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Home > Legal & Regulatory docs.

Kayat Trading Ltd v Genzyme Corp before the Courts of Cyprus - Greek - 2005-2018

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Country
  • Cyprus
  • United Kingdom
  • United States
Year

2018

Summary

Respondent, Genzyme Corp, was a biotechnology and pharmaceutical corporation having its seat at Cambridge, Massachusetts, United States. It assigned to applicant, Kayat Trading Ltd, a company incorporated in Cyprus, the distribution of melatonin with the trademark MelaPure in various countries.

In April 1997 MelaPure was registered as an authorized drug in Ukraine and on July 15, 1997 an agreement was signed between Kayat Trading Ltd and Genzyme Corp in Cyprus. It was agreed that Kayat Trading Ltd would be the exclusive distributor of MelaPure in a number of countries such as Ukraine and the Russian Federation. Transactions between the contracting parties were taking place though a branch and / or dependent company and / or associate of Genzyme Corp in London. During 1997 and 1998 Kayat Trading signed a number of agreements with Ukrainian companies for appointment of sub-distributors and the sale of MelaPure.

Disputes arose and applicant filed a law suit before the District Court of Nicosia that heard the dispute that arose from the agreement and applied the applicable law as agreed in the agreement, that being the Law of the States of Massachusetts. Applicant purported that respondent by failing to deliver timely or deliver the ordered quantities or by delivering goods that did not match the prescriptions set out in the agreement or the registration in Ukraine, breached the agreement, perpetrated fraud and violated the Racketeer Influenced and Corrupt Organisations Act, 18 U.S.C.

Respondent objected to the case being heard by a Court in Cyprus as Cyprus was not forum conveniens. The District Court of Nicosia found that at that stage it could not decide on the jurisdiction of the Courts of Cyprus and reach a final conclusion. Thus, it dismissed the objection (District Court of Nicosia Civil Case No. 7462/2002, interim judgment of March 31, 2004 - not publicly available). Respondent appealed the interim judgment. The Supreme Court of Cyprus found that this kind of interim judgments could not be appealed as it was not shaping or declaring rights of the parties (Supreme Court of Cyprus Civil Appeal No. 11995, judgment of June 14, 2005).

Applicant wished to submit depositions taken in the United States by a court reporter as evidence at the litigation proceedings. The District Court of Nicosia dismissed them, as they were voluminous and with a great number of exhibits and did not specify what constituted undisputed facts, declaration against its interests and hearsay evidence (District Court of Nicosia Civil Case No. 7462/2002, interim judgment of February 8, 2010 - not publicly available). Respondent appealed the interim judgment. The Supreme Court of Cyprus agreed with the trial court while stressing that procedural matters would be decided solely according to law of Cyprus (Supreme Court of Cyprus Civil Appeal No. 382/2010 - judgment of December 28, 2011).

Applicant wished to submit evidence in the form of expert report to the purpose of proving special damages. The District Court of Nicosia did not allow it, as special damage needed to had been set out in detail in the pleadings and this had not been done (District Court of Nicosia Civil Case No. 7462/2002, interim judgment of June 10, 2011). Respondent's appeal was not successful (Supreme Court of Cyprus Civil Appeal No. 275/2011, judgment of July 27, 2012).

Applicant wished to amend its pleadings for the purpose of setting out the details of special damage. The District Court of Nicosia dismissed the application (District Court of Nicosia Civil Case No. 7462/2002, interim judgment of January 20, 2012). The Supreme Court of Cyprus in view of the interest of justice and the good faith of the applicants allowed the appeal and dismissed the interim judgment (Supreme Court of Cyprus Civil Appeal No. 58/2012 - judgment of March 3, 2013). Genzyme Corp asked for this matter to be tried before the Supreme Court of Cyprus at a full planetary session as the principles of natural justice and fair trial had been breached due to the Supreme Court having received documentation from Kayat Trading Ltd that Genzyme Corp had not. This documentation consisted of letters requesting prompt judgment and under this pretense setting out opinion on the merits of the case. The Supreme Court of Cyprus at a full planetary session condemned these incidents, but as the independence of the Supreme Court of Cyprus was not questioned, it rejected the application (Supreme Court of Cyprus Civil Appeal No. 58/2012, judgment of June 14, 2013).

Applicant wished to have an expert witness testifying before the District Court of Nicosia and submit his report as evidence. The Court did not allow that, as it was not convinced from his qualifications (graduate in medicine having medical specialty in pathology, years of teaching medicine and member of the Ukrainian Science Society for Therapy) that he qualified as an expert witness on sales of the drug in question in Ukraine . It further did not allow the report to be presented, as it was signed by another member of the Ukrainian Science Society for Therapy. Moreover, it noted that it was no report, but merely a letter stating that the research was concluded, setting out its results, presenting the perspectives of selling the drug and including proposals for advertising it (District Court of Nicosia Civil Case No. 7462/2002, interim judgment of October 7, 2010 - not publicly available). The appeal was not successful (Supreme Court of Cyprus Civil Appeal No. 316/2010 - judgment of February 21, 2013).

The District Court of Nicosia, twelve years after the law suit was filed and four years after the hearing was initiated, which included twenty witnesses and 273 exhibits, made the following findings. With reference to jurisdiction, it found that it was forum convenience, as Respondent had failed to prove why Cyprus was not. It also found that a fair trial was held, despite of the facts of the case having taken place in 1996 and 1997, as Respondent neither alleged nor substantiated that this delay negatively affected its rights or its defense. Turning to the merits, it applied the Law of the State of Massachusetts and found that the agreement in question was an agreement of exclusive distribution of products and that Genzyme Corp. had breached it. However, it did not find that Respondent had perpetrated fraud under Chapter 93A of the General Laws of Massachusetts, as no action took place mainly at the State of Massachusetts. Finally, it did not apply the Racketeer Influenced and Corrupt Organizations (RICO) Act as a commercial agreement and dispute as the present one, did not fall under the scope of the RICO Act. It assessed the damages from breaching the agreement to USD 4,178,400 plus legal interest (District Court of Nicosia Civil Case No. 7462/2002, final judgment of May 30, 2014).

Both Genzyme Corp and Kayat Trading Ltd appealed the final judgment. With reference to the appeal of Genzyme Corp, the Supreme Court of Cyprus accepted the reason regarding legal interest. It ordered that damages bear interest since the date of the final judgment. It dismissed all other reasons. The appeal that Kayat Trading Ltd filed was dismissed in its entirety (Supreme Court of Cyprus Civil Appeal Nos 199/2014 and 200/2014, judgment of May 25, 2018).

Included in this document:

Genzyme Corp v. Kayat Trading Ltd, Supreme Court of Cyprus Civil Appeal No. 11995

  • judgment of June 14, 2005

Kayat Trading Ltd v. Genzyme Corp, Supreme Court of Cyprus Civil Appeal No. 382/2010

  • judgment of December 28, 2011

Kayat Trading Ltd v. Genzyme Corp, Supreme Court of Cyprus Civil Appeal No. 275/2011

  • judgment of July 27, 2012

Kayat Trading Ltd v. Genzyme Corp, Supreme Court of Cyprus Civil Appeal No. 316/2010

  • judgment of February 21, 2013

Kayat Trading Ltd v. Genzyme Corp, Supreme Court of Cyprus Civil Appeal No. 58/2012

  • judgment of March 4, 2013
  • judgment of June 14, 2013 incl. dissenting

Kayat Trading Ltd v. Genzyme Corp, District Court of Nicosia Civil Case No. 7462/2002

  • interim judgment of July 10, 2008
  • interim judgment of June 10, 2011
  • interim judgment of January 20, 2012
  • interim judgment of December 17, 2012
  • final judgment of May 30, 2014

Genzyme Corp. v. Kayat Trading Ltd & Kayat Trading Ltd v. Genzyme Corp, Supreme Court of Cyprus, Civil Appeal Nos 200/2014 and 199/2014

  • final judgment of May 25, 2018

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