Servicios de Salud v Viva Enterprises: High Court orders $38m ventilator refund in Covid supply dispute

The High Court has handed down a detailed consequentials judgement resolving the fallout from a trial over the supply of medical ventilators during the Covid-19 pandemic, ordering Viva Enterprises Limited (VEL) to pay US$38.48 million to Servicios de Salud del Instituto Mexicano del Seguro Social para el Bienestar, the successor body to Mexico's INSABI.

Mr Justice Richard Smith, sitting in the Business and Property Courts, delivered the ruling following his earlier trial judgement of June 2026, which concerned a 2020 agreement under which INSABI paid around $42 million upfront for 1,000 ventilators. That judgement rejected the claimant's case in fraudulent misrepresentation, repudiatory breach and unjust enrichment, but found that VEL had breached its delivery obligations by May 2020, and that correspondence exchanged in June 2020 varied the contract to allow alternative performance. Crucially, the judge found VEL had delivered only 50 units by the agreed deadline, entitling INSABI to a pro rata refund for the remaining 650, and rejected VEL's claim to have made further deliveries through a third-party supplier, Encore, which the judge described as part of a "covert scheme" to disguise the shortfall.

The consequentials hearing turned largely on whether that refund finding could be enforced given that the claimant had not specifically pleaded a liquidated claim under the varied agreement. VEL argued the court had effectively decided the case on an unpleaded "third man" theory, contrary to the principle established in Al-Medenni v Mars UK Ltd, and that it would have run alternative defences, including mistake and waiver, had the claim been pleaded differently. The judge rejected this, finding no real prejudice given the extensive evidence already explored at trial regarding both parties' understanding of the June correspondence, including contemporaneous documents showing VEL's own recognition that a refund was due. Permission was granted for the claimant to amend its pleading accordingly, with the judge applying the conventional balancing principles from Macleod v Mears Ltd rather than the stricter test for reopening findings after judgement.

On pre-judgement interest, the judge declined to adopt either party's suggested benchmark, rejecting US Prime as inappropriate given INSABI's non-commercial, government-funded status, and rejecting an investment-based rate for want of sufficient evidence on comparable bond yields. Interest was instead awarded at the Effective Federal Funds Rate plus one per cent, running from January 2022.

On costs, the judge held that the claimant was the successful party overall, despite the failure of its misrepresentation case, and ordered VEL to pay 55 per cent of its costs on the standard basis, reflecting a discount for the unsuccessful and costly fraud allegations. No separate costs order was made in favour of Robert Dangoor personally, notwithstanding his success in defeating the deceit claim against him individually, the judge treating him and VEL as having operated as a single economic unit for costs purposes. A payment on account of 60 per cent of the claimant's costs schedule was ordered, alongside release of the security VEL had lodged for its own costs.

Permission to appeal was refused across all four grounds advanced by VEL, including challenges to the construction of the June agreement and the covert scheme findings, the judge finding none carried a real prospect of success. However, a stay of the payment order was granted pending any application to the Court of Appeal, given the sum involved and the risk of insolvency proceedings against VEL. Separate applications concerning an earlier injunction and related undertakings were adjourned for fuller argument.