Celanese Canada ULC v Mithra Pharms. SA

2024 NY Slip Op 32632(U)

July 30, 2024

Supreme Court, New York County

Docket Number: Index No. 652087/2024

Judge: Lyle E. Frank

Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York

State and local government sources, including the New

York State Unified Court System's eCourts Service.

This opinion is uncorrected and not selected for official

publication.
NYSCEF DOC. NO. 58 

INDEX NO. 652087/2024 

RECEIVED NYSCEF: 07/30/2024 

SUPREME COURT OF THE STATE OF NEW YORK 

NEW YORK COUNTY 

PRESENT: HON. LYLE E. FRANK 

Justice 

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CELANESE CANADA ULC, 

Plaintiff, 

- V -

MITHRA PHARMACEUTICALS SA, NOVALON SA 

Defendant. 

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PART 

INDEX NO. 

MOTION DATE 

11M 

652087 /2024 

04/24/2024, 

06/11/2024 

MOTION SEQ. NO. __ 0_0_1_0_0_2 __ 

DECISION + ORDER ON 

MOTION 

The following e-filed documents, listed by NYSCEF document number (Motion 001) 2, 3, 4, 5, 6, 7, 8, 9, 

10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 24, 25, 26, 28, 29, 30, 31 

were read on this motion to/for INJUNCTION/RESTRAINING ORDER 

The following e-filed documents, listed by NYSCEF document number (Motion 002) 34, 35, 36, 37, 38, 

39,40,41,42,43,44,45,46,47,49,50,51,52,53,54,55,56 

were read on this motion to/for DISMISS 

This action arises out of an alleged breach of a commercial sales agreement (the 

"Contract"). 1 Plaintiff, Celanese Canada ULC ("Celanese"), now moves for a preliminary 

injunction enjoining defendants, Mithra Pharmaceuticals SA ("Mithra") and Novalon SA 

("Novalon") ( collectively, the "Defendants"), from: (1) disclosing or disseminating any 

confidential information provided to Defendants by Celanese to any other person, partnership, 

company, corporation or other entity, (2) utilizing any unused materials given to Defendants by 

Celanese, (3) utilizing any of the aforementioned confidential information for the production, 

manufacture, or sales of Defendants' products, and ( 4) selling products manufactured with or 

containing any material provided by Celanese. Defendants also move to dismiss the complaint 

pursuant to CPLR 3211, the principles of comity, and for improper service. Upon the foregoing 

1 The Court would like to thank Sophia Hartman for her assistance in this matter. 

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documents and following oral argument, for the reasons indicated below, plaintiff's motion for a 

preliminary injunction is denied, with exception to the sealing ofNYSCEF Docs. No. 4, 5, 6, 7, 

and 8, which is granted. Defendants' motion to dismiss is similarly denied to the extent that this 

action is stayed, pending the results of Defendants' foreign bankruptcy proceedings. 

Background 

Celanese is a Canadian company that has developed a proprietary polymer (the 

"Material"). Defendant Novalon is a Belgian company, notably responsible for the manufacture 

and distribution of a vaginal contraceptive ring called "Myring" ( or, in the United States, 

"Haloette"), which uses Celanese's Material for its production. Defendant Mithra is also a 

Belgian company that develops and manufactures over the counter products for women's health, 

among other applications, and is Novalon's parent through sole or majority ownership. 

In November 2017, Celanese and Mithra entered into the Contract, wherein Celanese 

agreed to provide the Materials for use solely as a raw material in Mithra's contraceptive rings. 

This Contract was reassigned to Novalon in 2020 with Celanese's approval. Mithra subsequently 

entered into a guarantee agreement (the "Guarantee") with Celanese, in which Mithra agreed to 

be liable for and indemnify Celanese "against losses, damages, costs and expenses, whatsoever 

which [Celanese] may incur by reason or in consequence of' Novalon's failure to perform under 

the Contract. NYSCEF Doc. No. 13. 

Celanese alleges that Defendants' have breached the Contract by failing to pay the July 

2023 invoice in full, claiming that $1,180,000 is still left outstanding, and by disclosing 

Celanese's Confidential Information to Third Parties, among other claims. In their papers and at 

oral argument, Defendants have shown that both Novalon and Mithra are in the beginning stages 

of Bankruptcy proceedings in Belgium. Defendants further assert that, to the extent Celanese has 

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a claim, it should be required to seek relief alongside those other creditors in the Belgian 

proceedings, rather than being permitted to pursue this action, as it threatens to disrupt Novalon 

and Mithra's business, while also complicating Defendants' efforts to negotiate with creditors or 

potential buyers. 

Notably, this Court has granted a past TRO on the topic of Defendants' dissemination of 

Celanese's Confidential Information, which was vacated. In his ruling to vacate, Appellate 

Division Justice Martin Shulman reasoned that the allegations in Celanese's Complaint did not 

show a risk of irreparable harm and expressed concern that comity be given to Novalon's 

Belgian reorganization proceedings. 

Discussion 

It is well established that "[a] movant's burden of proof on a motion for a preliminary 

injunction is particularly high" Council of the City of NY v Giuliani, 248 AD2d 1, 4 [1st Dept 

1998]. A party seeking a preliminary injunction must clearly demonstrate (1) the likelihood of 

ultimate success on the merits; (2) the prospect of irreparable injury if the injunction is not 

issued; and (3) a balance of the equities in the movant's favor. See Doe v Axelrod, 73 NY2d 748 

[NY 1988]; Housing Works, Inc. v City of New York, 255 AD2d 209 [1st Dept 1998]. If the 

movant fails to meet its burden to establish each and every element, the request for injunctive 

relief must be denied. See, e.g., Axelrod, 73 NY2d at 750-51. 

Celanese now alleges that Defendants have breached the Contract in a number of ways, 

which have prompted Celanese to request a preliminary injunction. The breach issue most 

pertinent to this Court at this time is the allegation that Defendants' have, and continue to, 

disclose Celanese's Confidential Information to a Third Party, namely to Mithra CDMO 

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("CDMO"), the manufacturing company owned by Mithra that uses Celanese's Material to make 

Defendants' contraceptive product.2 

As formerly stated, to succeed on a motion for a preliminary injunction, a party must 

show the prospect of irreparable injury if the injunction is not issued. In this case, Celanese has 

failed to meet its burden as the dissemination of Confidential Information to CDMO does not 

breach the Contract's confidentiality clause(s), and it has not alleged anything further that would 

lead this Court to believe that the proprietary nature of the Confidential Information has been, or 

will be, disclosed by Defendants to any other parties. 

As a condition for the sale of the Material to Defendants, Celanese required Mithra and 

Novalon to protect Celanese's "Confidential Information." The Contract defines "Confidential 

Information," and states in clause 17.S(ii) that Defendants agree that they will not "disclose 

Confidential Information of [Celanese] to any Third Party without the advance written approval 

of [Celanese]." This seems to be the nexus of the parties disagreement: whether CDMO is a 

Third Party or an Affiliate. 

In clause 17.11, the Contract defines "Third Parties" as "a contractor, agent, consultant, 

expert, or the like in conjunction with a Developmental Purpose .... " The gravamen of the clause 

is to instruct Defendants on their obligations should they "need to incorporate a third party, ... 

and such incorporation will involve the use of [Celanese's] Confidential Information .... " In this 

instance, the Contract necessitates that Defendants "require any such third party to execute a 

confidentiality agreement ... " before Defendants are authorized to share said Confidential 

Information. 

2 Mithra CDMO has also filed for Bankruptcy proceedings in Belgium. 

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The Contract also defines an "Affiliate(s)," in clause 17. l(a), as "any person, corporation, 

association or other entity that directly or indirectly controls, is controlled by, or is under 

common control with such party, either now or at any time during the [Contract] Term." It goes 

on to define "controls" as "ownership (directly or indirectly and legally or beneficially) of more 

than 50% of the outstanding voting shares, capital stock or other ownership interests entitled to 

vote for the election of directors or governing body of such person, corporation, association or 

other entity; or[] the authority, whether pursuant to contract, ownership of securities or other 

instruments otherwise, to direct the management or policies of such person, corporation, 

association or other entity; or [] such other relationship which results in the actual control over 

the management, policies, business, or affairs of such person, corporation, association or other 

entity .... " 

Contract clause 17.7 states that Defendants "may, in its sole discretion, disclose 

Confidential Information of [Celanese] to [Defendants'] Representatives who require the same 

in the performance of this Contract who have been advised of the confidential nature of the 

Confidential Information and the restrictions hereunder on its disclosure and use, and agree to 

maintain the same in confidence and not to use the same other than expressly permitted herein." 

The term "Representative(s )," as defined in clause 17.1( e ), "means a party's directors, officers, 

employees, principals, agents, consultants, and subcontractors as well as its Affiliates and their 

respective directors, officers, employees, principals, and agents." 

Upon the Court's reading of these relevant clauses, CDMO is necessarily considered an 

Affiliate, not a Third Party, under the Contract. Therefore, Defendants did not need to obtain 

advanced written approval from Celanese before disclosing Confidential Information to CDMO, 

as it is, by the Contract's definition, "controlled" by Mithra, and is thereby automatically bound 

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by the confidentiality terms of the Contract. The Court finds no evidence therefore of violation of 

the contract's confidentiality provision, and thus no reason to enjoin any party. 

As to Defendants' motion to dismiss on account of the proceedings taking place in 

Belgium, this Court acknowledges that the principles of international comity and a strong public 

policy favor the administration of all claims against a debtor in a single forum. These 

considerations generally preclude American Courts from giving certain creditors preference over 

others by releasing them from the obligations imposed by foreign bankruptcy law. Ecoban Fin. 

Ltd. v. Grupo Acerero Del Norte, S.A. de C. V, 108 F. Supp. 2d 349, 354 (S.D.N.Y. 2000), aff'd 

sub nom. Ecoban Fin. Ltd. v. Altos Harnos de Mexico, S.A. de C. V, 2 F. App'x 80 (2d Cir. 

2001). The Court has been provided no reason to believe that the Belgian proceedings are not 

procedurally fair, nor that they contravene the laws or public policy of the United States. As 

such, this Court will do what would be done by this Court with any American bankruptcy 

proceeding running concurrently with this action, the instant matter shall be stayed, pending the 

outcome of the Belgian proceedings. 

As to Defendants' claims that Celanese's initial attempt at service was improper, 

information given to the Court at oral arguments on July 24, 2024, indicates that there has now 

been additional service. To the extent that the most recent attempt at service is found to be 

insufficient, the issue of service is hereby preserved for Defendants to re-bring the claim. 

Based on the foregoing, it is hereby 

ORDERED that the motion to dismiss is denied, and the action is stayed; pending the 

Belgian bankruptcy proceedings; and it is further 

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INDEX NO. 652087/2024 

RECEIVED NYSCEF: 07/30/2024 

ADJUDED that the preliminary injunction is denied, except as to NYSCEF Docs. No. 4, 

5, 6, 7, and 8, which the Clerk shall seal, except as to be accessed by the Court, the parties and 

their counsel. 

7/30/2024 

DATE LYLE E. FRANK, J.S.C. 

CHECK ONE: 

~ CASE DISPOSED ~ NON-FINAL DISPOSITION 

GRANTED □ DENIED GRANTED IN PART 

APPLICATION: SETTLE ORDER SUBMIT ORDER 

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT 

652087/2024 CELANESE CANADA ULC vs. MITHRA PHARMACEUTICALS SA ET AL 

Motion No. 001 002 

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□ OTHER 

□ REFERENCE 

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