ECLI:NL:GHAMS:2024:131

Uitspraak

AMSTERDAM COURT OF APPEAL

Netherlands Commercial Court of Appeal

Case number: 200.334.272 (expedited appeal)

Judgment given on 19 January 2024 in summary proceedings

in the case of:

the Dutch cooperative

COÖPERATIEVE FEDERATIE VAN EDELPELSDIERENHOUDERS NEDERASSELT U.A.,

Heumen, The Netherlands,

claimant in appeal,

lawyer: R. van Boekel,

against

the French legal entity

CEVA SANTÉ ANIMALE S.A.,

Libourne, France,

defendant in appeal,

lawyers: G.W. van der Bend and S. Nagy.

The parties are referred to below as CFE and Ceva.

1.The procedure

1.1.

In addition to the file of first instance, the following documents have been submitted to the Court in digital form via eNCCA:

the writ of summons, asking for an expedited appeal and advancing the grounds of appeal, dated 30 October 2023, including the exhibits submitted in first instance,
the statement of defence in appeal, dated 11 December 2023, including the exhibits nos. 46 to 73 inclusive and two additional exhibits,
additional exhibits submitted by CFE nos. 31 to 35 inclusive.

1.2.

The case was heard on 21 December 2023. CFE was represented by the lawyer R. van Boekel mentioned above, and by Person 1 and Person 2. Ceva was represented by the lawyers G.W. van der Bend and S. Nagy mentioned above, and the lawyer M.C. Eren and Person 3. The pleading notes and the court record of the hearing are part of the case file. The parties agreed to mediation following the hearing but no settlement was reached, and the parties have asked the Court to give judgment.

2.The facts

2.1.

CFE is a Dutch umbrella organisation for mink breeders. CFE engages in the

distribution and sale of mink vaccines against fatal diseases.

2.2.

Ceva is a multinational animal health company. It develops and distributes animal health solutions for veterinarians, farmers and pet owners.

2.3.

Until 2020, CFE, together with Biovet/Scanvet, owned a facility for the

production of mink vaccines in Verona, Wisconsin, U.S.A. (the Verona Facility). Prior to the construction of the Verona facility, CFE co-owned a production facility for mink vaccines in Fitchburg, Wisconsin, U.S.A. The vaccines from this latter facility were sold and distributed by CFE and Biovet/Scanvet in Europe, the United States and Canada. However, following US Chapter 11 proceedings in 2020, the Verona Facility was sold to Ceva.

2.4.

Effective 22 March 2020, a Contract Manufacturing Agreement (the CMA) was concluded by, amongst others, Ceva, its affiliate company Biomune and CFE. The CMA provides for the contract manufacturing of mink vaccines to the order of CFE in accordance with certain procedures and in accordance with a certain pricing scheme. Ceva accepted all obligations of Biomune under the CMA as its own obligations and it agreed that it is jointly and severally liable for all obligations of Biomune (Article 15).

Article 16.1 declares Dutch law applicable and Article 16.2.(b) designates the Netherlands Commercial Court as the competent court.

2.5.

Mink vaccines are required in June/July for newly born minks. A smaller amount is needed in January for female minks prior to being inseminated for the next breeding generation. The relevant mink vaccine produced in the Verona Facility is Distemink.

2.6.

For the year 2022 CFE ordered 2,600,000 ml of Distemink to be delivered in

May 2022. This order was accepted by Ceva, but only 737,500 ml was actually delivered in June 2022.

2.7.

At various moments CFE ordered, and amended its orders, for different amounts of doses (1 dose = 1 ml) of Distemink for delivery in 2023.

2.8.

On 15 September 2022 CFE wrote to Ceva in an e-mail:

“
We are in constant contact with our distributors and understood that US/Canada needs 2 million doses of Distemink for 2023. So, we want to order 2 million extra doses of Distemink. We still want to keep 3 million doses on hold.”

Ceva replied on the same day as follows:

“
I confirm that Ceva Verona can produce 6 million doses of Distemink for 2023.

As discussed with you over the phone today, beyond the order for 3 million doses as stated in your email below, please confirm a firm order for 4 million doses (3 million from your order below + 1 million more) and I can then plan a production of 2 million at risk to manage the extra orders you may have for delivery in 2023. Without this confirmation, Verona will only produce 3 million doses for delivery in 2023.”

2.9.

The requested confirmation was given by CFE on 19 September 2022:
“I confirm that we will order 4 million doses Distemink for delivery 2023”. Ceva answered the same day:
“Thank you for the confirmation”.

2.10.

In March 2023, CFE ordered an additional 2 million doses of Distemink for delivery in May 2023.

2.11.

In or around May 2023, Ceva delivered 1,051,500 ml of Distemink to CFE.

2.12.

On 12 July 2023 CFE wrote to Ceva in an e-mail:
“Enclosed I sent you the Distemink order for 2024. Already on June 28th 2023 we informed you that we need at least 6.000.000 doses of Distemink. Please confirm this order.”

2.13.

Ceva replied on 13 July 2023 by e-mail as follows:
“Thank you for the order of Distemink. However, I can not accept this order as the price stated (99.00 USD) is not an agreed price between Ceva and CFE.

Under these circumstances, I am afraid Ceva will not deliver Distemink in 2024.”

2.14.

Following the judgment in first instance, Ceva delivered approximately 1,684,000 ml of Distemink to CFE in December 2023, of which 1,384,000 ml was intended for the EU.

3.The claim

3.1.

CFE filed its case with the Court in Summary Proceedings in the NCC seeking an order against Ceva to comply with the CMA and to provide CFE with 10,948,500 ml of Distemink. On 2 October 2023, the Court in Summary Proceedings in the NCC ordered Ceva to deliver 1,500,000 ml of Distemink and dismissed all other claims.

3.2.

In appeal, CFE now asks the NCC Court of Appeal (the Court):

- to set aside the judgment of the NCC District Court in summary proceedings dated 2 October 2023, except for the order under 5.1 and the declaration under 5.2;

- and subsequently:

a. a) to order Ceva to comply with the CMA and the individual purchase agreement(s) ensuing therefrom, which implies, in particular, that Ceva delivers to CFE, or at least ensures that Biomune delivers to CFE, 3,448,500 ml of Distemink as soon as possible but no later than 1 June 2024, subject to a penalty of a payment of EUR 50,000.--, or at least a penalty to be determined by the Court, for each day or part thereof that Ceva fails to comply with the aforementioned obligation after service of the judgment on Ceva,

b) to order Ceva to comply with the CMA, which implies, in particular, that Ceva, no later than within 14 days after service of the judgment on Ceva, confirms in writing to CFE, or at least ensures that Biomune confirms in writing to CFE:

i. CFE's purchase order dated 12 July 2023 regarding 6,000,000 ml of Distemink required for 1 June 2024 at a unit price of USD 99;

ii. in the alternative, delivery of 6,000,000 ml of Distemink no later than 1 June 2024 at a unit price of USD 101.63,

iii. or delivery of 6,000,000 ml of Distemink at a such date and unit price as to be determined by the Court, or

iv. to order Ceva to provide valid reasons for its rejection of CFE's purchase order dated 12 July 2023 and to state the terms it requires for accepting the order, which terms will have to comply with the CMA,

v. and all the above subject to payment of a penalty of EUR 50,000 in respect of each obligation separately, or at least a penalty as to be set by the Court, for each day or part thereof that Ceva fails to comply with the order after service of the judgment on Ceva,

- to order Ceva to pay to AKD within fourteen (14) days of service of the judgment the costs of the proceedings in both instances, including the costs following judgment, having assessed the fees of CFE's lawyer, and, in so far as payment of these costs are not made in time, with a ruling that these costs be increased with statutory interest.

4.The considerations

Jurisdiction and applicable law

4.1.

The Court in Summary Proceedings in the NCC has jurisdiction following the choice of court in Article 16.2.b. of the CMA. The Court now has jurisdiction being the NCC Court of Appeal. By virtue of the choice of law in Article 16.1 of the CMA, Dutch law applies. The United Nations Convention on Contracts for the International Sale of Goods (CISG) applies, as the CMA concerns the sale of goods and both parties reside in contracting states to the Convention. This is common ground.

Relevant legal framework

4.2.

CFE seeks an order for specific performance as an interim measure. In these summary proceedings such an interim measure can be given, provided that (1) CFE has an urgent interest, (2) the existence of CFE’s claims is sufficiently plausible on the merits, and (3) on a balance of interests, Ceva’s interests have enough weight to justify the interim measure. And, of course, no order can be given to do what cannot be done.

Scope of the appeal

4.3.

CFE has not appealed against the order in first instance for Ceva to provide 1,500,000 ml of Distemink. That order is therefore not subject to this appeal and Ceva has delivered the Distemink accordingly. In this appeal, CFE challenges the ruling in first instance to dismiss all its other claims, together with the ruling that the parties bear their own legal costs. Thus, CFE’s first objective now is that the Court will order CFE to deliver 3,448,500 ml of Distemink, being the part of its order of 6 million ml for 2023 that has not been delivered.

4.4.

Ceva opposes CFE’s appeal, arguing in essence that CFE’s claims do not meet the requirements for an interim measure as set out under 4.2. above.

4.5.

CFE’s claims relate to deliveries of Distemink for mink farmers based in both the EU and in North America (the US and Canada), each with different regulatory requirements. As Ceva has based its defence, among other arguments, on regulatory impediments, the Court will assess separately, first for the EU and then for North America, whether such requirements indeed prohibit the delivery of Distemink, either legally or for practical reasons.

4.6.

It is undisputed that following the order, Ceva delivered approximately 1.4 million ml of Distemink destined for the EU to CFE in December 2023. According to Ceva, this was its existing stock produced in 2022, which is now used up. There are no indications that this may not be true and CFE has not provided reasons to assume otherwise. Distemink deliveries will therefore have to originate from new batches produced in 2023 and 2024.

4.7.

However, both parties accept that the lyophilisation cycle in the production of the new batches of Distemink has changed. Therefore, these are no longer in accordance with the regulatory accepted method detailed in the “Market Authorisation Dossier” of Distemink for the EU (the EU Dossier). To comply with EU regulations, and thus for new batches of Distemink being allowed in the EU, a so-called “variation” of the EU Dossier must be applied for. This must be done by CFE’s subsidiary UVH, being the Market Authorisation Holder of Distemink in Europe, but UVH has not done so. CFE says that this is because Ceva has not provided the necessary documentation for UVH to file the application. However, there is nothing that supports the argument that the filing requires documentation from Ceva that it has refused to provide, nor that CFE has ever asked Ceva for any missing documentation in this respect. It may therefore be assumed that UVH can apply for the variation.

4.8.

Nevertheless, within the framework of these summary proceedings and the request for an interim measure, this debate is moot, as obtaining a variation of the EU Dossier will in any event take at least several months, and the production process cannot be accelerated. In addition, Ceva has also explained, undisputed by CFE, that in applying successfully for a variation, certain changes in the production method may be required. Consequently, Ceva cannot be expected to produce batches of Distemink for the EU in anticipation, risking that these become obsolete in view of possible new production requirements. There is no obligation under the CMA for Ceva to do so.

4.9.

For these reasons, the Court at present finds that delivery to CFE of Distemink produced by Ceva for use in the EU is most likely not feasible in the near future. An immediate measure in this respect can therefore not be given.

North America

4.10.

CFE argues that its order of 15 September 2022 for 2,000,000 ml of Distemink, intended for North America was confirmed and accepted by Ceva and thus that Ceva must carry out this order. Ceva refuses, saying that CFE did not submit this order in its own name, but instead acted on behalf of a US Reseller. According to Ceva, pursuant to the order, only the US Reseller may have a claim. Ceva further holds that the US Reseller does not support CFE’s claim.

4.11.

As to this, CFE has explained that in previous instances where it bought on behalf of the US Reseller, it had said so explicitly in the orders. To this end, CFE presented a purchase order dated 4 May 2021 in which it clearly mentioned the US Reseller “MVCRS” under the heading “
Invoice to”, and its addresses in Wisconsin under the heading “
Ship to”. In the present order of 15 September 2022, CFE mentioned its own name. CFE also explained that the CMA originally designated the company United Vaccine Distribution NewCo Inc. as the party with exclusive rights for resale in North America. This company was indirectly owned in part by CFE, but has since been dissolved. Subsequently, CFE “stepped up” as a reseller for the North American market. Ceva confirmed this during the hearing. The Court follows CFE’s reasoning that since then it was accepted that CFE could not only purchase Distemink for North America on behalf of a US Reseller but also in its own name for resale in that region. Furthermore, submitting orders simply by e-mails, specifying the target market later, seems to have been a common practice between the parties.

The agreed lead time of twelve (12) months from the order, an issue raised by Ceva, is no longer a relevant argument, since the order was submitted long ago (in September 2022). For these reasons, the Court finds at present that in respect of the order of 15 September 2022, CFE intended to act on its own behalf and Ceva ought to have understood that this was so, constituting under Dutch law a binding agreement between CFE and Ceva, and, by virtue thereof, that CFE may well have a claim on the merits for delivery of the ordered Distemink intended for the North American market. Whether MVCRS supports CFE’s claim or not is of no significance in this respect.

Urgent interest

4.12.

CFE has an urgent commercial interest: the CMA defines the vaccination season as from May to July. The vaccination season of 2024 is therefore approaching and CFE will need to be able to inform its customers. The Court is not convinced that an alternative to Distemink is readily available as Ceva has argued. Ceva stated this at the hearing, but it did not provide the Court with supporting details or evidence and CFE denied Ceva’s assertion. Given these circumstances, CFE has an urgent interest in specific performance of the order of Distemink for the North American market.

Feasible

4.13.

Delivery is clearly not impossible for Ceva. Ceva explicitly stated that there are no impediments, regulatory or practical, to providing the US Reseller and the mink farmers in North America with the vaccines they require. Ceva also stated that the US Reseller has not yet submitted a “firm order” and this implies that the Distemink already produced in 2023 is available for delivery to CFE and that the US Reseller has not yet received any Distemink for the vaccination season of 2024. It also follows from Ceva’s statements at the hearing, that it is capable of producing and supplying the volumes of Distemink for the North American market to be awarded in this judgment before 1 June 2024.

Balance test

4.14.

The Court finds that the commercial interest of CFE in receiving the Distemink ordered on 15 September 2022 within the coming months outweighs Ceva’s concern that new prices should be agreed first. According to Ceva, prices had been agreed for 2022 and 2023, but if new batches of Distemink will have to be delivered in 2024, price negotiations for that year should be initiated beforehand. However, the Court understands that following CFE’s order in its e-mail of 15 September 2022, Ceva offered to produce 6 million doses of Distemink, without mentioning any increase in costs or price. Furthermore, in these proceedings, Ceva has not given any details regarding its production costs. Ceva has merely taken the position that a much higher price would result if the actual market circumstances were to be taken into account, in accordance with the provisions of the CMA for agreeing a new price. Ceva stated that its costs have risen significantly and that it produces Distemink at a loss, but it has not submitted any verifiable financial information to support a necessary price increase. And even if it were true that CFE’s profit margins may have increased by 1150%, as Ceva argues, such would not in itself be a sufficient reason to deny the requested interim measure. The Court is therefore at present of the view that the prices agreed for 2023 apply, being the year in which Ceva was to have delivered the Distemink ordered in September 2022. These summary proceedings concern an interim measure regarding the contractual delivery of Distemink only. Agreement on price appears not to be a preliminary obstacle for an interim measure in this respect. The price can be agreed later, or if necessary be settled in proceedings on the merits.

4.15.

The parties agree that between 1,500,000 ml and 2,000,000 ml of Distemink will be needed for the coming vaccination season in North America. The Court will order Ceva to deliver 1,700,000 ml of Distemink to CFE, being the Court’s best estimate of CFE’s need for the upcoming vaccination season of 2024.

Penalty

4.16.

To ensure that Ceva will comply, the Court will give the order to deliver the Distemink destined for the US subject to a penalty, as given in the decision. The Court will set a maximum that it considers a sufficient incentive.

US: 2024 order

4.17.

Given that Ceva will be ordered to deliver 1,700,000 ml of Distemink for the North American market to CFE for the vaccination season of 2024, CFE has not shown any urgent interest at present in an additional delivery of its 2024 order for North America. All issues concerning this order, including the debate about the acceptance by Ceva and the ability of Ceva to produce the requested amount, may therefore be left aside for the time being.

Other claims

4.18.

CFE has equally not shown an urgent interest in its other claims to order Ceva to comply with the CMA. All related disputes, including the declaratory nature of these claims, may therefore be left aside as well.

Conclusion

4.19.

The judgment of the Court in Summary Proceedings in the NCC will be set aside in part. The Court will order Ceva, as an interim measure and in addition to the order given in first instance, to deliver to CFE 1,700,000 ml of Distemink for the North American market by 1 June 2024. Apparently, both parties expect Biomune to arrange for the delivery. Ceva has not denied that it is in a position to have Biomune do what is necessary in this respect.

Costs

4.20.

In these appeal proceedings CFE claims 9,448,500 ml of Distemink. The delivery of 1,700,000 ml of Distemink will be ordered. Therefore, as in first instance, CFE’s claims are partially awarded and for the other part dismissed. As each of the parties has thus been successful in part, and applying Dutch procedural law, the Court will award no costs, but rule, as in first instance, that the parties are to bear their own costs.

As appropriate, the interim measure given will be enforceable notwithstanding any remedy.

5.The decision

The NCC Court of Appeal:

- sets aside the judgment of the NCC District Court in Summary Proceedings dated 2 October 2023, except for the orders given under 5.1., 5.2., and 5.3. of that judgment,

- orders Ceva to deliver to CFE, or to ensure that Biomune delivers to CFE,

1,700,000 ml of Distemink for the North American market no later than 1 June 2024, and this, provided that this judgment will first have been served on Ceva, subject to a penalty payment of EUR 10,000 for each day or part thereof that Ceva fails to comply with this order, with a maximum of EUR 1,000,000,

- declares this judgment to be enforceable notwithstanding any remedy,

- rules that the parties bear their own legal costs and expenses in connection with

these summary proceedings in appeal,

- denies all other claims.

Done by D.J. Oranje, P.F.G.T. Hofmeijer-Rutten and S.C.H. Molin, appeal judges, assisted by E.J. Van Veelen, Clerk of the Court.

Issued in public on January 19, 2024.

APPROVED FOR DISTRIBUTION IN eNCC

SIGNATURE PAGE 1 OF 2

D.J. ORANJE

(PRESIDING JUDGE)

SIGNATURE PAGE 2 OF 2

(CLERK OF THE COURT)