HT-2022-000043, HT-2022-000363 - [2024] EWHC 1708 (TCC)

This is an application by the Defendant to two related claims arising out of a contract for the supply of Covid-19 lateral flow test kits which was concluded between the Claimants and the Defendant on 6 September 2021 (“the contract”). In order to perform the contract, the Second Claimant (“Santé”) had a sub-contract with a supplier based in Germany called MP Biomedicals Germany GmbH (“Bio”) and Bio in turn had a sub-contract with the manufacturer of the test kits in China, Xiamen Boson Biotech Co Ltd (“Boson”).

The Defendant terminated the contract on account of alleged violations of labour law, health and safety and worker payment obligations in Boson’s factory in China, following an audit conducted on behalf (ultimately) of the Defendant by a firm known as “QIMA”. These violations were alleged to constitute breaches of contract, giving rise to a right to terminate the contract, on account of (a) the goods to be supplied not being in accordance with the terms of the contract, and (b) the Claimants and Boson having providing inaccurate and misleading information when applying to join the procurement pursuant to which the contract was awarded. The Claimants dispute that there was any breach of contract on their part and, as a result, claim damages and interest in excess of £100m for wrongful termination of the contract. There is also a procurement claim, alleging that the Defendant breached the Public Contracts Regulations 2015 by placing additional orders with other suppliers after having terminated the contract, and failing to offer the Claimants the opportunity to compete for further contracts, leading to further loss of profits, which – I apprehend - could run to further tens of millions of pounds.

The application principally concerns whether, as a result of the arrangements between Santé, Bio and Boson, documents in possession of Bio and Boson are to be regarded as within the control of Santé for the purposes of discharging its disclosure obligations. The position reached thus far on disclosure is that Waxman J has ordered extended disclosure primarily on the basis of Model D (narrow, search-based disclosure), with certain categories on the basis of Model C (disclosure of particular documents or narrow classes of documents). The date for standard disclosure is imminent and the Defendant wishes to ensure that relevant material is provided, in particular, from Boson, whose role is central to the key disputes regarding the justification for the Defendant’s termination of the contract. Categories of disclosure set out in the Disclosure Review Document (“DRD”) filed in the proceedings where Boson’s input seems of particular significance include:

The application was originally in two parts but one part no longer falls for determination. That was an application for specific disclosure of contractual documents which the Defendant accepted at the hearing before me should not be granted, on account of the proximity of standard disclosure. What remains is an application for a declaration regarding the scope of the documentation which is within the control of the Claimants for the purposes of their disclosure obligations pursuant to PD57A. The application was reformulated at the hearing by Mr Bowsher KC on behalf of the Defendant, so as to seek:

Originally, part of the declaration sought extended to auditors who had been instructed by the Claimants and/or Bio and/or Boson. Relevant disclosure regarding one such firm of auditors was provided on the eve of the hearing and Mr Bowsher KC submitted, and I accept, that the appropriate course would be to adjourn that part of the application so that the Defendant may consider further whether it needs to be pursued.