Interim Injunctions - AutoStore Technology AS v Ocado Group Plc
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This was an application by Ocado Plc, several of its subsidiaries and a supplier of equipment to the Ocado companies ("Ocado") for an interim injunction to restrain AutoStore Technology AS ("AutoStore") from disclosing an allegedly confidential and privileged document to the US International Trade Commission. The document had been delivered to Ocado in "without prejudice" negotiations to settle various disputes between the parties.
In the proceedings before the Commission, AutoSrore alleged that Ocado had infringed several of its US patents. Ocado pleaded that AutoStore was estopped from alleging infringement on the ground that AutosSrore had previously assured Ocado that Ocado had not infringed those patents. AutoStore claimed that the document in issue contradicted the alleged assurance. It would therefore undermine the estoppel defence.
The hearing at which Autostore intended to place the document before the Commission was to take place on 15 June 2021. On 28 May 2021, Ocado applied to Judge Hacon for a without notice injunction to restrain the disclosure. The learned judge granted the injunction until11 June 2021 and ordered a full hearing of Ocado's application to take place before him on that day. A "without notice" hearing is a hearing for which the applicant has not given the respondent at least 3 clear days notice as required by CPR 23.4, There are, however, certain circumstances in which an application can be made without notice and these are listed in para 3 of Practice Direction 23A. One of those circumstances is where there is exceptional urgency. Where an order is made without notice, the judge will nearly always allow the respondent an opportunity to challenge the continuation of the relief at a hearing at which all parties will be present.
At the hearing on 11 June 2021, Judge Hacon decided not to extend the injunction. He set out his reasons in his judgment in AutoStore AS v Ocado Group Plc and others [2021] EWHC 1614 (Pat).
The learned judge directed himself at para [27] of his judgment that if he was to renew the injunction sought by Ocado, he had to be satisfied that Ocado had a sufficient case on the merits under one or both of its pleaded heads, namely breach of contract and breach of confidence. If he was so satisfied, he had to go on to consider the balance of irreparable harm, the balance of convenience and, if necessary, the status quo. Usually, it is enough for the applicant to satisfy the judge that there is a serious question to be tried. Both parties agreed that the judge should have regard to the underlying merits of the parties' respective cases as his decision would determine the issue.
The judge noted at [33] that if he renewed the injunction, that would be decisive of the point in dispute because the Commission would not be made aware of the document in issue. On the other hand, if he declined to make an order, Ocado would still have an opportunity to persuade the American tribunal not to admit the document into evidence for the same reasons that it sought an injunction in England.
The judge noted at [33] that if he renewed the injunction, that would be decisive of the point in dispute because the Commission would not be made aware of the document in issue. On the other hand, if he declined to make an order, Ocado would still have an opportunity to persuade the American tribunal not to admit the document into evidence for the same reasons that it sought an injunction in England.
AutoStore contended that a renewal of the injunction would interfere with its freedom of expression under s.12 of the Human Rights Act 1998. The learned judge considered Cream Holdings Ltd and others v. Banerjee and others [2004] UKHL 44, [2004] 3 WLR 918, [2004] UKHRR 1071, [2004] 4 All ER 617, 17 BHRC 464, [2005] AC 253, [2005] 1 AC 253, [2004] HRLR 39, [2005] EMLR 1, S v A [2018] EWHC 2144 (Ch) (17 July 2018) and Awbury Technical Solutions LLC v Karson Management (Bermuda) Ltd [2019] WLR(D) 75, [2019] EWHC 233 (Comm), [2019] Bus LR 559. He said at [46] that Mr Justice Butcher was of the view in Awbury that s.12 (3) of the Human Rights Act was directed to threatened publications in the sense of being made available to the wider public and that where the communication was to be made to a limited number of recipients in confidence s.12 (3) did not apply. Reconciling Mr Justice Butcher's decision with Mr Justice Henry Carr's in S v A Judge Hacon noted in S v A that the evidence was to be disclosed to the public. In the case before him, the document in issue would be subject to a protective order. There was, therefore, no public interest in its disclosure and therefore s.12 (3) would not be engaged.
AutoStore also argued that it was neither pleaded nor suggested by Ocado that the implied agreement on which Ocado relied was subject to the exclusive jurisdiction of the English courts and that was fatal to Ocado's application since absent such a clause, there was no basis for Ocado's insisting that the question of the breach of contract must be decided by the courts of England and may not be decided by the ITC. Judge Hacon disagreed. In his view, the matter could be decided by either tribunal.
Finally, AutoStore contended that Occado's application was tantamount to one for an anti-suit injunction. It referred the judge to para [38] of the judgment of Mrs Justice Cockerill in Times Trading Corporation v National Bank of Fujairah (Dubai Branch) [2020] EWHC 1078 (Comm), [2020] Bus LR 1752, [2020] 2 Lloyd's Rep 317 in which she set out the principles governing such relief. His Honour did not believe the parallel to be exact. He said at [53]:
"An injunction in the form sought by Ocado would not restrain proceedings before the ITC. On the other hand, it would have the potential to interfere with the conduct of those proceedings. The question of whether AutoStore is entitled to rely on the Document in Issue is a matter which would come before the ITC judge unless this court grants the injunction sought. The Document in Issue is potentially relevant to an issue which the ITC judge will be required to determine. Therefore, the grant of the injunction sought would, in that sense, interfere with the conduct of foreign proceedings. It seems to me that I must therefore approach Ocado's application with circumspection."
AutoStore also argued that it was neither pleaded nor suggested by Ocado that the implied agreement on which Ocado relied was subject to the exclusive jurisdiction of the English courts and that was fatal to Ocado's application since absent such a clause, there was no basis for Ocado's insisting that the question of the breach of contract must be decided by the courts of England and may not be decided by the ITC. Judge Hacon disagreed. In his view, the matter could be decided by either tribunal.
Finally, AutoStore contended that Occado's application was tantamount to one for an anti-suit injunction. It referred the judge to para [38] of the judgment of Mrs Justice Cockerill in Times Trading Corporation v National Bank of Fujairah (Dubai Branch) [2020] EWHC 1078 (Comm), [2020] Bus LR 1752, [2020] 2 Lloyd's Rep 317 in which she set out the principles governing such relief. His Honour did not believe the parallel to be exact. He said at [53]:
"An injunction in the form sought by Ocado would not restrain proceedings before the ITC. On the other hand, it would have the potential to interfere with the conduct of those proceedings. The question of whether AutoStore is entitled to rely on the Document in Issue is a matter which would come before the ITC judge unless this court grants the injunction sought. The Document in Issue is potentially relevant to an issue which the ITC judge will be required to determine. Therefore, the grant of the injunction sought would, in that sense, interfere with the conduct of foreign proceedings. It seems to me that I must therefore approach Ocado's application with circumspection."
A submission from AutoStore that did impress the judge was:
"that the threshold test for an injunction is not whether there is a serious question to be tried, but whether Ocado has a high probability of succeeding at trial (see para. 38(vi) of Times Trading). I think Mr Flynn is right about this. Especially since the grant of the interim injunction sought would in practice be final in its effect, preventing the ITC from hearing evidence about the Document in Issue, I take the view that I should not grant the injunction unless I am satisfied that there is a high degree of probability that Ocado would succeed at trial, on the hypothesis that there were to be a trial of this issue."
Judge Hacon considered the evidence before him and decided at [68] that Ocado's case did not satisfy the threshold requirement for the grant of an interim injunction on the facts and on the evidence before him. He added at [69] that even if the threshold requirement had been satisfied, he would still have to consider the balance of irreparable harm. He concluded at [74]:
"It may be that if the ITC judge were to admit the Document in Issue, Ocado's case before the ITC would suffer. But in my view, Ocado is not entitled to rely on damage caused to it by the prevention of a procedural injustice. I therefore take the view that the balance of irreparable harm falls clearly in favour of there being no grant of an interim injunction."
I have commented on this case because it is a rare departure from the procedure set out by Lord Diplock in his speech in American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504, [1975] UKHL 1, [1975] AC 396, [1977] FSR 593, [1975] 2 WLR 316. It is however puzzling as to why he bothered because he could easily have decided the application in the traditional way by deciding that there was clearly a serious issue to be tried and then proceeding to the balance of risk of irreparable harm. Rule 408 of the Federal Rules of Evidence would appear to enable Ocado to make all the arguments in the USA that it had made in England and the American tribunal would be in a better position to do justice in the cause before it.
Anyone wishing to discuss this article or any of the issues arising in it is welcome to call me on +44 (0)20 7404 5252 during office house or to send me a message through my contact form.
"that the threshold test for an injunction is not whether there is a serious question to be tried, but whether Ocado has a high probability of succeeding at trial (see para. 38(vi) of Times Trading). I think Mr Flynn is right about this. Especially since the grant of the interim injunction sought would in practice be final in its effect, preventing the ITC from hearing evidence about the Document in Issue, I take the view that I should not grant the injunction unless I am satisfied that there is a high degree of probability that Ocado would succeed at trial, on the hypothesis that there were to be a trial of this issue."
Judge Hacon considered the evidence before him and decided at [68] that Ocado's case did not satisfy the threshold requirement for the grant of an interim injunction on the facts and on the evidence before him. He added at [69] that even if the threshold requirement had been satisfied, he would still have to consider the balance of irreparable harm. He concluded at [74]:
"It may be that if the ITC judge were to admit the Document in Issue, Ocado's case before the ITC would suffer. But in my view, Ocado is not entitled to rely on damage caused to it by the prevention of a procedural injustice. I therefore take the view that the balance of irreparable harm falls clearly in favour of there being no grant of an interim injunction."
I have commented on this case because it is a rare departure from the procedure set out by Lord Diplock in his speech in American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504, [1975] UKHL 1, [1975] AC 396, [1977] FSR 593, [1975] 2 WLR 316. It is however puzzling as to why he bothered because he could easily have decided the application in the traditional way by deciding that there was clearly a serious issue to be tried and then proceeding to the balance of risk of irreparable harm. Rule 408 of the Federal Rules of Evidence would appear to enable Ocado to make all the arguments in the USA that it had made in England and the American tribunal would be in a better position to do justice in the cause before it.
Anyone wishing to discuss this article or any of the issues arising in it is welcome to call me on +44 (0)20 7404 5252 during office house or to send me a message through my contact form.
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