Pharmaceutical Processing Technology Inc v Sci-Chem International Pty Ltd [2021] NSWSC 1078

Pharmaceutical Processing Technology Inc v Sci-Chem International Pty Ltd [2021] NSWSC 1078

The Court held that there was a serious question to be tried as to the validity of both the 30 June notice (alleged termination for convenience) and 21 July notice (alleged termination for material breach) because the agreement expressly used the word 'perpetual' and there were genuine disputes of fact and construction. The evidence established that if an interim injunction were not granted, the plaintiff would suffer irreparable harm, as any damages awarded could be worthless due to the likely transfer of valuable intellectual property and lack of defendant’s assets. The balance of convenience favoured the plaintiff, as the harm to the plaintiff from refusing the injunction outweighed...

Parties
Plaintiff: Pharmaceutical Processing Technology Inc; Defendant: Sci-Chem International Pty Ltd (ACN 115 411 599)
Jurisdiction
Australia
Judgment Date
27 August 2021
Procedural Posture
Application for Interim Injunction / Interim Measure / Interlocutory / Interim Application
Outcome
Interim injunction granted for a period of 28 days; liberty to apply; plaintiff to provide the usual undertaking as to damages; orders as per [96] of the judgment.
Legal Topics
Interim Injunctions, Arbitration Agreements, Contract Termination, UNCITRAL Model Law, Balance of Convenience
International Arbitration Contract Law Commercial Law Interim Injunctions Arbitration Agreements Contract Termination UNCITRAL Model Law Balance of Convenience

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Parties

Pharmaceutical Processing Technology Inc

Plaintiff

Sci-Chem International Pty Ltd (ACN 115 411 599)

Defendant

Procedural Posture

Application for Interim Injunction / Interim Measure / Interlocutory / Interim Application

Legal Issues

  1. 1 Whether there is a serious question to be tried regarding the validity of notices seeking to terminate the contract
  2. 2 Whether an interim measure (injunction) should be granted pending arbitration under Article 17J of the UNCITRAL Model Law
  3. 3 Whether damages would be an adequate remedy for the plaintiff if the injunction is not granted

Ratio Decidendi

The Court held that there was a serious question to be tried as to the validity of both the 30 June notice (alleged termination for convenience) and 21 July notice (alleged termination for material breach) because the agreement expressly used the word 'perpetual' and there were genuine disputes of fact and construction. The evidence established that if an interim injunction were not granted, the plaintiff would suffer irreparable harm, as any damages awarded could be worthless due to the likely transfer of valuable intellectual property and lack of defendant’s assets. The balance of convenience favoured the plaintiff, as the harm to the plaintiff from refusing the injunction outweighed...

Court Disposition

Interim injunction granted for a period of 28 days; liberty to apply; plaintiff to provide the usual undertaking as to damages; orders as per [96] of the judgment.

Orders

  • Upon the plaintiff giving the usual undertaking as to damages, the defendant is restrained for 28 days or until further order of the Court or the arbitral tribunal from acting on the 30 June and 21 July 2021 notices as valid termination of the Agreement.
  • Liberty to apply on 24 hours' notice during the restraint period.