CHESAPEAKE ASIA-PACIFIC LTD v. NIRVANA (ASIA) LTD AND OTHERS

CHESAPEAKE ASIA-PACIFIC LTD v. NIRVANA (ASIA) LTD AND OTHERS

The non-competition clause was wider than necessary because it contained no temporal limit and therefore constituted an unreasonable restraint of trade that the court could not sever or rewrite; as that clause was invalid, claims dependent on it (inducing breach, unlawful interference, conspiracy) failed....

Source-derived case information.

Citation
CHESAPEAKE ASIA-PACIFIC LTD v. NIRVANA (ASIA) LTD AND OTHERS
Parties
Plaintiff: Chesapeake Asia-Pacific Limited; 1st Defendant: Nirvana (Asia) Limited; 2nd Defendant: Pro-Art People Asia Limited; 3rd Defendant: Yu Wai Kwok
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
28 April 2009
Case Number
DCCJ2941/2006
Procedural Posture
Commercial Contract Dispute / Judgment at Trial (district Court)
Outcome
Plaintiff's claims dismissed
Legal Topics
Non Competition Clause, Restraint of Trade, Inducing Breach of Contract, Unlawful Interference With Business, Conspiracy to Injure Business, Confidential Information
Source Language
en
Contract Tort Commercial Law Competition Law Confidentiality Non Competition Clause Restraint of Trade Inducing Breach of Contract +3 more

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Summary, issues, holding and outcome

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Parties

Chesapeake Asia-Pacific Limited

Plaintiff

Nirvana (Asia) Limited

1st Defendant

Pro-Art People Asia Limited

2nd Defendant

Yu Wai Kwok

3rd Defendant

Procedural Posture

Commercial Contract Dispute / Judgment at Trial (district Court)

Legal Issues

  1. 1 Whether the non-competition clause in the Non-Disclosure Agreement is an unreasonable restraint of trade (no time limit) and therefore unenforceable
  2. 2 Whether the 2nd Defendant knew of the non-competition clause and induced or procured the 1st Defendant to breach it
  3. 3 Whether the Defendants committed unlawful interference or conspiracy to injure the Plaintiff's business interest

Ratio Decidendi

The non-competition clause was wider than necessary because it contained no temporal limit and therefore constituted an unreasonable restraint of trade that the court could not sever or rewrite; as that clause was invalid, claims dependent on it (inducing breach, unlawful interference, conspiracy) failed. Additionally, evidence was insufficient to establish that the 2nd Defendant knowingly induced breach or acted as agent for the 1st Defendant, and the PAC Team Group had in fact initiated direct dealings.

Court Disposition

Plaintiff's claims dismissed

Orders

  • Plaintiff's claims dismissed
  • Costs of the Plaintiff's claims to the Defendants with certificate for counsel (order nisi to be made absolute 14 days after handing down of judgment)