Swift Technical Group Holdings Ltd & Ors v Mulcahy [2009] EWHC 1485 (QB) (08 June 2009)

Swift Technical Group Holdings Ltd & Ors v Mulcahy [2009] EWHC 1485 (QB) (08 June 2009)

The restrictive covenants in the Investment Agreement did not apply to the defendant after he became a non-executive director under a contract for services. The only enforceable restrictions were those in the Non-Executive Directorship Agreement, which did not include post-termination non-compete clauses. There was...

Source-derived case information.

Citation
[2009] EWHC 1485
Parties
Claimant: Swift Technical Group Holdings Limited; Claimant: Swift Technical Holdings Limited; Claimant: Swift Technical Group Limited; Claimant: Gresham LLP; Defendant: Mr Richard Mulcahy
Jurisdiction
England and Wales
Judgment Date
08 June 2009
Procedural Posture
Interim Application for Injunction / Application for Interim Relief Pending Trial
Outcome
Application for interim injunction restraining involvement in competing business refused; injunction granted restraining use or disclosure of confidential information pending trial.
Legal Topics
Restrictive Covenants, Directors' Duties, Confidential Information, Non Compete Clauses, Injunctions
Employment Law Contract Law Restrictive Covenants Directors' Duties Confidential Information Non Compete Clauses Injunctions

Source-derived case record

Summary, issues, holding and outcome

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Parties

Swift Technical Group Holdings Limited

Claimant

Swift Technical Holdings Limited

Claimant

Swift Technical Group Limited

Claimant

Gresham LLP

Claimant

Mr Richard Mulcahy

Defendant

Procedural Posture

Interim Application for Injunction / Application for Interim Relief Pending Trial

Legal Issues

  1. 1 Whether the defendant is bound by restrictive covenants in the Investment Agreement after becoming a non-executive director
  2. 2 Whether the restrictive covenants are reasonable and enforceable
  3. 3 Whether an injunction should be granted restraining the defendant from involvement with competing companies

Ratio Decidendi

The restrictive covenants in the Investment Agreement did not apply to the defendant after he became a non-executive director under a contract for services. The only enforceable restrictions were those in the Non-Executive Directorship Agreement, which did not include post-termination non-compete clauses. There was no existing non-compete restriction to enforce. However, there was a real risk of disclosure of confidential information, justifying an injunction restraining such disclosure pending trial.

Court Disposition

Application for interim injunction restraining involvement in competing business refused; injunction granted restraining use or disclosure of confidential information pending trial.

Orders

  • Defendant restrained from using or disclosing confidential information relating to the claimants' business and affairs pending trial.
  • No injunction granted restraining defendant's involvement with the Kazakh companies.