FD Technologies Plc v Inqdata Limited [2025] EWHC 1677 (TCC)

[2025] EWHC 1677 (TCC)Claim Nos.: HT-2025-000097and HT-2025-000107
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (KBD)
Venue The Rolls Building, 7 Rolls Buildings, Fetter LaneDate Friday, 27th June 2025
London EC4A 1NL
Before
ALAN BATES(sitting as a Deputy Judge of the High Court)
Between
FD TECHNOLOGIES PLCClaimantINQDATA LIMITEDDefendantAnd between:
Between
INQDATA LIMITEDClaimantFD TECHNOLOGIES PLCDefendant
MR. YASH KULKARNI KC and MR. WILLIAM MITCHELL (instructed by Bristows LLP) appeared for FD TECHNOLOGIES.MR. DANIEL KHOO (instructed by Dentons UK and Middle East LLP) appeared for INQDATA.
Approved JudgmentDigital Transcription by Marten Walsh Cherer Ltd.,2 nd Floor, Quality House, 6-9 Quality Court, Chancery Lane, London WC2A 1HP.Telephone No: 020 7067 2900. DX 410 LDEEmail: info@martenwalshcherer.comWeb: www.martenwalshcherer.com

ALAN BATES :

[1]This is a directions hearing in two claims – one being a Part 7 claim and the other a Part 8 claim – between FD Technologies plc, which has been referred to as ‘KX’, and a company called INQDATA Limited, which I will refer to as ‘INQ’.[2]The hearing is to determine whether the substantive dispute between the parties should continue by way of the Part 7 claim or, instead, by way of the Part 8 claim. Whichever decision the court comes to on that question, the parties agree that the other claim should be discontinued with no order as to costs, and that the court should then give appropriate directions for the proceedings to be progressed.[3]The Part 7 claim was brought by KX, and KX's position is that the Part 7 claim is the more appropriate vehicle for resolving the substantive dispute. INQ's position, in contrast, is that its Part 8 claim should be progressed, and that KX’s Part 7 claim should remain stayed. I have heard from Mr. Kulkarni KC on behalf of KX, and from Mr. Khoo, who appeared for INQ, and I am very grateful to both of them for their clear and economical submissions at this hearing.[4]I will briefly outline the factual background. KX is an owner of database and analytics software. Its customers are primarily in the financial sector. The customers use the software to import or ingest, process, store and analyse large datasets, which assist hedge funds and other financial organisations in their decision-making. KX generally charges its customers based on an annual licence, the price for which is determined by their usage of the software. By ‘usage’, what is meant is that the customer is ingesting and maintaining the datasets that are to be analysed. It is by reference to the quantity of such usage that the price paid by the customer to KX is determined.[5]INQ is a company that specialises in curating, cleansing, and mapping data, primarily for financial institutions. It offers ‘market data as a service’, which is a cloud-based delivery model that provides on-demand access to data. Its service enables its customers to access large datasets that have already been cleansed or refined by reference to various parameters, which makes the resulting data easier for the customer to itself process and analyse.[6]INQ's provision of its service relies on INQ being able to use KX's software. KX says that it would expect that many of INQ's customers would also be customers of KX's software, essentially because the customers would use KX's software to themselves ingest the data, even if that data has been subject to prior cleansing or refinement by INQ.[7]INQ is able to use KX's software because it has been granted a licence to do so. The licence agreement between KX and INQ dates from 5th April 2022, and has been effective since 25th February 2022. The key features of the licence, for present purposes, include that INQ has the right to use the KX software in order to provide a data cleansing and delivery service. The licence terms employ a concept of “permitted use” and sets out the uses to which INQ may put the KX software. Such uses are defined in ways that include various limitations, including that the data cleansing service is limited to cleansing financial market data only. INQ's permitted use of the KX software is limited to that which is authorised by the terms of the licence.[8]A dispute has arisen between KX and INQ as to whether elements or aspects of the services INQ is providing to its customers go outside the parameters of INQ's permitted use of the KX software. There are essentially three features of INQ's service which KX is alleging stray outside the parameters of what is permitted by the licence. The first such feature is referred to by INQ as the “storing feature”, the second as the “on-demand feature”, and the third as the “source agnosticism feature”. For present purposes, it is not necessary for me to set out in any detail what those features consist of, and why they are said to stray outside the parameters of the uses permitted under the licence.[9]The parties also disagree about whether the features of the service being provided by INQ stray, for a further reason, outside what is permitted by the licence. That further reason relates to a term of the licence which restricts INQ from use using the KX software to offer products or services which compete with, or provide the same or similar features as, KX's software.[10]KX has also now alleged that INQ appears to be offering a service going outside what is permitted by the licence for a yet further reason, namely by not limiting its service to financial market data only. As Mr. Khoo pointed out, on behalf of INQ, at this hearing, that particular allegation has been raised only very recently, and its basis is currently unclear, or at least has not been set out in the inter-party correspondence.[11]KX says that it is being caused loss and damage by the continued provision by INQ of a service that includes the disputed features, because INQ's provision of those features is reducing the need for hedge funds, banks and other current or potential customers of KX to themselves use the KX software, with the consequence that the amounts of the licence fees that those customers have to pay KX are reduced. KX alleges that, in some cases, INQ's customers may decide to cease buying the KX software.[12]By its Part 7 claim, KX seeks various remedies, including a declaration, but also an injunction to prevent INQ from providing the disputed services, and KX also seeks damages. By the Part 8 claim, INQ ask the court for a declaration that none of the disputed features are outside the parameters of the uses permitted by the licence.[13]Both parties agree that the court will, for the purpose of construing the terms of the licence, need to consider, at least to some extent, features of the factual matrix against which the terms of the licence contract were agreed. The potential significance of the factual matrix to the interpretation of the terms of a contract under English law is well-established: see the pithy summary of the relevant principles by Lord Hodge in Wood v Capita Insurance Services Ltd [2017] UKSC 24 at [8]-[15]. For present purposes, it is not necessary for me to set out in detail precisely what each party says are the relevant features of the factual matrix, but I have considered all of the relevant points set out in the parties' helpful skeleton arguments. This case is not analogous to the example given in Berkely Homes Ltd v John Sisk and Son Ltd [2023] EWHC 2152 (TCC), at [51], of a “paradigm Part 8 claim”: a claim raising“a discrete issue of contractual construction which can be determined within the four corners of the contract”.[14]In Cathay Pacific Airlines Limited v Lufthansa Technik AG [2019] EWHC 484 (Ch), John Kimbell QC, sitting as a Deputy Judge of the High Court, set out, at [31]-[42], a helpful summary of the principles relevant for identifying a dispute as being suitable for determination by way of Part 8 proceedings. I gratefully adopt that summary. As the learned judge observed at [32]:
“In some cases, the court will permit the parties to use CPR Part 8 as a means of obtaining a quick decision on one or more issues of law or construction in a broader litigation – see e.g. Myers v Kestrel Acquisitions Limited [2015] EWHC 916 (Ch) . In such cases it is imperative that there be an agreed statement of facts and a precisely framed question. …”
In applying the principles to in the specific circumstances of that case,

the judge stated, at [47]:

“The degree to which it is necessary or proportionate to devote significant time to considering factual matrix material will vary from case to case. In the present case, given the nature of the contract, its duration and the sums involved, I am satisfied that it would be both proportionate and appropriate to give detailed consideration of the commercial background against which the Agreement was entered into and performed. The relevant facts will need to be pleaded. …”
[15]There is some urgency, from both parties' perspectives, to resolve what I am going to call the ‘Central Dispute’ between them. The parties have, at this hearing, used a different term, the term "contractual dispute", to describe the main area of substantive disagreement between them, but possibly with a narrower meaning than what I mean when referring to the ‘Central Dispute’. For example, Mr. Khoo's definition of “contractual dispute” did not include KX's recent allegation that INQ may be offering a service in relation to data not limited to financial market data. What I mean by ‘Central Dispute’ includes essentially two broad issues:(1) What is it that INQ is actually doing as part of its provision of its service to its customers and which it could lawfully do only if licensed by KX?; and(2) On a proper interpretation of the licence contract, is INQ, by doing any of those things, straying beyond the parameters of what it is permitted by the licence to do, and, if so, how? For the purpose of determining that second issue, which is largely one of contractual interpretation, there will need to be some consideration of the factual matrix, as I have already indicated, and such consideration is likely to require some expert evidence, as well as, potentially, some factual evidence and some disclosure.[16]The urgency of resolving the Central Dispute is particularly clear from INQ's perspective, because it needs clarity as to whether it can lawfully provide the services that it is providing to its customers, and that those customers are using. INQ says that the incentives for KX towards seeking swift resolution might be lower, but KX says that it too wants to achieve a resolution as quickly as possible. In that regard, KX notes that it too needs certainty, and it says that the service that INQ is providing, insofar as it includes the disputed features, is eroding demand for KX's software and thus causing KX to lose revenue.[17]The court is, of course, fully cognisant of the fact that, whilst the Part 7 procedure and the Part 8 procedure is each a distinct framework from the other, each of those procedures is capable of being adapted to suit the needs of each case. As Mr. Khoo pointed out, directions for factual or expert evidence can be given in a Part 8 claim. An illustrative example is Vitpol Building Service v Samen [2008] EWHC 2283 (TCC), , in which Coulson J, at [18]-[19], adopted a hybrid procedure whereby some oral evidence, albeit limited, was permitted in the context of a Part 8 claim.[18]Mr. Kulkarni, on behalf of KX, drew attention to Jefford J's note of caution, in Merit Holdings Ltd v Michael J Lonsdale Ltd [2017] EWHC 2450 (TCC) at [22]:
"The experience of this Court shows that there is a real risk of the Part 8 procedure being used too liberally and inappropriately with the risks both of prejudice to one or other of the parties in the presentation of their case and of the court being asked to reach ill-formulated and ill-informed decisions."
[19]In my judgment, the appropriate approach for me to take today, for deciding whether it is the Part 7 claim or the Part 8 claim that is to be allowed to progress, is to focus on what practically needs to be done in terms of procedural steps to assist the court in resolving particularly the Central Dispute, as I have framed it. To assist me in assessing that, I have considered the parties' respective proposed directions. Only after coming to a view on the procedural steps that will need to be taken will I then turn to deciding what label to put on the proceedings, whether that is ‘Part 7’ or ‘Part 8’.[20]As to what practically needs doing, Mr. Khoo relies heavily on a “factual matrix table”. This is a table that has been prepared by INQ's solicitors, for the purpose of identifying the alleged features of the factual matrix which each party wishes to advance, and the extent to which there are disagreements between them about those matters. INQ has sought, through its solicitors, to cajole KX to engage with the process of preparing and populating that factual matrix table. KX, however, has been reluctant to do so, essentially because it wished to progress its Part 7 claim and considered that Part 7-style pleadings would be a more appropriate means of establishing, with precision, the specific disagreements between the parties, for the resolution of which disclosure, and expert or factual evidence, might be required. So what INQ has done, absent collaboration from KX, is to unilaterally populate the factual matrix table by reference to the correspondence between the parties. INQ has asked KX's solicitors to provide responses to questions about aspects of the factual matrix that may be in dispute, and has used the content of such responses as were received to then populate the table. I note that there are some disagreements between the parties as to whether the table fairly represents KX's position as set out in the correspondence.[21]Mr. Khoo's proposal as to the appropriate means of progressing the proceedings is essentially that, in the context of the Part 8 claim being the claim that is allowed to progress, further work should be done by the parties on populating the factual matrix table. Once that is settled, there should be a single deadline for the parties to exchange expert reports and other evidence. Such an approach would, he suggests, facilitate a trial of the “contractual dispute” in October this year, or as soon after that as can be accommodated by the court. The time estimate proposed by Mr. Khoo for that substantive hearing is one day. Mr. Khoo was at pains to say, however, that he is not wedded to those specific directions, and that if the court considered, for example, that a two-day hearing was required, or that provision should be made for disclosure, then that could all be slotted into the timetable, pursuant to the flexibility which he points out is available within the Part 8 procedure.[22]KX's proposal, in contrast, is that there should be an exchange of Part 7-style pleadings. Mr. Kulkarni says that that can be done very quickly; the particulars of claim could be ready in 14 days or perhaps even seven days, and the process of exchanging pleadings could be completed during the summer months, and there should then be a directions hearing early in the Michaelmas term.[23]In my judgment, this is a case of significant IT technical complexity, in relation both to(1) the detail of precisely what INQ is providing to its customers and how it is using KX’s software in order to do so, and(2) the factual matrix against which the licence agreement was concluded, including the mutual expectations and understandings of the parties as to the services each of them would be providing to their respective customers during the term of that licence agreement. There is the potential for there to be significant expert and factual evidence, albeit that such evidence should, of course, be confined within proportionate bounds.[24]In my judgment, the court will be assisted by an exchange of pleadings, and the factual matrix table – which, as I have explained, is not a joint document – is not an adequate alternative. The table represents a valiant attempt by INQ to tease out from KX, through correspondence, precisely what is or is not agreed in terms of the factual matrix and to capture that information within a table. It is understandable that INQ would seek to take this approach in circumstances where its commercial interests may be harmed if there is prolonged uncertainty as to its entitlement to provide its customers with features of its service which those customers are using. In my judgment, however, I am not in a position now, based on the limited material before me, to say that it would be possible to produce, in short order, a factual matrix table that suffices to enable a judge, whether that is me or somebody else, to be well-placed to take informed decisions about, for example, the scope of any disclosure.[25]Tt seems to me that, standing back and looking at the Central Dispute and what may be required for resolving it, the court would be assisted by Part 7-style pleadings by reference to which the disagreements between the parties can be more precisely defined. As KX has submitted, given the extent to which issues have already been discussed in inter-party correspondence, it should be possible for such pleadings to be produced swiftly. Once such pleadings have been exchanged, the court will be able to refer to them when deciding whether, and to what extent, disclosure, expert evidence, factual evidence, and potentially oral evidence, is appropriate. The court will be keen to ensure that any evidence and disclosure is confined to what is genuinely needed and proportionate.[26]I note that Mr. Khoo accepted that some disclosure was likely to be needed, albeit he says it should be limited. It seems to me that the court is quite likely to need, in due course, to assess precisely what disclosure is appropriate, and the court will, as I said, be assisted in doing so if there has been an exchange of full pleadings. His client’s position that a time estimate of one hearing day could be sufficient for determining the “contractual dispute” is, in my view, unrealistic, having regard to the IT technical complexity of this case, including in relation to the factual matrix material.[27]Ultimately, it seems to me that Mr. Khoo's approach, whilst in many ways a commendable attempt to try to bring the Central Dispute to adjudication as soon as possible, carries far too many risks of being derailed. If, for example, further work by the parties on the factual matrix table revealed significant disagreements about features of the factual matrix, or as to how the parties’ positions as to those features should be appropriately captured within the table, then this could lead to an application having to be made to the court, and associated disruption to Mr. Khoo’s proposed short procedural timetable. There is also clear potential for significant disagreements between the parties about, for example, what disclosure, or what expert or factual evidence, is required, which could be more difficult for the court to resolve without the benefit of exchanged pleadings. Further, the factual matrix table would not assist in identifying the extent of any disagreements between the parties about other potentially significant matters, such as the technical operation of disputed features of INQ's service, how such features are using KX’s software, and the extent to which those features may be operating to reduce demand for KX’s software. The use of the factual matrix table as a ‘shortcut’ could thus turn out to be a ‘false economy’; it could lead to the Central Dispute taking longer to resolve than might otherwise have been possible.[28]For all of these reasons, it would, in my judgment, be preferable that there be an expeditious but orderly process of exchanging pleadings, before the court then decides what disclosure should be ordered, and what further directions should be given. Such a process most naturally fits within the framework of Part 7 proceedings, and therefore I will direct that KX’s Part 7 claim is the one that progresses, and that INQ's Part 8 claim remains stayed. As I have said, there will be strict case management for the progression of the Part 7 proceedings, in order to ensure that they make rapid progress towards resolution. It also seems to me, without deciding it, that it may well be appropriate for what I have called the ‘Central Dispute’ to be resolved first. Whether one calls the hearing that resolves that dispute a ‘preliminary issue hearing’ or ‘trial 1 of a split trial arrangement’ does not seem to me to matter. What does matter is that we resolve the Central Dispute as soon as possible, given the practical need that both parties have for certainty in respect of that dispute.[29]In so deciding, I make no criticism of INQ for having issued a Part 8 claim or for developing its factual matrix table. Nor do I criticise anything done on behalf of KX. I have not had to consider whether INQ’s preferred approach would have been preferable had the parties agreed to work collaboratively in producing a factual matrix table, or to conveniently define and narrow other issues between themselves by a method other than exchanging pleadings. Rather, I have focussed on the totality of the circumstances as they appear today, and selected what seems to me to be the most appropriate route for the proceedings in those circumstances.[30]That is my judgment and I will now hear submissions from the parties on consequential directions.