Medical Imaging Joint Venture

Middle East


Valuation and assessment of complex damages arising from an abortive joint venture to develop and market a medical imaging camera.

A developer of medical imaging devices agreed to sell its heart scanning technology to a Chinese company and entered a joint venture agreement to develop a whole-body camera based on the technology. As a minority partner in the JV, the Chinese firm would provide funding and engineering assistance to complete the development of the whole-body imaging product.

Each side alleged breaches of the agreement in regard to development milestones or the supply of funds and engineering support. After development stalled, the Chinese company – which went on to launch a similar camera independently – sued for repayment of loans and the original developer counter-claimed for damages suffered.


HKA was retained by the legal counsel for the originator of the imaging camera technology to assess the value of the joint venture as at 31 December 2016, when development work was effectively suspended.

Under their agreement, the dispute was referred to Swiss Chambers Arbitration Institution.

What we did

Our complex damages expert, supported by two forensic accountants, carried out a series of assessments to value the business.

These included:

  • Evaluating business plans and forecasts made between 2013 and 2016. They were found to be generally consistent and reasonable in their expectations for the development of the product and likely sales revenue.
  • Calculating the costs to be incurred in development, manufacturing and getting the product to market.
  • Projecting cash flows and discounting them to give net present values, and a terminal value from which to estimate the future value of the business.

Following expert reports from both sides, we undertook further work to refine the profit forecasts, underpin the value assessment, and reduce areas of disagreement.

A variety of contemporaneous indications of the JV’s value were cited in our second report, including:

  • Previous assertions by the partner about the valuation of its shareholding
  • Funds raised in the market for imaging camera technology
  • Sales of other early-stage companies by our entrepreneur client
  • Transactions for the most comparable medical scanners available on the market
  • The Chinese partner’s claim against another manufacturer for alleged breach of its intellectual property for the new imaging product

As well as a joint expert statement on the value of the joint venture company, we prepared an assessment of the interest claimable.

Our complex damages expert provided testimony to the tribunal, and was cross-examined by legal counsel for both the venture partner and the company to which it sold on the IP for the camera.


HKA built up a robust valuation of the joint venture despite the uncertainty surrounding its new technology and abortive development work. Our assessment of losses – which were in the range of US$200-250 million – were underpinned by a thorough evaluation of all available evidence.

An award by the arbitral tribunal is awaited.

Project Details
  • Client
  • Year
  • Value
    US$200-250 million
  • Services
    Commercial Damages and Valuation, Economic Damages, Expert
  • Sectors
    Healthcare and Life Sciences

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