Novo Nordisk A/S v KBP Biosciences Pte. Ltd. & Anor

Facts

Novo Nordisk A/S (Novo) bought a drug candidate, Ocedurenone, from KBP Biosciences Pte Ltd (KBP), a biotechnology company founded by Dr Huang Zhenhua. The asset purchase agreement was signed on 11 October 2023 after due diligence conducted while Phase 3 trials were running; Novo paid US$700m and put US$100m in escrow. In the agreement KBP warranted that it had made available true, complete and accurate copies of all material information on the drug's efficacy. Phase 3 later met the futility criteria, and on 26 June 2024 Novo announced the failure and an impairment loss of over US$800m. Novo's position is that, unknown to it when it bought the drug, data from a Bulgarian trial site was entirely responsible for the Phase 2 treatment effect, and that an unplanned interim analysis excluding that site had shown no clear effect.

On 14 February 2025 the court granted Novo, ex parte and without notice, a worldwide freezing order up to US$730m in support of a New York-seated ICC arbitration, which Novo then began on 26 March 2025 alleging fraud. KBP and Dr Huang applied in Originating Application No 3 of 2025 (Summons No 21 of 2025) in the Singapore International Commercial Court to set the order aside, or alternatively to vary it.

Issues

1. Whether Novo had a good arguable case of fraud and whether there was a real risk of dissipation
2. Whether Novo breached its duty of full and frank disclosure at the ex parte hearing
3. Whether the requirements of s 12A of the International Arbitration Act 1994 for court-ordered interim relief were met
4. Whether the order should be varied to a collective limit and to exclude disclosure of small assets

Holding

The court dismissed the application to set aside the worldwide freezing order but allowed it in part, varying the ancillary disclosure order so that the defendants need only disclose assets exceeding US$10,000 in value. The request to make the US$730m limit apply to both defendants collectively was refused, with liberty to renew it on proper evidence of value. Costs were to be heard.

Reasoning

The court found a good arguable case. Information that one site had markedly better results was objectively material, since the Phase 2 report itself claimed the blood pressure reduction was consistent across regions. Evidence obtained after the ex parte hearing showed that an earlier potential buyer, Otsuka, had declined to proceed after noting that the Bulgarian site was responsible for the bulk of efficacy, and that KBP had acknowledged the site's better response. Uploading raw vital signs data in PDF form without the analyses was no answer. There was a good arguable case that the non-disclosure was deliberate and dishonest, made because the defendants feared Novo would, like Otsuka, decline.

On dissipation, the court applied JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others [2018] 2 SLR 159 and the Bouvier requirement that dishonesty bear on the risk. Almost all the price had been moved out of KBP through its holding company, with large sums reaching Dr Huang. Shareholder minutes from 5 January 2024 showed he anticipated a claim by Novo. A lawful dividend could still be dissipative, and the court held that moving approximately US$330m to Dr Huang was not justified.

None of the alleged non-disclosures, alone or together, was material enough to discharge the order. The lead investigators knew of the interim analysis but lacked access to its results; regional efficacy arguments turned on expert evidence not then available; and Phase 3 had failed regardless of any statistical errors, while Novo's case rested on concealment, not on fraud at the Bulgarian site.

Under s 12A, the tribunal was not yet constituted and an ICC emergency arbitrator could not act ex parte or bind Dr Huang, whom Novo showed on a prima facie basis to be a party through the clause extending to officers and directors. Urgency came from the risk of dissipation, delay not being decisive. The permissive "may" in the emergency arbitrator clause did not exclude the courts, and New York courts had enforced foreign Mareva orders. A per-defendant limit suited a joint and several claim, but a US$10,000 disclosure floor matched Novo's own original approach.

From the judgment