6.33(2). The claimant may serve the claim form on a defendant out of the United Kingdom where each claim made against the defendant to be served and included in the claim form is a claim which the court has power to determine under the Judgments Regulation and –

(a) subject to paragraph (2A) no proceedings between the parties concerning the same claim are pending in the courts of any other part of the United Kingdom or any other Member State ..."

35. As required by the rules (CPR 6.34), the claimant's solicitor (Mr Christopher Stothers) completed a form N510. CPR 6.34 requires:

"6.34(1) Where the claimant intends to serve a claim form on a defendant under rule 6.32 or 6.33, the claimant must –

(a) file with the claim form a notice containing a statement of the grounds on which the claimant is entitled to serve the claim form out of the jurisdiction; and

(b) serve a copy of that notice with the claim form."

36. Within Part 2 of Form N510 there is the following statement in relation to proceedings to which CPR 6.33(2)(a) and 6.33(1)(b)(iii) apply:

"I state that each claim made against the defendant to be served included in the claim form is a claim which the court has power to determine under the Judgments Regulation and

(a) no proceedings between the parties concerning the same claim are pending in the courts of any other part of the United Kingdom or any other Member State; and

(b) the defendant is domiciled [in the United Kingdom] or [in another member state], namely the Netherlands."

37. There is a tick box next to that statement which the solicitor has ticked and the form contains a statement of truth at the end in which the solicitor verifies that "The claimant believes that the facts stated in this notice are true. I am duly authorised by the claimants to sign this statement."
38. The form is undated but the rules require that it should be completed and filed at court with the claim form. The claim form was issued on 17 July 2015.

The circumstances of service - fourth defendant

39. The fourth defendant being a company incorporated in Indiana, permission to serve out under CPR 6.36 and 6.37 was required. Permission to serve out was sought in an application notice dated 14 August 2015 and Master Price made an order permitting service out on 26 August 2015. The application was supported by a witness statement of Mr Stothers dated 14 August 2015. The terms of this statement are heavily relied on by Miss Bingham so I need to set out some of them.
40. Mr Stothers starts by introducing the nature of the application put before the court. Paragraphs 5 and 6 identify the various companies who are a party to these proceedings. Paragraph 7 describes the claim:

"7. The Claimants' claim, as set out in the Particulars of Claim, is based on a breach of confidence relating to certain trade secrets used in the development and manufacture of the Biomet Cements."

41. Paragraph 10 refers to the decision of the OLG on the main appeal. It describes the relief granted without making any reference to territoriality. Paragraph 11 repeats the basis on which the English proceedings are said to have been brought:

"11. The First and Second Defendants continue to sell the Biomet Cements in the UK. For the purpose of the present proceedings only, the Claimants do not contend that the relief granted by the OLG extends to acts in the UK although, as set out in Annex 1 to this witness statement, the First Claimant and the Third and Fourth Defendants dispute the scope of the relief granted by the OLG in proceedings pending elsewhere in Europe."

42. Paragraph 13 describes the claim as being brought under German law, or alternatively the law of England and Wales. Paragraph 14 avers that the English courts have jurisdiction to hear the claims against the UK Biomet defendants pursuant to the Recast Brussels Regulation, to hear claims against the third defendant under Article 8(1) of the Regulation on the basis that the claim against that defendant is so closely connected with the claims against the first and second defendants that it is expedient to hear and determine them together, and to hear the claims against the fourth defendant under CPR 6.36.
43. Paragraph 16 avers that there is a good arguable case that the claims brought against the fourth defendant fall within a number of the heads in the Practice Direction to CPR 6.36 – an injunction restraining activities carried out within the jurisdiction and "necessary or proper party" head.
44. Paragraph 25 avers that England is the proper forum in which to bring the claim for various reasons which I do not need to set out. That is then justified in the following paragraphs. Paragraph 26 avers that for reasons previously given and other reasons the matter is closely connected with England and it goes on:

"The facts which establish the original misuse of the Claimants' Trade Secrets in the development and manufacture of the Biomet Cements have already been established by the OLG in Germany, and all that remains to be established is the liability of the Defendants for further misuse of the Claimants Trade Secrets by way of sales of the Biomet Cements in the UK. We expect that many of the relevant witnesses and documents in respect of that further misuse are based in England, including those relevant to determining the influence and control exercised by the Fourth Defendant with respect to the actions of the First and Second Defendants."

45. Paragraphs 30 and following are preceded by the heading "Pending foreign proceedings":

"30. The First Claimant and the Third and Fourth Defendants, among other members of the Heraeus and Biomet groups, have been involved in litigation relating to misuse of the Claimants' Trade Secrets since 2008. The relevant proceedings are described in more detail in Annex 1 to this witness statement, and may ultimately lead to a decision that the relief granted by the OLG extends beyond Germany, including to the UK. However, there are no proceedings on foot between the same parties involving the same cause of action which would lead to the current proceedings being stayed pursuant to Article 29 of the Recast Brussels Regulation. There are also no related proceedings on foot which would lead to the possibility of a discretionary stay under Article 30, since the cause of action asserted in the present proceedings is distinct from the causes of action asserted in the pending foreign proceedings and there is no risk of irreconcilable judgments.

31. The cause of action asserted in the current proceedings, i.e. that the factual and legal findings of the German courts leads to a conclusion that the sale of the Biomet Cements in the UK amounts to a misuse of the Claimants' Trade Secrets under German and/or English law, is not in issue in any of the existing litigation.

32 ...

33. Finally, it is conceivable that the dispute about the scope of the OLG judgment pending in the German and Dutch proceedings will not be finally resolved for at least several years, as further explained in Annex 1 to this witness statement. If the Defendants are right that the relief granted by the OLG does not extend to the UK, the Claimants would have to pursue the cause of action asserted in these proceedings in order to obtain relief in respect of sales in the UK after the conclusion of the German and/or Dutch proceedings. The Claimants are therefore likely to achieve justice and commercial certainty through these proceedings significantly earlier than through the proceedings pending elsewhere in Europe."

46. Annex 1 describes the German proceedings, and also some other proceedings in Holland with which I do not need to deal. Paragraph 3 says that the claimants were successful in obtaining relief against the Foreign Biomet defendants from the OLG, including an order restraining manufacturing and distribution. It goes on: "The geographical scope of the relief granted by the OLG is disputed by the parties to the decision of the OLG".
47. Paragraph 4 describes in general terms the declaratory proceedings issued by the defendants, saying that the defendants sought a declaration that "the relief granted by the OLG does not extend beyond Germany", and referring to the appeal hearing (which was the hearing which took place on 28th April during the course of the hearing before me) Paragraphs 5 and 6 read:

"5. The First Claimant applied to [the Darmstadt court] on 3 September 2014 asking that court to enforce the relief granted by the OLG, on the basis that the sale of the Biomet Cements by the Third Defendant in the Netherlands and to affiliates in other countries amounts to a breach of the injunction granted by the OLG. So far, there has not been a court decision and it is unclear when and how the court will proceed to resolve this matter.

6. The parties to the decision of the OLG are seeking leave to appeal from the German Federal Court of Justice. A decision on leave to appeal is expected in 2016, and if leave to appeal is granted then the appeal is unlikely to be heard before 2017 or even 2018. If leave to appeal is granted, it is uncertain whether the Federal Court of Justice will rule on the scope of the relief granted by the OLG."

48. The remaining paragraphs describe Dutch proceedings in which (inter alia) the first claimant sought to enforce the OLG judgment, and in which the court refused to do so on the footing that proceedings involving the same cause of action between the same parties was already pending in Germany. That judgment was said to be under appeal. A claim by the third defendant for an order that the first claimant be prohibited from averring the German injunction had effect in the Netherlands was granted on the basis that the scope of relief granted by the OLG had not yet been finally decided.

Setting aside service - third defendant

49. Miss Bingham's approach to this point is, to my eyes, slightly curious. It is all based on the certificate provided by Mr Stothers in the box that he ticked pursuant to CPR 6.33. Miss Bingham did not submit that the certificate was simply wrong on the basis that there were in fact proceedings elsewhere (Germany) in respect of the same claim. She did not invite me to embark on that inquiry, saying that would be "madness" to do so when the court in Germany was going to decide the central point on such an inquiry - that point being whether the German order had pan-European effect. If the German court decided that it did then the proceedings in Germany would be co-extensive with the English proceedings; but if it was decided that it did not then the proceedings were not co-extensive. That was the point that she did not invite me to decide. Her primary case on that was that that should be left to the German court.
50. Her case, instead, was based on the state of mind of Mr Stothers when he came to provide his certificate. She submitted that Mr Stothers required reasonable grounds for his belief so that he could sign the statement of truth which accompanied the ticked box and the evidence reveals that he did not have any. She does not seek to say he was wrong; she might be in some difficulty in saying that when her client's case in Germany was that he was actually right. Her case turns on his state of mind, or "mens rea" as Mr Moody-Stuart called it.
51. Her starting point for this submission is the judgment of Gloster J in National Navigation Co v Endesa Generacion SA (The "Wadi Sudr") [2009] 1 Lloyds Rep 666. In the relevant part of that case the court accepted a challenge to its jurisdiction because, contrary to the basis on which jurisdiction was originally asserted, the relevant contract did not have a clause submitting to the English jurisdiction. The claim form had asserted that source of jurisdiction and was verified by a statement of truth from the claimant's solicitor. In the course of her judgment Gloster J said, in the passage relied on by Miss Bingham:

"72 … (vi) It is very important in cases said to fall under the Regulation, where this court takes jurisdiction on the basis of a statement in a claim form pursuant (now) to CPR 6.33, and accordingly there is no requirement for the court's leave to serve the proceedings out of the jurisdiction, that solicitors issuing proceedings take particular care to ensure that they have a reasonable basis for their belief, and that the facts supporting it are stated in a transparent fashion in the claim form. First seizure under the Regulation may obviously have important consequences for both parties, and for proceedings in other jurisdictions. It is therefore vitally important: (a) that jurisdiction is not wrongly asserted without reasonable belief; and (b) the grounds are clearly stated so that a jurisdictional challenge can, if necessary, be speedily and easily made. This did not happen in the present case."

52. Miss Bingham's case involves going into various aspects of the evidence that Mr Stothers has since given in order to demonstrate that he could not reasonably have had a belief in the accuracy of his statement, or a belief that he had the better of the argument that there were no other proceedings in which the claim was also being made.
53. Before considering the evidence to which Miss Bingham points it is worth considering whether her approach has legal merit. Mr Moody-Stuart pointed out that the relevant parts of the CPR do not refer to any mental element required of the person providing the certification. The real question was one of substance - were there foreign proceedings concerning the same claim or not? That was the question that had to be addressed, and the mindset of the person signing the notice did not come into it.
54. I agree with Mr Moody-Stuart on this point. In my view, as a matter of principle, the provision of the notice is there to provide some safeguards so as to help to ensure that CPR 6.33 is only used where it ought to be. The underlying legislative provision, which it is intended to supplement, is Article 29 of the Recast Brussels Regulation (and its predecessor. Article 29 provides:

"1. Without prejudice to Article 31(2), where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

…

3. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."

55. If there are already in existence proceedings as described in the Article, then the same proceedings ought not to be started in this jurisdiction, and service out should not be allowed even if grounds for suing in this jurisdiction could otherwise have been made out. The purpose of the notice which has to be provided under CPR 6.34 is probably twofold. First, it provides some sort of mechanism to police service of proceedings without permission under the Regulation so as to try to ensure that only proper cases make use of the opportunity to serve out of the jurisdiction without permission. It obviously requires and expects the claimant (or its solicitor) to consider the point, and to that extent is intended to act as a sort of filter. Second, it provides an indication to the recipient of the notice that the claimant considers that there are no equivalent proceedings on foot so that the recipient can decide whether to challenge service (and jurisdiction) if it disagrees (though the recipient is less likely to be interested in that because it will form its own view on the matter anyway).
56. None of that makes the state of mind of the person signing the notice (at least assuming that the belief is genuinely held) relevant to the propriety of service. As a matter of principle the conditions required by CPR 6.33 are either fulfilled or they are not. If there is a challenge it should be on the footing that the conditions are not fulfilled. Nothing else makes any real practical sense. If the conditions are not fulfilled then service ought not to be effected, and if necessary the English court will go on to decline jurisdiction (Article 29(3)) and, presumably, strike out the proceedings. That seems to me to be the real question, and it is hard to imagine how the state of mind of the maker will be of any interest to the defendant. It will make no difference whether the maker is conscientious and wrong or unconscientious and wrong - the result will be the same.
57. I do not consider that Gloster J's decision affects this conclusion. She was dealing with a different point. By the time she had made the pronouncement relied on she had already decided that there was no jurisdiction on the established facts. Although the defendant complained that the solicitor-provider of the relevant statement of truth in that case never had any factual basis for asserting a belief that there was a "submission to the jurisdiction" clause (see paragraph 56), her actual decision that there was no jurisdiction was based on the actual facts, not on the solicitor's belief or the reasonableness of it - see paragraph 65. Note in particular the closing words of that paragraph:

"It would clearly be wrong for this court to maintain jurisdiction in the light of a valid jurisdictional challenge simply in order to permit one party to take advantage of the "first-seised status" of the Commercial Court action, when such proceedings were issued in circumstances where the English court in fact had no jurisdiction under the Regulation, and the asserted basis for jurisdiction was incorrect." (my emphasis)

58. That was her decision on the jurisdiction point. Her remarks on the responsibilities of a person providing the statement as to foreign proceedings came in a different section of her judgment when she was dealing with costs, and in particular costs on the indemnity basis – see the heading immediately before paragraph 72. Her remarks demonstrate that the consequences of providing a certificate or statement for which there is no proper evidential basis are not merely that the proceedings will founder if jurisdiction cannot be established, but that the claimant will engage the court's disapproval when it comes to costs if the provider of the relevant information does not have a proper foundation for the belief which his or her statement of truth imports.
59. My conclusion is supported by the apparent purpose of the Regulation. It is to enable jurisdiction to be established, or declined, on the basis of a number of quasi-mechanical rules. That purpose would be undermined if the question of service, and therefore indirectly jurisdiction, was to be determined by reference to the reasonableness (or even the presence) of intentions and beliefs of the provider of statements of truth. What achieves the proper degree of clarity is the facts, not the belief of the maker of the statement as to the facts.
60. Miss Bingham's argument therefore fails at that stage. That makes it unnecessary for me to consider her attack on what Mr Stothers has said the basis of his signing the statement of truth on the form was. His principal evidence on the point was given in another context - the application to serve Biomet Inc out of the jurisdiction - and is set out above. He returns to the point in a later witness statement. The correctness of what he says about the basis of the proceedings in Germany and in this jurisdiction may just be relevant to issues about Article 29 and 30 of the Regulation which I have not been invited to address yet (because there is now an agreed stay), and it would be unwise for me to say anything at this stage about those points when they might come up again in a context where they might matter more. In any event, a consideration of some of those points involves a consideration of something which Miss Bingham was expressly inviting me not to consider, namely the Article 29 point itself, which she said should be left to the German court.
61. I will merely observe one further thing which in my view demonstrates the correctness of not setting aside service on Biomet BV for the reason proposed. The key to jurisdiction may well be whether the German judgment covers activities in the UK. It is actually the defendants' case that it does not. If they are right about that then there are no proceedings in a Brussels Regulation state which are the same as the English proceedings, and the defendants accept that. It now appears that the OLG has found in favour of the defendants on that point, which means that (subject to an appeal) Mr Stothers turns out to be right, though not for the reasons that he gave. If the OLG ruling stands, his certificate was correct. In my view it matters not that he was right for the wrong reasons. It would be odd to set aside service in those circumstances.

Service out on Biomet – non-disclosure

62. This challenge is put on two bases - non-disclosure of relevant material when permission to serve out was sought, and a failure to demonstrate that England and Wales is the proper forum for this claim for the purposes of CPR 6.37(3).
63. The obligation to make proper disclosure on an application to serve out (which is always made without notice) is clear and was not in dispute. In the context of an application for service out of the jurisdiction the position was summarised in Konamaneni v Rolls Royce (India) Ltd [2002] 1 WLR 1269. At paragraph 179 Lawrence Collins J said:

" 180.  On an application without notice the duty of the applicant is to make a full and fair disclosure of all the material facts, ie those which it is material (in the objective sense) for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers; the duty is a strict one and includes not merely material facts known to the applicant but also additional facts which he would have known if he had made proper enquiries: Brink's Mat Ltd v Elcombe   [1988]  1   WLR  1350, 1356–1357. But an applicant does not have a duty to disclose points against him which have not been raised by the other side and in respect of which there is no reason to anticipate that the other side would raise such points if it were present.

     181.  These principles have long been applied to applications for permission to serve out of the jurisdiction: see e g The Hagen   [1908]  P  189, 201. In that context it has been held that it would not be reasonable to expect an applicant for permission to serve out to anticipate all the arguments or points which might be raised against his case: see Electric Furnace Co v Selas Corpn of America [1987]  RPC  23, 29. A failure to refer to arguments on the merits which the defendant might raise at trial should not generally be characterised as a "failure to make full and fair disclosure", unless they are of such weight that their omission may mislead the court in exercising its jurisdiction under the rule and its discretion whether or not to grant permission: BP Exploration Co (Libya) Ltd v Hunt   [1976]  1   WLR  788, 788–789, approved in the Electric Furnace case [1987]  RPC  23, 29.

     182.  In BP Exploration v Hunt [1976]  3   All ER  879, 894 Kerr J warned that:

     "the court should not consider the supporting affidavit as though it were marking an examination paper, deciding one way or the other merely on the basis of the extent to which the affidavit could have been improved. The primary question should be whether in all the circumstances the effect of the affidavit is such as to mislead the court in any material respect concerning its jurisdiction and the discretion under the rule.""

64. Miss Bingham accepted that a claimant applying for permission to serve out of the jurisdiction was not bound to anticipate all permutations of arguments that might be put by an opponent, but relied on what was said in MRG (Japan) Ltd v Engelhard Metals Japan Ltd [2004] 1 Lloyds Rep 731 at para 29:

"[If an applicant is] aware of matters which might reasonably have caused the judge to have any doubt whether he should grant permission to serve out of the jurisdiction, those would have been relevant matters and therefore ought to have been disclosed."

65. For his part Mr Moody-Stuart drew my attention to the general principles summarised by Warby J in Sloutsker v Romanova [2015] EWHC 545 (QB).
66. The non-disclosure allegation in the present case centres on what Mr Stothers did and did not say in his supporting witness statement about the German proceedings and the issues in play there. Mr Cordell, the defendant's solicitor, put this point in various ways, some of which I confess I did not fully understand. I shall, for these purposes, concentrate on the way in which Miss Bingham put the point in her skeleton argument and opening submissions.
67. In her skeleton argument Miss Bingham said that Mr Stothers' witness statement was not just guilty of culpable omission, it was actually misleading. He said, in paragraph 30:

" … there are no proceedings on foot between the same parties involving the same cause of action which would lead to the current proceedings being stayed pursuant to Article 29 of the Recast Brussels Regulation. There are also no related proceedings on foot which would lead to the possibility of a discretionary stay under Article 30, since the cause of action asserted in the present proceedings is distinct from the causes of action asserted in the pending foreign proceedings and there is no risk of irreconcilable judgments."

68. This is said to be wrong because both the main German proceedings and the present proceedings concern the same cause of action (misuse of trade secrets) against the same person (Biomet Inc, for these purposes, though it is also true of Biomet BV) and the same products. Those proceedings involved the same cause of action, and/or they were related. There was a real possibility (if not inevitability) of a discretionary stay under section 30 and a risk of irreconcilable judgments bearing in mind the shared subject matter. Those were material matters which pointed against ordering service out of the jurisdiction and the Master was being invited to rely on what was a misrepresentation. The factual material went to whether England and Wales was the proper forum of the claim against Biomet Inc.
69. Mr Moody-Stuart's counter to this was to say that when properly viewed as a whole, the witness statement identified the German proceedings, and the basis on which the English proceedings were run (that is to say, they were run on the footing that the German proceedings did not reach UK acts), all of which was sufficient to disclose, accurately, the Article 29/30 position. The disclosure that was made in the evidence meant that paragraph 30 was not misleading.
70. When analysed this point has two aspects, though they are related. The first is that the witness statement did not say enough about the inter-relationship of the English and German proceedings, and the second is that what it did say about them, in terms of Articles 29 and 30, was wrong. I will take those two points in that order.
71. The relevance of the German proceedings is that they go to the question of whether England and Wales is the appropriate place for trial. It is plain enough that full disclosure required a reference to foreign proceedings which have gone to judgment and which might be said to cover the same ground, and if it is said that they are different then the differences should be highlighted. That process requires similarities to be sufficiently pointed out too, if full disclosure is to be made. The German proceedings and judgment fall into that category. The question here is whether the disclosure was clear enough so as to demonstrate that there were proceedings and judgments in Germany which might be relevant to the question, and to point up questions of similarity that were sufficiently clear and relevant to require disclosure.
72. The relevant paragraphs in Mr Stothers' witness statement have been set out above. The cross-reference to the Annex in paragraph 11 is important. It highlights the dispute as to the scope of relief and refers to the Annex where more details can be found. There is nothing wrong in putting the material in the Annex. Paragraphs 3, 4 and 5 articulate the stances taken as to the extra-territorial effect of the German ruling, and make the respective positions clear enough. In this case that is not "burying" material in an Annex (as Miss Bingham pejoratively put it). It is one way of putting detailed material out of the way of a more general narrative. I agree that there is no express reference to the counterclaim made by the claimants in the Declaratory proceedings, but that is not particularly material. The stances taken by the parties are made clear enough. Paragraph 11 also makes clear enough that for the purposes of the present proceedings the claimants do not rely on the territorial effect of the German proceedings. They may or may not be entitled to take that stance, but the position is disclosed. In other words, the claimants are saying that while they take one stance in Germany, they take another in this jurisdiction. The distinction between the stances taken is clearly enough disclosed.
73. Various other paragraphs follow paragraph 11, in which the proceedings are very generally described and the real issues to be tried are set out, as is the gateway ("necessary or proper party"). Paragraph 25 is preceded by the heading "England is the proper forum in which to bring the claim". That draws the attention of the reader to the significance of what follows. Paragraph 26 avers that all relevant findings have been made in Germany and presents the issue, and by implication the main distinction between the proceedings, as being the claim based on UK acts, something which the evidence has already pointed out as being in issue in Germany, with the claimants taking a stance which is the opposite of the stance taken in the English proceedings. There is, in my view, adequate disclosure of the stances in the German proceedings and in the English proceedings.
74. Paragraph 30, with its preceding heading ("Pending foreign proceedings") refers again (via a permissible cross-reference to the Annex) to the German proceedings, and discloses that the German proceedings may ultimately result in a decision that the OLG decision extended to acts done outside Germany, including the UK. That again is a plain disclosure of the fact that the actionability of UK acts may be decided by the German proceedings. Paragraph 31 summarises what is said to be the claimants' case in terms of liability and where the wrongful acts are said to have occurred ("in the UK"), though I agree that there is no emphasis on the United Kingdom feature.
75. Finally, paragraph 33 expounds the merits of proceeding in this jurisdiction. It indicates that the present proceedings have a point if it were to turn out in Germany, perhaps in several years time, that UK acts are not covered by the German proceedings. That, again, demonstrates that the German proceedings may be capable of determining claims based on acts in this jurisdiction. It is true that it assumes that the cases should proceed in parallel, on a "just in case" basis, but it reinforces the disclosure of the close similarities, if not identities, of the two sets of proceedings.
76. I therefore find that so far as the non-disclosure claim is based on a failure to disclose adequately the common ground between the two sets of proceedings, and the contentions made in the German proceedings by the claimants that UK acts were covered, then that claim fails. There is adequate disclosure of those matters in the witness statement and annex.
77. Next it is necessary to turn to the positive statements made in paragraph 30 of Mr Stothers' statement about which Miss Bingham complained. This complaint centres around the express wording of paragraph 30 and its assertions about the application of Articles 29 and 30. She complains that this is a mis-statement because there was (to put it at its lowest) a possibility of stays under one or both of those Articles, because the proceedings, as they were being advanced in Germany, covered the same ground as the English proceedings. They were proceedings against the same parties based on the same misuse of trade secrets and seeking the same relief in the UK. That means that one or other of the Articles could be invoked and Mr Stothers was simply wrong in his two statements about those Articles, and in particular his statement as to the "no possibility" of a stay.
78. Mr Moody-Stuart disputes the non-disclosure. He points out that the position in the German proceedings appears clearly enough in the witness statement (including the Annex) and the nature of the English proceedings is also clear enough. Those proceedings are said not to be the same as those in Germany. All the relevant underlying facts are disclosed and it matters not if it turns out to be the case that Mr Stothers' views about the operation of Articles 29 and 30 are wrong. What is important is the underlying factual material, and that is disclosed.
79. In considering the impact of what Mr Stothers says it is necessary to consider a little more closely what he says about the proceedings, because that seems to be the reasoning behind his summary. The justification behind what he says in paragraph 30 appears in the following three paragraphs of his witness statement. Paragraph 31 apparently seeks to draw two distinctions between the English proceedings and the German proceedings. He apparently seeks to say that the findings in Germany (not, apparently the underlying facts themselves) are the basis of the English action, and then he refers to sales of cements "in the UK" in a way which suggests that that is a difference between the two sets of proceedings. Miss Bingham submitted (in effect) that the first of those two features was not a distinction, and she may well be right about that. The sort of estoppels on which the English claim seems, at least in part, to be based are probably a way of proving facts, not a separate set of facts for these purposes. But at least Mr Stothers is setting his claim out.
80. Paragraph 32 (not set out above) seeks to distinguish the cases on the footing that the second claimant and the UK Biomet entities are not parties to the German proceedings, and paragraph 33 makes a point about what is said to be the desirability of producing an earlier decision than might otherwise happen in Germany.
81. All those seem to be said to be reasons for reaching the views expressed in paragraph 30. I think it would be fair to describe some of the points as contentious, and the last two sentences of paragraph 30 as ambitious, but I do not think that they were actually misleading, or misrepresentations for the purposes of the rules about disclosure in applications to serve out. The main point is really the fact that the extra-territorial effect of the German judgment was in issue in the German proceedings, and for the reasons given above that was clear enough from the witness statement read fairly. Insofar as it can be said to over-state the position, I do not consider that it does so to an extent which, in my discretion, I would view as justifying setting aside service.
82. I therefore decline to set aside service on Biomet Inc on the basis of non-disclosure.

Is England and Wales the appropriate forum for the dispute?

83. Miss Bingham mounted a challenge on this point, separate from her non-disclosure point, though there are common elements to the two of them. At the heart of her submission was the short point that England and Wales could not be shown to be the proper place to bring the claim against Biomet Inc for the purposes of CPR 6.37(3) while the claimants were contending that they already had relief in Germany in respect of UK acts. Miss Bingham pointed to De Wolf v Cox BV (Case 42/76):

"To accept the admissibility of an application concerning the same subject-matter and brought between the same parties as an application upon which judgment had already been delivered by a court in another Contracting State would therefore be incompatible with the meaning of the provisions quoted. It also results from Article 21 of the Convention, which covers cases in which proceedings "involving the same cause of action and between the same parties are brought in the courts of different Contracting States" and requires that a court other than the court first seised shall decline jurisdiction in favour of that court, that proceedings such as those brought before the Kantonrechter of Boxmeer are incompatible with the objectives of the Convention."

84. She said that the claimants had obtained their judgment. If they had decided and stated that they were not going to make a claim in Germany that the judgment covered UK acts then those proceedings would not disqualify England as the appropriate forum. However, in the absence of that they were not able to make a case for England as the appropriate forum. They were not entitled to maintain one case in one jurisdiction (Germany) and another in this one, having to chosen to sue in Germany in the first place. The claimants could not justify that England and Wales was the appropriate forum.
85. This point demonstrates a degree of irony. The defendants firmly maintain that the German proceedings did not cover UK acts. If they are right (and the recent findings in Germany would tend to demonstrate that they are, subject to an appeal, though technically the point has to be judged as at the date of the application to serve out, at which point the German decision was not available - see Vitol Bahrain EC v Nasdec General Trading LLC [2014] EWHC 984 - then their point on forum fails, as they would accept. The claimants contend the opposite, but if they are right then they have difficulties in maintaining the present proceedings which they would wish to maintain. Though the causes of action sued on in this jurisdiction are said to be different, the heart of the action is the same and the real distinction between the proceedings, if there is one, will lie in whether or not the German relief covers UK acts.
86. I do not propose to consider at this point in this judgment whether the pleaded cause of action against the third and fourth defendants is (apart from the territoriality point) different in these proceedings when compared with the German proceedings. I will assume, in favour of the defendants and against the claimants, that it is the same. The only difference between the proceedings (on that assumption) is therefore whether the German proceedings cover UK acts. On that footing England and Wales is the proper forum for these proceedings if it is the case that the defendants are right about territoriality. As at the date of the order giving permission to serve out, there was uncertainty, though each side advanced their respective cases. I do not see why the claimants should not be able to rely on an element of conditionality, and say that England and Wales is the appropriate forum if they are wrong on the territorial effect of the German proceedings. I accept that that is not what they said in their application to the Master, but it underlies their case. The real question is not what they say the effect of the German proceedings is, but what it actually is. If they are wrong in their contentions in Germany, then England and Wales is the proper forum. If they are right then it is likely not to be, for the reasons given by Miss Bingham (though a final decision on that might depend on a further dissection of the pleaded cases). It is that real question that has to be determined. I was not invited to determine it; at the outset the parties seemed to be at one saying that that decision was best taken by the German courts.
87. Such an element of conditionality does not seem to me to be contrary to principle, and if managed properly it will not cause injustice. It might matter to a claimant to have proceedings on foot here at an earlier rather than a later date - for example, in order to avoid the effect of limitation. A claimant may be able legitimately to say that if an issue in a foreign jurisdiction goes against him or her then England and Wales becomes the appropriate forum but that that is not yet clear. When clarity is obtained, the question can then be answered clearly. The claimant would be likely to have to submit to a stay in the meanwhile - see, by analogy, HM Attorney-General v Arthur Andersen [1989] ECC 224. That case, cited by Miss Bingham, is a forum conveniens case, not a service out case, but I do not see why its principles should not be applied to allow issue and service out in a case where an important point about the extent of another state's jurisdiction is to be dealt with in that other jurisdiction.
88. Accordingly, and although that was not the basis on which the application to serve out was explicitly put, I am satisfied that England and Wales will be the appropriate forum in which to bring this case in the event that it is established that the German proceedings do not cover UK acts, and that that requirement of CPR 6.37 is sufficiently fulfilled. I therefore decline to set aside service on Biomet Inc on the inappropriate forum challenge.

The claimants' counter-applications

89. Had I been minded to set aside service of either or both of the claim forms as against the third and fourth defendants Mr Moody-Stuart had various counter-applications to try to preserve his current claim forms. He indicated he would seek an extension of time for service of the claim form and permission to effect substituted service on their solicitors who are currently instructed (the same solicitors as act for the UK Biomet defendants and who have acted before me in the jurisdictional challenges) or alternatively permission to serve out of the jurisdiction. Alternatively he sought permission to "reissue and serve a fresh claim form against D3 and D4" and an order for substituted service of that claim form or service out. By "reissue" he meant simply issue a fresh claim form for the same relief.
90. In the light of my conclusions on setting aside service it is unnecessary for me to deal with those applications and I shall not do so. They seemed to me to be fairly ambitious, but I need say no more than that.

Conclusion

91. I therefore refuse the applications to set aside service and such consequential relief as would have flowed from a decision to do so. As I have already indicated, I am not currently invited to rule on the other applications.