Alfa Laval Tumba AB & Anor v Separator Spares International Ltd & Anor [2012] EWHC 1155 (Ch)

Case No HC08C01046[2012] EWHC 1155 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 04/05/2012
Before
MR JUSTICE BRIGGS
Between
(1) ALFA LAVAL TUMBA AB (2) ALFA LAVAL KRAKOW Sp. zo.o. (Formerly WYTWÓRNIA SEPARATOR KRAKÓW Sp.zo.o)Claimants(1) SEPARATOR SPARES INTERNATIONAL LTD (in liquidation)Defendants(2) MARK RICHARD HARDWICK PACYDefendant
Mr John Baldwin QC (instructed by Hogan Lovells LLP) for ClaimantsMr James St Ville (instructed by Adams Solicitors) for DefendantsHearing Hearing dates: 20 and 23 April 2012
JudgmentMr Justice Briggs :Introduction
[1]By Application Notice dated 25 July 2011 the claimants in these intellectual property proceedings seek to add parties, and to make substantial amendments to the Particulars of Claim. Mr Mark Pacy, the only continuing defendant to the proceedings, has not consented to the application but has taken no steps to oppose it. The application to add two additional claimants is not opposed. The application to add two Polish domiciled defendants, Separator Spares Int. Poland Sp. Zo.o (“SSIP”) and Daniel Jasikowski is vigorously opposed by solicitors and counsel instructed on their behalf, at present for that purpose only, and without submitting to the jurisdiction. I shall refer to them as the Polish respondents.[2]The two day hearing of the application has given rise to wide-ranging submissions concerning applicable law, European jurisdiction and limitation (both under English and Polish law). In the barest outline, the claimants assert causes of action against the Polish respondents under English law, both in breach of copyright and misuse of confidential information, and under Polish law pursuant to a statute prohibiting unfair competition. Notwithstanding their Polish domicile the claimants assert a special English jurisdiction against them under Articles 5.3 and 6.1 of the Judgments Regulation. The Polish respondents deny that and, in addition, Mr Jasikowski seeks to rely upon Articles 18 and 20, as a former employee of the second claimant. The Polish respondents assert that the only possible causes of action against them arise under Polish law, in respect of which they allege that a three year limitation period has passed in respect of the only real, rather than fanciful, claims made against them. The claimants do not dispute that the Polish respondents have an arguable limitation defence at least to part of the claim, but suggest a solution which would not require them, so as to avoid prejudicing that claim, to bring separate proceedings in respect of those parts of the claim which are arguably statute barred.

The Alleged Facts

[3]The proposed amended Particulars of Claim (“APOC”) are long, detailed and supported by a number of schedules in respect of some of which the claimants wish to maintain confidentiality, for commercial reasons. Nothing in this judgment trespasses upon that confidentiality, although it was briefly necessary for the court to sit in private to hear one submission by Mr St Ville for the Polish respondents, which necessitated reference to part of a confidential schedule. There follows a concise summary of the essential factual basis of the claim alleged.[4]The existing claimants Alfa Laval Tumba AB and Alfa Laval Krakow Sp. zo. o are and have for many years been engaged in the design, manufacture and sale of marine separators. I shall refer to the first claimant as “Alfa Laval” and to the second claimant as “WSK” (a label derived from its former name Wytwórnia Separator Kraków Sp. zo.o). Marine separators are machines designed and sold primarily for use on ships which separate oil and water which have become mixed, so that the first can be re-used and the second discharged at sea without either substance contaminating the other.[5]For the purpose of that business Alfa Laval has a design office in Sweden and produces drawings for its separators and their numerous constituent parts which it makes available to associated companies, including WSK, which is incorporated and carries on business in Poland. All relevant intellectual property rights in those drawings and their contents reside in Alfa Laval companies. The purpose of the non-contentious addition as claimants of Alfa Laval AB and Alfa Laval Corporate AB is to ensure that no persons in whom those intellectual property rights may reside are excluded from among the claimants.[6]In 2005, immediately before the happening of the matters complained of, the second defendant Mr Pacy was the owner, or at least leading light in the management, of the first defendant Separator Spares International Ltd (“SSI”), a company incorporated in England and carrying on business from trading premises in the Isle of Wight. Its business consisted of (or included) the procuring and marketing of spare parts for Alfa Laval separators. Mr Jasikowski, domiciled in Poland, was an employee of WSK at its premises in Poland. WSK was, or had been, a significant supplier of spare parts for Alfa Laval Separators to SSI.[7]During the course of 2005 Mr Pacy and Mr Jasikowski together devised a plan to go into business together in the supply of spare parts for Alfa Laval separators in competition with the claimants. They recognised that spare parts could be designed and manufactured by reverse engineering (that is from the obtaining, study, and, in effect, copying of spare parts emanating from the claimants), but that spare parts could for the most part be made both more cheaply and to a higher quality by the obtaining of Alfa Laval’s own design drawings, and the use of those drawings for the purpose of manufacture. Since they entertained no expectation that the claimants would make those drawings available on attractive terms, if at all, Mr Pacy and Mr Jasikowski resolved to obtain them covertly and unlawfully, by bribing a WSK employee in its drawings office (referred to in the proceedings as a Mr X since his identity has never been revealed) to make copies of the drawings available, usually in electronic form, to Mr Jasikowski, with a view to his transmitting them to Mr Pacy at SSI’s premises in the Isle of Wight. There it was planned that the drawings would be copied and re-branded so as to appear to be SSI drawings, before being used in commissioning sub-contractors in various locations around the world to manufacture and supply spare parts to SSI’s order.[8]It was also part of Mr Pacy’s and Mr Jasikowski’s original plan that they should set up a corporate quasi-partnership between them in Poland, initially to act as SSI’s Polish distributor of spare parts for Alfa Laval separators, receiving therefore the economic benefit of those parts having been manufactured to Alfa Laval drawings, rather than by reverse engineering. The plan as I have described it necessarily involved Mr Jasikowski resigning from his employment with WSK, before establishing SSIP as his and Mr Pacy’s corporate joint venture vehicle in Poland, at the beginning of 2006. Their scheme necessarily involved keeping secret from the claimants the obtaining, copying and rebranding of their design drawings and, of course, the bribing of Mr X for that purpose.[9]Mr Pacy and Mr Jasikowski’s scheme was duly implemented by them, SSI and SSIP as follows. Mr Pacy provided to Mr Jasikowski the funds (or the bulk of the funds) necessary to bribe Mr X, who copied and supplied, mainly in electronic form, Alfa Laval design drawings from WSK’s drawings office in Poland to Mr Jasikowski. He transmitted them by various mainly electronic means to SSI and Mr Pacy in England, where they were copied, rebranded as SSI drawings and used as the basis for SSI’s subsequent obtaining from sub-contractors all around the world of Alfa Laval marine separator spare parts, for the purpose of mounting a business in competition with the claimants’ own spare parts business. SSIP was established at the beginning of 2006, following Mr Jasikowski’s resignation from WSK. It acted initially as SSI’s sales agent in Poland but, in due course, the claimants say that it obtained its own copies of the claimants’ design drawings (whether or not rebranded) and also received direct supplies of spare parts from sub-contractors initially engaged by SSI. The illegitimate competitive advantage constituted by the covert use of the claimants’ design drawings was in due course supplemented by the covert obtaining and use of additional “non-drawing confidential information” obtained by Mr Jasikowski, consisting of lists of component suppliers to WSK, costings of such components, and information recorded by employees of WSK concerning visits to customers in Italy.[10]Although the competition of SSI and SSIP in the marine separator spare parts business was of course, apparent to the claimants, they remained unaware of the covert obtaining of their design drawings and other confidential information until they found out about it in two stages. The first was that by April 2006 WSK had discovered that another of its employees, a Mr Fasuga had made non-drawing confidential information available to Mr Jasikowski for use by SSIP. Although its enquiries suggested that some drawings had been supplied to Mr Jasikowski, they did not (on the claimants’ evidence) include drawings sufficient to enable parts to be manufactured, nor was the link with Mr Pacy and SSI in the illicit obtaining and using of the claimants’ design drawings discovered or even suspected at that time.[11]The second stage occurred in late 2007, when a whistleblower within SSI tipped-off Alfa Laval that its drawings were being copied and rebranded as SSI drawings at its premises in England. This led, in April 2008, to the obtaining and execution of a search order at SSI’s premises in the Isle of Wight the result of which, despite Mr Pacy’s endeavours to frustrate the process, was the discovery of large numbers of Alfa Laval drawings, many rebranded as SSI drawings, together with records of electronic communications between Mr Pacy and Mr Jasikowski recording their planning of the scheme and evidence of the manner in which Alfa Laval’s drawings had been obtained by Mr Jasikowski and transmitted to Mr Pacy and SSI. Much of the detail of the claimants’ case, as I have summarised it, derives from the materials obtained upon the execution of that search order.[12]The subsequent history of this litigation needs to be briefly described. Proceedings were issued against SSI on 15 April 2008 and, not later than upon reading a disclosure affidavit by Mr Pacy sworn on 18 May, the claimants became fully cognizant of their potential case against Mr Jasikowski. In June 2008 SSI went into administration. Mr Pacy was added as defendant in November and, in December, served a one paragraph defence asserting that he had acted merely as a director of SSI throughout, but advancing no other defence or challenge to the claimants’ factual case. In April 2009 Mr Pacy received a suspended sentence of committal for breach of the search order. In May SSI was placed into creditors’ voluntary liquidation.[13]In March 2010 Mr Pacy’s suspension from committal was lifted and he received, and began to serve, a six month prison sentence for contempt. In July the claimants settled with SSI. Nothing of note occurred in the litigation from then until the making of this application in July 2011. In the meantime Mr Jasikowski had continued to operate a competing spare parts business for Alfa Laval Separators through SSIP, and in due course Mr Pacy re-established himself in that business by incorporating Separator Spares International (UK) (“SSIUK”), again from premises in the Isle of Wight. I infer (although this was nowhere expressly stated in the claimants’ evidence) that the resumption of this litigation from the relative torpor into which it had fallen by 2011 was occasioned by a perception on the part of the claimants that their conduct of the litigation thus far had not put a permanent end to what they regard as the unlawful and unfair competition in the spare parts business which had been facilitated by the obtaining of their design drawings and other confidential information.[14]The claimants’ case is that Mr Jasikowski and SSIP have continued to make unlawful use of their design drawings and other confidential information to this date, although the Polish respondents maintain that this part of the claimants’ case is so lacking in substance that it should not be permitted to be pursued by amendment. Save to that limited extent, the Polish respondents do not suggest that the case which I have described is so lacking in substance that, other objections aside, it should not properly form the basis of permission both to amend and to join them as parties.

Causes of Action

[15]The claimants seek to pursue their claim against the Polish respondents under three causes of action, two pursuant to English law and one pursuant to Polish law. The English law causes of action are breach of copyright and misuse of confidential information. The Polish law cause of action consists of acts of unfair competition contrary to Articles 11 and 23 of the Polish Act on Combating Unfair Competition of 1993 (the “ACUC”). Earlier formulations of the APOC included additional claims against the Polish respondents, for example for breach of Polish copyright and, in relation to Mr Jasikowski, breach of his contract of employment with WSK. Those have been abandoned, upon a sensible recognition that the English court would decline jurisdiction in relation to them under the Judgments Regulation.[16]Taking the three continuing causes of action in reverse order, it is unnecessary to spend time upon the claim under the ACUC, since the Polish respondents do not suggest that the facts alleged, if proved, would not disclose a claim of that kind against them. By contrast, the English causes of action have given rise to serious contention. The Polish respondents maintained at the outset of this application that, since the unlawful acts alleged against them occurred entirely in Poland, the law applicable to the claims against them is solely Polish law.[17]It is, at least in my experience, unusual for questions as to applicable law to form a major part in the debate on an application to join foreign domiciled persons as defendants to existing English proceedings. In the present case, the identification of the applicable law is said to be relevant to both to the question whether the claimants can bring their claims against the Polish respondents within Article 6.1 of the Judgments Regulation, and, more critically, to the limitation issues since, at least arguably, Polish law provides a substantially shorter limitation period than English law in relation to the matters alleged.[18]It is, generally speaking, unsatisfactory for the court to attempt a final determination of questions of applicable law at the early stages of a case in which the facts have yet to be found. Regardless whether the question is where the enrichment occurred, or the law governing the relationship between the parties, the answers are all likely to be fact sensitive, all the more so in a case where, in substance, the allegation is that individuals and corporate persons in different countries combined together to commit wrongs against persons in yet further countries, by the misuse of intellectual property for the purposes of conducting a competing trade worldwide. At the stage where questions of applicable law have to be addressed essentially on the basis of draft statements of case (and in advance of any formal statement of a defence), I consider that the question for the court is whether the draft statement of case discloses a sufficiently arguable or prima facie case for the application of the particular national law relied upon to make it appropriate for the court to require the foreign defendants to answer the claim in the English court. For that purpose I shall assume that the “good arguable case” standard applicable on a challenge to an assertion of jurisdiction under the Judgments Regulation is equally applicable where some aspect of that challenge, as here, involves a consideration of the applicable law. I make that assumption, in the absence of submissions from counsel either way, notwithstanding that it imposes a higher burden on the claimants than that which would be necessary to establish, in order to resist an ordinary application to strike out a claim, or for defendant’s summary judgment.[19]Mr St Ville for the Polish respondents submitted that the applicable law relating to the claim against them based on misuse of confidential information was to be determined in accordance with the following principles. Firstly, prior to the coming into force of the Rome II Regulation in January 2009, the applicable law in relation to a breach of confidence claim must be determined in accordance with common law principles, because it falls outside section 11 of the Private International Law (Miscellaneous Provisions) Act 1995, not being a claim in tort: see Innovia Films Ltd v Frito Lay North America Inc. [2012] EWHC 790 (Pat), at paragraph 102. Secondly relying on the Court of Appeal’s guarded approval of the analysis in Dicey & Morris on Conflict Laws (13th Edition) (2000) Vol 2 at paras 34 – 029 ff, in Douglas v Hello! Ltd (No 3) [2006] QB 125, at paragraph 97, he submitted that the applicable law in relation to a claim for breach of confidence is, on restitutionary principles, the law of the country where the unjust enrichment occurred. Thirdly, he submitted that, in relation to events on and after 11 January 2009, the Rome II Regulation provides, at Article 4, a general rule applicable (inter alia) to breach of confidence that the applicable law is that of the country in which the damage occurs, unless some manifestly closer connection with another country is established pursuant to Article 4.3: see again the Innovia case at paragraphs 109 to 111, where that analysis was treated as common ground.[20]Mr St Ville very properly drew my attention to the fact that, in the Innovia case, Arnold J preferred (in relation to the period before January 2009) an alternative common law principle derived from the decision of the High Court of Australia in Att-Gen (UK) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR 30, pursuant to which the applicable law is that which the parties’ obligations, and the rights associated with their breach, are most closely associated: see in the Innovia case, at paragraphs 107 - 108.[21]Applying any of those tests, Mr St Ville submitted that the applicable law must be Polish law. For that purpose he focussed his analysis on the allegedly unlawful conduct of the Polish respondents, in using the claimants’ confidential information for the purposes of competing with WSK’s mainly Polish business, in circumstances where the legal relationship between Mr Jasikowski and WSK at the time of the initial planning and implementation of the extraction of the Alfa Laval design drawings was an employment relationship governed by Polish law.[22]For his part Mr Baldwin QC for the claimants offered no specific challenge to Mr St Ville’s exposition of the relevant legal principles. His submission was that the applicable law had to be identified from the starting point of a recognition that the misconduct alleged was that of four perpetrators of a common design (namely the English defendants and the Polish respondents) which had as its objective the creation at SSI’s premises in the Isle of Wight of a complete set of rebranded Alfa Laval drawings of spare parts for its marine separators, for the purpose of conducting a competing spare parts business worldwide, but based at least initially in England. England was therefore the place where the unlawful combination was centred, where both the unjust enrichment and the damage occurred, and English law had the closest connection with the rights arising from the matters complained of. Central to Mr Baldwin’s analysis was his assertion that the Polish respondents, as joint participants with the English defendants in a common design, were liable just as much for those parts of the planning and implementation of the unlawful scheme that took place in England, as for their individual acts of participation in Poland.[23]There is in my judgment much to be said for each of these competing analyses and, for reasons already given, I consider that it would be inappropriate for me to choose finally between them while the facts remain to be established at trial. In my judgment the claimants have, on the materials presently available, a good arguable case for establishing that English law is applicable to the claim against both the English defendants and the Polish respondents collectively, as parties to a single common design. I am fortified in that conclusion by the tendency, eventually acknowledged by Mr St Ville, of his analysis to lead to the result that a different law would be applicable to the English and Polish participants in the common design, an outcome which strikes me as lacking in commonsense. Mr St Ville’s alternative and, in my view, equally unattractive solution was to submit that the Polish respondents should be judged by Polish law in relation to that which they did personally, even if by English law in relation to the acts of the English defendants for which he accepted (on the case advanced) that they had a form of accessory liability.[24]In relation to the Polish respondents’ alleged liability (as participants in a joint design) for breach of the claimants’ copyright by importing into England and copying in England the claimants’ drawings, Mr St Ville did not in his submissions advance any case that the applicable law was other than English law. Jurisdiction 25. Section 5

Jurisdiction

[25]It is convenient to address the jurisdiction issues separately in relation to Mr Jasikowski and SSIP, mainly because of Mr Jasikowski’s status as a former employee of WSK. Mr St Ville’s submission was that, because of that status, the courts of Poland have exclusive jurisdiction over the claim against him, pursuant to Section 5 of the Judgments Regulation, since he is domiciled there.[26]Recital 13 to the Judgments Regulation provides that:
“In relation to insurance, consumer contracts and employment, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules provide for.”
Article 18.1 provides that:
“In matters relating to individual contracts of employment, jurisdiction shall be determined by this Section, without prejudice to Article 4 and point 5 of Article 5.”
Article 20.1 provides that:
“An employer may bring proceedings only in the courts of the Member States in which the employee is domiciled.”
[27]It was common ground that in claims to which Section 5 (including Articles 18 and 20) applies, no recourse may be had to Articles 5.3 or 6.1, upon which, in the alternative, the claimants’ case for English jurisdiction against the Polish respondents is based: see Glaxo Smith Kline v Rouard (Case 462/06) [2008] ICR 1375, at 1388. The issue for decision is whether Section 5 applies to any of the causes of action asserted against Mr Jasikowski, there being no specific claim based upon an alleged breach of his contract of employment with WSK.[28]Mr St Ville submitted that in order to give effect to the objective of protecting the weaker party in Recital 13, (which, he pointed out, refers to “employment” rather than contracts of employment), it was necessary purposively to construe Article 18.1 as applicable to all claims by employers against current or former employees, all the more so if, as here, the matters complained of included conduct which occurred during the currency of the contract of employment. He said that Section 5 would be rendered nugatory if employers could have recourse to other causes of action such as tort or breach of equitable obligations as a means of circumventing the requirement to sue their employees in the places of their domicile. He drewsome assistance from Samengo-Turner v J & H Marsh & McLennan (Services) Ltd [2008] ICR 18 in which the Court of Appeal treated Section 5 as applicable to a claim by an associated company of the defendant’s employer under incentive arrangements which formed part of his employment package, but not part of his contract of employment. He also drew my attention to paragraph 2.103 of Briggs & Rees on Civil Jurisdiction Judgments (5th edition), both in relation to the question whether Section 5 applies to claims brought after the termination of employment and to claims not arising directly from the contract itself, such as a claim against the employer for breach of statutory duty under the health & safety at work regime.[29]Mr St Ville’s principal obstacle was the decision of HHJ McGonigal in Swithenbank Foods Ltd v Bowers [2002] 2 All ER (Comm) 974. In that case, the claimant sued nine defendants, eight of whom had been its former employees, for conspiracy to induce breach of contract and (in relation to the eight former employees) for breach of fiduciary duty arising from their contracts of employment. The judge held that Section 5 applied to the breach of duty claim, but not to the conspiracy claim. At paragraph 24 he said that the advantage conferred by Section 5 should be confined to cases where the defendant’s status as an employee is legally relevant, and that:
“The contract of employment is relevant, and there is a matter relating to an individual contract of employment, only if the employer is seeking to rely on that contract of employment in order to bring his claim against the employee.”
At paragraph 25 he said that he could see no justification of policy for conspirators, or any tortfeasors, who are employees of the claimant being given jurisdictional advantages not enjoyed by conspirators or other tortfeasors who are not employees of the claimant. At paragraph 26 he concluded that the phrase in Article 18 “in matters relating to individual contracts of employment” meant only where claims were made under individual contracts of employment.[30]In the Samengo Turner case, at paragraph 28, Tuckey LJ said, of the Swithenbank case that:
“The fact that the defendant was an employee was not legally relevant to the conspiracy claim which was not a contractual claim at all. So the decision in this case is readily understandable, but again I do not think it sheds any real light on our case.”
[31]I consider that Judge McGonigal was right to confine Section 5 to cases where the contract of employment is legally relevant to the claim. Although not necessary for my decision in the present case, I doubt whether it is thereby confined only to claims under the employment contract. Nonetheless, I consider it clear that Section 5 is inapplicable to the claimants’ claims against Mr Jasikowski. Although he happened to be an employee of WSK when he bribed Mr X to obtain the Alfa Laval drawings for him, it is not even alleged that Mr Jasikowski’s status as an employee gave him access to those drawings. The substance of the claim against Mr Jasikowski would it seems to me to be the same whether the opportunity to bribe Mr X occurred while they were working at WSK’s premises, or during shared leisure activities. In short Mr Jasokowski’s status as an employee of WSK during part of the material period, while undoubtedly part of the factual matrix, is legally irrelevant to the claim against him as party to a common design to misuse the claimant’s intellectual property for the purpose of facilitating unlawful competition against them. Section 5 of the Judgments Regulation is therefore no obstacle to the Claimants’ invocation of English jurisdiction. Article 6.1[32]Article 6.1 of the Judgment Regulation provides that a person domiciled in a Member State may also be sued:
“Where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and to determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.”
The recent judgment of the Court of Justice (Third Chamber) in Painer v Standard Verlags GmbH & ors (C – 145/10) contains, at paragraphs 74 to 84, a useful summary of the jurisprudence on Article 6.1. In particular, it is clear that the invocation of this exception to the requirement to sue a defendant where he is domiciled does not require it to be shown that the case against him and the other defendants has the same legal basis, if there is a sufficiently close factual connection between those claims to give rise to a sufficient risk of irreconcilable judgments if pursued in separate Member States.[33]Mr St Ville drew my attention to the following dictum of Mummery LJ in Research in Motion Ltd v Visto Corporation [2008] EWCA Civ 153, paragraph 37, concerning the almost identical language of Article 28, following a description of the mechanical effect of first seisin:
“However, that is not the result of the application of Article 28 in the present matter because its effect is not entirely mechanical. It requires an assessment of the degree of connection, and then a value judgment as to the expediency of hearing the two actions together (assuming they could be so heard) in order to avoid the risk of inconsistent judgments. It does not say that any possibility of inconsistent judgments means that they are inevitably related. It seems that the Article leaves it open to a court to acknowledge a connection, or a risk of inconsistent judgments, but to say that a connection is not sufficiently close, or the risk is not sufficiently great, to make the actions related for the purpose of the article. Mechanics do not, for once, provide a complete answer.”
[34]I acknowledge that a similar value judgment falls to be carried out in relation to an invocation of Article 6.1. In that context, Mr St Ville submitted that the risk of irreconcilable judgments was low in the present case first, because there was no active pursuit of the claim against Mr Pacy (and a settlement as against SSI) and secondly because there needed to be no adjudication of liability as against Mr Pacy since he had served a defence which would not obstruct the claimants from obtaining summary judgment against him. While he could not go so far as suggesting that Mr Pacy had been sued merely as a vehicle for ousting Polish jurisdiction against the Polish respondents, he submitted that Mr Pacy was little more than a nominal defendant.[35]I am not persuaded that these considerations significantly detract from what seems otherwise to me to be an obvious case for the application of Article 6.1. The connection between the claims against Mr Pacy and the Polish respondents arises from their being sued as parties to a common design, in respect of all the causes of action alleged. The language of Article 6.1 suggests that it is primarily to the closeness of the connection that the court looks when carrying out its value judgment. Questions such as whether a particular defendant will mount an active defence or whether the claim may be or has been allowed for a time to become dormant against a particular defendant do not seem to me to go to the heart of the analysis. For as long there remain separate claims being pursued against Mr Pacy in England and against the Polish respondents in Poland, the risk of irreconcilable judgments seems to me to be palpable.[36]It is fair comment that, by comparison with Mr Jasikowski, the connection between the claim against Mr Pacy and against SSIP is perhaps less powerful. SSIP was a creature and beneficiary of the design rather than an original planner of it. Nonetheless, it was set up as a joint venture between Mr Pacy and Mr Jasikowski for the purpose of exploiting the benefits of their misuse of the claimants’ confidential information. Furthermore, once the requisite connection between Mr Pacy and Mr Jasikowski permits Mr Jasikowski’s joinder, the connection between the claim against Mr Jasikowski and SSIP is itself sufficiently close to make it expedient that they be heard together. Article 5.3[37]An invocation of this alternative basis for English jurisdiction was pursued, for the first time, during the hearing of this application. Its application to the present claims is by no means straightforward and the lateness of its invocation meant that the issues arising from the need to identify “the place where the harmful event occurred” were by no means fully argued. Having found that the claimants’ case under Article 6.1 is sufficiently made out, I have concluded that no useful purpose would be served by a separate analysis of the alternative case under Article 5.3.

Limitation

[38]After an inconclusive exchange of expert evidence, it became common ground by the beginning of the hearing of this application that, in relation to the Polish law claims under the ACUC, the Polish respondents have an arguable case that the claim is now statute barred, at least in relation to all those aspects of unfair competition pleaded as having occurred more than three years ago. This is so, notwithstanding that a central feature of the case is that the planning and implementation of the common design to misuse the claimants’ confidential information was deliberately concealed from the claimants. By contrast, and notwithstanding Mr St Ville’s rather muted submissions to the contrary, I am satisfied that the Polish respondents have no arguable answer to a case of deliberate concealment under Section 32(1)(b) of the Limitation Act 1980, sufficient to postpone the running of the six year limitation period until the execution of the search order at SSI’s premises in early 2008.[39]The effect of Section 35(1)(b) of the Limitation Act is that, if the claims now sought to be made against the Polish respondents are introduced into these proceedings, they are deemed to have been commenced when these proceedings were commenced, in 2008. This would plainly be prejudicial to the Polish respondents’ arguable Polish law limitation defence to the claim under the ACUC. The normal consequence, pursuant to Welsh Development Agency v Redpath Dorman Long Limited [1994] 1 WLR 1409, at 1425, is that permission to introduce the new claim by amendment should be refused, and the claimant left to bring that claim, by separate proceedings.[40]The sensible policy behind that general rule is that Section 35(3) to (5) of the Limitation Act prohibits the introduction of a new claim to which Section 35(1)(b) applies where a limitation period relating to that new action has expired, but the court is frequently unable to decide that question once and for all without a trial. In the present case it would require, at least, the trial of issues between experts on Polish law which the parties’ experts in the present case both regard as finely balanced, in the sense that each acknowledges a body of professional opinion contrary to his or her own view.[41]In a purely domestic context, the requirement upon a claimant to litigate what may be closely related issues in separate actions causes no risk of irreconcilable judgments which cannot be satisfactorily alleviated by good case management. This would ordinarily consist of directions which ensure both actions are tried together before the same judge and, if necessary, upon the same evidence.In the international context it initially seemed to me that the general rule in the Welsh Development agency case could give rise to serious difficulty if it prevented a claimant from relying upon Article 6.1, because the phrase “one of a number of defendants” appeared at least arguably to require that they be defendants in the same proceedings. But in Masri v The Consolidated Contractors International UK Limited [2005] EWCA Civ 1436 the Court of Appeal concluded that Article 6.1 was not to be construed in that limited manner. Accordingly, it may be invoked for the purpose of invoking English jurisdiction against a non-domiciled defendant where, in separate English proceedings there existed a sufficiently connected claim so as to make it expedient that the two distinct sets of English proceedings be heard and determined together.[42]Mr Baldwin suggested an alternative (as he described it Woolfian) solution to the conundrum in the present case, whereby the court could permit the pursuit of the Polish cause of action in the present proceedings without prejudicing the Polish respondents’ limitation defence, by securing from the claimants an undertaking not to pursue that claim if it appeared, at trial, that it would have been statute barred if commenced now.[43]That ingenuous solution would certainly avoid the additional cost of the commencement of a separate claim in England based on the Polish cause of action alone, followed by directions for its management and trial together with the present claim. Nonetheless, Mr Baldwin could not point to any instance where this solution had been adopted, or to any good reason why it had not been mentioned as an alternative, either in the Welsh Development Agency case, or in those cases which have applied the rule of practice to which I have referred. In a written submission after the end of the hearing Mr Baldwin frankly acknowledged that his solution did not lie easily with Section 35(3) to (5) of the Limitation Act which, in cases where there is clearly a limitation defence at the time of the application to add the new claim, primary legislation simply prohibits its addition to the existing proceedings.[44]Although sorely tempted, I have not in the end been persuaded to set a precedent by the adoption of Mr Baldwin’s proposed solution, all the more so because the Masri case suggests, for the reasons which I have given, that it is unnecessary to do so for the purpose of ensuring that all the claims which the claimants wish to pursue against Mr Pacy and the Polish respondents are heard and determined together, within the meaning of Article 6.1. That outcome can still be achieved, by hearing a separate English claim under the ACUC together with the present proceedings.

Discretion

[45]Mr St Ville advanced two further reasons why, even if his arguments on applicable law, jurisdiction and limitation were unsuccessful, I should nonetheless refuse as a matter of discretion to permit the proposed joinder and amendment. His first general point was that a party is not entitled as of right to re-cast proceedings in the radical way attempted by this application, the matter remaining one for the court’s discretion. He said that, in reality, the claimants were seeking to bring a new claim against entirely different parties, hung on the peg of a moribund action against two existing parties, one of which had settled, and the other of which, despite putting up no real defence, had not been proceeded against actively for some time. He suggested that the claimants were in truth simply seeking to prevent legitimate competition by the Polish respondents in the spare parts market, and doing so (by litigating in England) in a manner calculated to cause as much difficulty and expense to the Polish respondents as possible.[46]That criticism linked in with his second point which was that the claimants’ case that the Polish respondents were still making use of the claimants’ confidential information was purely speculative, and so lacking in substance that it ought not to be permitted to be introduced, either by amendment or at all.[47]Those points are I think best addressed in reverse order. If the claimants have a real rather than fanciful case that the Polish respondents are (whether or not in league with Mr Pacy) still misusing their confidential information so as to gain an unfair competitive advantage in the marine separators spare parts market, and doing so by the continuing use of the plans and other information alleged to have been taken from the claimants in the execution of the common design formulated in 2005, then there is plainly a case to go to trial in relation to current misuse, and good reason to try that claim in the context of the existing claim based upon what is alleged to have occurred in and after 2005.[48]In my judgment the case that there continues to be current misuse of the claimants’ confidential information by the Polish respondents is by no means fanciful. All that the claimants can demonstrate for certain is that the Polish respondents and SSIP in particular, are holding themselves out in the spare parts market as the supplier of a full range of spare parts for Alfa Laval marine separators. The Polish respondents’ short answer is that, whatever may have been the position in the past, they are now doing so purely with the benefit of reverse engineering. While I accept Mr St Ville’s submission that the claimants’ attempt, by reference to a particularly complicated spare part to demonstrate that some continuing misuse of Alfa Laval drawings must still be going on carries little weight upon close analysis, the other factors relied upon seem to me plainly sufficient to give rise to triable issues. Those factors may be summarised as follows. First, there is a strong case that Mr Jasikowski was centrally involved in the planning and execution of the original extraction of the claimants’ drawings from WSK. Secondly, there is a strong case that SSIP was formed by Mr Jasikowski and Mr Pacy for the specific purpose of making unlawful use of the confidential information thereby obtained in competing in the spare parts market against the claimants, it clearly having been their shared belief that the misuse of Alfa Laval design drawings was much to be preferred to reverse engineering, both on the grounds of cost and quality. Thirdly, there has to date been no injunction or other effective constraint on SSIP or Mr Jasikowski from reaping the benefit of the unlawful obtaining of the claimants’ design drawings, in the way that there has as against Mr Pacy and SSI. The outcome is that there is at present no persuasive reason to suppose that the Polish respondents are no longer wishing to reap what they have sown, and every reason to suppose that the process of disclosure will reveal (if it has taken place) a process of reverse engineering sufficient to make good their case, which is at present no more than bare assertion, that their present ability to supply spare parts for Alfa Laval Marine Separators is attributable to purely lawful means of achieving the necessary design and production. Putting it in slightly more technical language, there is a real rather than fanciful basis to suppose that, while the legal burden of proof no doubt remains on the claimants throughout, the history of the matter is sufficient to shift the evidential burden on the Polish respondents to show that, having planned and implemented a scheme designed to permit unfair competition by the wholesale misuse of the claimants’ confidential information, the Polish respondents have recently, and without legal compulsion, decided to mend their ways.[49]For those reasons the Polish respondents’ invitation to me to refuse the application on discretionary grounds fails.

Conclusion

[50]The result of this necessarily tortuous analysis is that, save only for the claim in Polish law based on the ACUC, the joinder of parties and amendments now sought to be made to the Particulars of Claim are to be permitted. The only obstacle to the pursuit of the Polish law claim in this jurisdiction is the prejudice which its inclusion in these existing proceedings may cause to the Polish respondents’ arguable limitation defence. It must therefore be pursued, if at all in this jurisdiction, by a separate claim, and any residual risk of irreconcilable judgments constituted by the existence of separate proceedings within this jurisdiction resolved by sensible case management, so that both are heard together, or at least by the same judge, and upon the same evidence.

Cited in 3 later judgments