The high court will on Wednesday begin hearing the government’s multimillion-pound legal claim against the company awarded two personal protective equipment (PPE) contracts during the Covid pandemic after the Conservative peer Michelle Mone recommended it to ministers.

The Department of Health and Social Care (DHSC) sued in December 2022 for return of the £122m it paid to the company, PPE Medpro, for 25m sterile surgical gowns, which were rejected after delivery to the UK.

That contract, and another worth £80.85m to supply face masks, were processed via the then Conservative government’s “VIP lane”, which gave high priority to companies recommended by people with political connections. Mone, who rose to prominence running her lingerie company, Ultimo, was appointed to the House of Lords by David Cameron in 2015.

After PPE Medpro’s contracts were published in 2020, lawyers for Mone and her husband, the Isle of Man-based businessman Doug Barrowman, denied that the couple were involved in the company. In a series of reports in 2022, the Guardian revealed that the couple were involved, and that Mone had first approached the then Cabinet Office minister Michael Gove.

In November 2022, the Guardian reported that leaked documents produced by HSBC bank showed that at least £65m from PPE Medpro’s profits had been paid to Barrowman’s accounts in the Isle of Man. He then transferred £29m to an offshore trust whose beneficiaries were Mone and her three adult children, according to the documents.

In November of the following year, the couple acknowledged for the first time that they were involved in PPE Medpro. A month later Mone admitted in an interview with the BBC’s Laura Kuenssberg that she had lied to the media. Barrowman said he had made more than £60m in profits from the PPE contracts, and transferred money to the trust, adding that the beneficiaries included his children too.

PPE Medpro had said in a statement in December 2020 that it was “proud” that the gowns and face masks it provided had “undoubtedly helped keep our NHS workers safe”. In fact, while the face masks were accepted, the gowns had been rejected by the DHSC and were never used in the NHS.

In December 2022 the government sued the company after questions were asked in parliament following the Guardian’s reporting. In the same month Mone took a leave of absence from the House of Lords.

In its legal claim the DHSC alleges that it rejected the gowns because they were not sterile and could have compromised patient safety, their technical labelling was “invalid” and “improper”, and they “cannot be used within the NHS for any purpose”. The court action is for payment of the full £122m the DHSC paid to the company, plus £11m for storage and disposal costs, and interest.

PPE Medpro has insisted throughout that the gowns were manufactured in China to the correct specification and sterility, and said from the start that it would defend the legal action. This week as the case is to open, the company maintained that position.

In a statement, a spokesperson said: “PPE Medpro categorically denies breaching its obligations to DHSC in the supply of sterile surgical gowns during the Covid pandemic and it will robustly defend these claims in court.”

The DHSC has said it does not comment on active legal proceedings.

The high court action is separate to the long-running investigation by the National Crime Agency into whether Mone and Barrowman committed any criminal offences during the process of procuring the contracts.

The NCA executed search warrants on the couple’s homes and other properties in April 2022, and in January 2024 the Crown Prosecution Service obtained a court order freezing £75m of their assets. Mone and Barrowman did not contest that application, and have denied any criminal wrongdoing.