Mobile communication

UK court dismisses Vodafone jurisdictional challenge against TOT

The UK High Court has ruled that proceedings between Vodafone and Spanish telecommunications provider TOT can continue. The decision follows a request by Vodafone to delay TOT's claim against the company in the UK, pending the result of a Spanish appeal, on the basis of jurisdiction.

1 February 2021 by Amy Sandys

Vodafone, TOT Vodafone has lost an appeal to stay proceedings brought by TOT at the UK High Court ©alice_photo/ADOBE STOCK

High Court deputy judge Marcus Smith has declared that the court will not stay proceedings between Vodafone and Top Optimized Technologies (TOT). Vodafone had requested a stay, based on jurisdictional grounds as laid out in Article 30 of the Brussels Recast.

Currently, three claims make up the dispute; one in Spain, and two parallel in the UK. In Spain, the proceedings also involve Huawei. All three cases concern EP 19 26 224 B1, which covers an outer-loop power control method and device for wireless communication systems.

Spanish suits

Three years ago, Vodafone and Huawei entered into a non-disclosure agreement with TOT. The latter party then claimed breach of contract by Huawei and commenced proceedings against the telecommunications company in Spain. However, prior to the proceedings in Madrid, Vodafone challenged several of TOT’s claims. It argued the claims were subject to exclusive jurisdictional clauses of UK courts.

Vodafone succeeded in its jurisdictional challenge, with the Madrid Commercial Court declining jurisdiction over the proceedings. As such, TOT only sued Huawei in Spain. In the first decision handed down by the Spanish court, the judges dismissed TOT’s claims against Huawei, finding the company not liable for misuse of confidential information. TOT appealed the decision.

Vodafone then sought a stay of the second UK proceedings, pending the outcome of TOT’s appeal in Madrid. Parties expect the outcome of the Spanish appeal at the end of 2021 by the earliest. The initial claim brought by TOT against Vodafone was worth €508 million.

Second time lucky

In the second proceedings brought by TOT against Vodafone, presiding judge Marcus Smith dismissed Vodafone’s request. In his UK judgment, he states, “Huawei is being sued under Spanish law in Madrid and Vodafone is being sued under English law in this court. Even if TOT were to succeed against Vodafone and fail against Huawei (or vice versa), I do not see how differently framed causes of action, against different defendants, gives rise to outcomes that are in any way problematic.”

Thus, the judge found that any decision made against Huawei in Spain will not impact the UK proceedings. The UK claims are subject to its exclusive jurisdiction. Vodafone must also pay £400,000 to TOT.

Vodafone, TOT

Jeremy Hertzog

Vodafone is seeking permission to appeal. Following the directions given by the court when it handed down the judgment, Vodafone has written to TOT outlining what it sees as the deficiencies of its pleadings. The court will likely consider the applications at a hearing in April.

Jump to the jurisdictional challenge

Originally, international full-service firm Stephenson Harwood acted for TOT in the UK proceedings, dealing with the first case and associated jurisdictional issues.

However, the London office of UK law firm Mishcon de Reya then took over the proceedings, led by partner Jeremy Hertzog. Given the jurisdictional rather than technological nature of the case, no external patent attorneys are involved.

A Hogan Lovells team led by partner Paul Brown acts for Vodafone in the UK. The relationship between the two parties is well-documented, with Hogan Lovells often appearing for Vodafone in high-profile mobile communications cases. An example is the dispute with IPCom over the NPE’s so-called 100A patent. The Madrid office of Hogan Lovells acted for Vodafone in Spain, led by partners Ana Castedo and Inmaculada Lorenzo.

Blackstone Chambers (London): Michael Bloch
Hogarth Chambers (London): Richard Davis, Edward Cronan
Mishcon de Reya (London): Jeremy Hertzhog (partner), Peter Nunn; associates: Lucy Flascher, Chloe Hamilton, Eloise Preston
In-house (Madrid): Álvaro López-Medrano (chief executive officer), Miguel Blanco

For Vodafone
Twenty Essex (London): Thomas Raphael
8 New Square (London): Jaani Riordan
Hogan Lovells (London): Paul Brown (partner); associates: Dominic Hoar, Jemma Trainor, Helen Poulson, Hannah Schofield
In-house (Reading): Nick Vidovich (group legal director), Katie Vernon, Emma Haymes

UK High Court, London
Marcus Smith (deputy judge, presiding judge)