Sparta Global Limited & Anor v Ben Hayes & Anor

Sparta Global Limited & Anor v Ben Hayes & Anor

The court finds, on a preliminary assessment, that the restrictive covenants in the Investment Agreement are likely to be unenforceable as an unlawful restraint of trade, being too broad and lacking negotiation, and more akin to an employment contract than a commercial arrangement. The balance of convenience lies decisively against granting the interim injunction, as the defendant's undertakings under the employment contract provide sufficient protection and enforcement of the IA covenants would cause disproportionate harm to the defendant.

Parties
Claimant: Sparta Global Limited; Claimant: Condor Topco Limited; Defendant: Ben Hayes; Defendant: Kubrick Group Limited
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Interim Injunction Application / Interlocutory Judgment
Outcome
application for interim relief based on IA covenants dismissed; applications to join Condor as claimant and Kubrick as defendant granted
Legal Topics
Restraint of Trade, Restrictive Covenants, Interim Injunctions, Shareholder Agreements, Balance of Convenience
Employment Law Contract Law Commercial Law Restraint of Trade Restrictive Covenants Interim Injunctions Shareholder Agreements Balance of Convenience

Case Brief

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Parties

Sparta Global Limited

Claimant

Condor Topco Limited

Claimant

Ben Hayes

Defendant

Kubrick Group Limited

Defendant

Procedural Posture

Interim Injunction Application / Interlocutory Judgment

Legal Issues

  1. 1 Are the restrictive covenants in the Investment Agreement enforceable on an interim basis?
  2. 2 Is the Investment Agreement more akin to a contract of employment or a commercial arrangement?
  3. 3 Does the balance of convenience favour granting the interim injunction sought by the claimant?

Ratio Decidendi

The court finds, on a preliminary assessment, that the restrictive covenants in the Investment Agreement are likely to be unenforceable as an unlawful restraint of trade, being too broad and lacking negotiation, and more akin to an employment contract than a commercial arrangement. The balance of convenience lies decisively against granting the interim injunction, as the defendant's undertakings under the employment contract provide sufficient protection and enforcement of the IA covenants would cause disproportionate harm to the defendant.

Court Disposition

application for interim relief based on IA covenants dismissed; applications to join Condor as claimant and Kubrick as defendant granted

Orders

  • Application to enforce IA covenants against the defendant dismissed.
  • Application to join Kubrick Group Limited as second defendant granted.