HT-2021-000363 - [2025] EWHC 532 (TCC)

IBM’s case is that the defendants combined with each other to achieve the common end of developing the SDM using unlawful means, namely, breaches of the ICA by Winsopia and procurement of such breaches by the other defendants. It is said that the combination was entered into with the intention to injure the claimant, by developing a competitor product which would damage the claimant’s mainframe business, the defendants undertook concerted action consequent upon the combination, knowing that the breaches and procurement of such breaches were unlawful, and the claimant suffered damage as a result of the conspiracy.

The defendants’ position is that none of the necessary elements of the tort have been established and IBM’s case fails on both the evidence and the law. The case is entirely dependent on the breach and procurement allegations but fails with those allegations. There was no combination or agreement to develop the SDM using material and information extracted from the IBM mainframe software in breach of the ICA. IBM has failed to establish the requisite mental element to found its conspiracy claim based on the procurement case. IBM has failed to establish any causal link between the alleged unlawful acts and the loss alleged to have been caused. There was no intention to injure IBM.

Given my findings on breach of the ICA and unlawful procurement above, this additional claim is of limited relevance to the outcome of the case. However, as it has been addressed by the parties, I consider it briefly below.

The pleaded case is as follows:

44A. Further, the Defendants entered into an unlawful means conspiracy to commit breaches of the ICA and/or procure breaches of the ICA. In particular:

44A.1 The Defendants (and each of them) combined with the other Defendants (and each of them) to achieve the common end of developing the SDM using unlawful means. In summary (and as further particularised above):

44A.1.1 The First Defendant developed and marketed the SDM, using information and material that had been passed to it by the Second Defendant in breach of the ICA, and procured breaches of the ICA.

44A.1.2. The Second Defendant breached the ICA in order to assist the First Defendant in the development of the SDM.

44A.1.3 The Third Defendant developed and marketed, and/or assisted the First Defendant in the development and marketing of, the SDM to third parties, knowing it had been and/or would be developed as a result of the Second Defendant’s breaches of the ICA, and procured breaches of the ICA.

44A.1.4 The Fourth and Fifth Defendants were responsible for the operations of each of the corporate Defendants as set out above, and procured the breaches of the ICA.

44A.1.5 As the (ultimate) beneficial owner and controller of each of the Defendants, it is inferred that the Sixth Defendant took the initial decision to develop the SDM via an unlawful scheme requiring breaches of the ICA by the Second Defendant, and was principally responsible for the development of the scheme to achieve these ends. In any event, he was principally responsible for the execution of this scheme, as the ultimate decision-maker throughout the process of developing the SDM. The Sixth Defendant also procured the breaches of the ICA as set out above.

44A.2 The said unlawful means therefore comprised:

44A.2A Breaches of clauses 4.1.2(b), 4.1.3(a) and 4.13(b) of the ICA by the Second Defendant, as set out at paragraphs 23-28 above; and

44A.2B Procurement of the said breaches by the First and Third to Sixth Defendants, which was itself tortious, as set out at paragraphs 29-34F above. Without the said breaches the SDM could not have been developed, for the reasons set out above at paragraph 27.

44A.3 The said combination was entered into with the intent to injure the Claimant, by developing a competitor product which would damage the Claimant’s mainframe business.

44A.4. The Defendants undertook concerted action consequent upon the combination, as set out above.

44A.5 The Claimant suffered damage as a result of the conspiracy, as further set out below at paragraph 46.2.

44B. To the extent relevant, it is averred that the Defendants knew that the breaches and/or procurement of breaches set out above were unlawful.

44C. In the premises the Defendants (and each of them) is liable for the tort of unlawful means conspiracy for such damage as was caused by the Second Defendant’s breaches of the ICA.”