Harvard College v NanoString (UPC_CFI_252/2023)
Decision date:
30 October 2023
Osborne Clarke summary
- At the time of the present application, multiple proceedings were pending at the UPC between the parties (and group companies). Pursuant to a judgment from the Munich LD the court issued, amongst other things, a preliminary injunction against Harvard College. At the time of the present application, an appeal was pending at the Court of Appeal against that order.
- Harvard College issued an application for security of costs against Nanostring, arguing that there was a tangible risk that it would not be able to enforce a costs order against Nanostring.
- The Munich CD found that, in line with the Helsinki LD in AIM Sport Vision AG v Supponor and the Munich LD in Edwards Lifesciences Corporation v Meril GmbH, the court has the discretion to order security for legal costs and other expenses incurred and/or to be incurred based on Article 69(4) UPCA and Rule 158.1 RoP. Although Article 69(4) UPCA specifically mentions the cases referred to in Articles 59 to 62 UPCA, according to the Munich CD a security order is not limited to those cases because of the “in particular” wording in Article 69(4).
- Factors to be considered when ordering a security for costs order include: (i) the financial position of the other party that may give rise to a legitimate and real concern that a possible costs order might not be recoverable; and/or (ii) the likelihood that a possible costs order by the UPC may not, or may in an unduly burdensome way, be enforceable. Whether such factors are present and to what extent needs to be established in view of the facts and arguments brought forward by the parties.
- In the present case, Harvard College argued that because Nanostring is located in the UK, this created a risk that it would not be able to enforce a cost reimbursement.
- The court noted that after the UK’s withdrawal from the EU, the recast Brussels Regulation no longer applies in the UK. Consequently, judgments rendered by EU courts will no longer automatically be recognised in the UK as before Brexit (under Article 36(1) of the recast Brussels Regulation). The UK is also not a member of the Lugano Convention or of any other instrument of international law with a similar effect to the best of the court’s knowledge. As a result, the Munich CD considered this to be a factor that weighed in favour of ordering security for costs.
- Harvard College also referred to statements made by Nanostring in other proceedings, which it said gave rise to a legitimate concern that Nanostring would not have adequate financial means to cover the legal expenses that it may be liable for. In response, Nanostring did not provide any evidence of its financial security, merely relying on the cash position of its group of companies. However it was argued (and accepted by the court) that despite the group cash position being in excess of US$100 million, the group had never been profitable. It relied on money from investors and had long-term debts exceeding its cash position.
- The Munich CD ordered Nanostring to provide security for costs in the amount of €300,000. It noted that Harvard College had not provided any information about the actual costs already incurred or that it expected to incur and, therefore, if additional security was required in the future then Harvard College would be able to request it "at any time during the proceedings" as per Rule 158.1 RoP.
Issue
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