Associated Foreign Exchange Ltd v International Foreign Exchange (UK) Ltd & Anor [2010] EWHC 1178 (Ch) (26 May 2010)

Associated Foreign Exchange Ltd v International Foreign Exchange (UK) Ltd & Anor [2010] EWHC 1178 (Ch) (26 May 2010)

The 12-month non-solicitation covenant is likely to be held unenforceable at trial as it exceeds what is reasonably necessary to protect AFEX's legitimate interests. A period beyond six months is disproportionate given the nature of the business, the employee's role, and industry practice. The clause's application to potential customers is also likely to be found unreasonable. Therefore, the application for an injunction to enforce the 12-month covenant fails.

Citation
[2010] EWHC 1178 (Ch)
Parties
Claimant: Associated Foreign Exchange Limited; First Defendant: International Foreign Exchange (UK) Limited; Second Defendant: Saeed Abbassi
Jurisdiction
England and Wales
Judgment Date
26 May 2010
Procedural Posture
Injunction Application (employment Contract) / Interim Application for Injunction
Outcome
Application for interim injunction refused
Legal Topics
Restrictive Covenants, Non Solicitation Clauses, Enforceability of Post Termination Restrictions, Restraint of Trade
Employment Law Contract Law Restrictive Covenants Non Solicitation Clauses Enforceability of Post Termination Restrictions Restraint of Trade

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Parties

Associated Foreign Exchange Limited

Claimant

International Foreign Exchange (UK) Limited

First Defendant

Saeed Abbassi

Second Defendant

Procedural Posture

Injunction Application (employment Contract) / Interim Application for Injunction

Legal Issues

  1. 1 Is the 12-month non-solicitation covenant in the employment contract enforceable?
  2. 2 Has Mr Abbassi breached the non-solicitation covenant?
  3. 3 Has IFX procured or induced a breach of the covenant by Mr Abbassi?

Ratio Decidendi

The 12-month non-solicitation covenant is likely to be held unenforceable at trial as it exceeds what is reasonably necessary to protect AFEX's legitimate interests. A period beyond six months is disproportionate given the nature of the business, the employee's role, and industry practice. The clause's application to potential customers is also likely to be found unreasonable. Therefore, the application for an injunction to enforce the 12-month covenant fails.

Court Disposition

Application for interim injunction refused

Orders

  • No injunction granted to enforce the 12-month non-solicitation covenant
  • No order as to costs specified in the judgment