Kleerex Licensing Ltd / ICC Bank Plc /Subscription and Shareholders Agreement [1997] IECA 483 (6th May, 1997)

Kleerex Licensing Ltd / ICC Bank Plc /Subscription and Shareholders Agreement [1997] IECA 483 (6th May, 1997)

The indefinite non-solicit and post-termination non-compete restrictions in the agreements, insofar as they benefit Kleerex Licensing Ltd, go beyond what is necessary to protect the goodwill of the business or the interests of the investor, and therefore offend against Section 4(1) of the Competition Act, 1991. These restrictions are not indispensable to the objectives of the agreement and do not satisfy the requirements for a licence under Section 4(2).

Citation
[1997] IECA 483
Parties
Notifying Party: Kleerex Licensing Ltd; Notifying Party: ICC Bank plc (Industrial Credit Corporation plc); Shareholder/warrantor: Frank Carroll; Shareholder/warrantor: Gerard Higgins; Shareholder/warrantor: Aidan Mc Morrow; Shareholder: Kieran Comerford; Director: Kieran Comerford; Competition Authority Member (decision Author): Isolde Goggin
Jurisdiction
Ireland
Procedural Posture
Competition Authority Notification/decision / Final Decision on Notification for Certificate or Licence Under Section 4 of the Competition Act, 1991
Outcome
Refusal to issue certificate or grant licence under Section 4 of the Competition Act, 1991.
Legal Topics
Non Compete Clauses, Non Solicitation Clauses, Shareholders Agreements, Employment Contracts, Venture Capital Investment, Section 4 Competition Act 1991
Competition Law Non Compete Clauses Non Solicitation Clauses Shareholders Agreements Employment Contracts Venture Capital Investment Section 4 Competition Act 1991

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Parties

Kleerex Licensing Ltd

Notifying Party

ICC Bank plc (Industrial Credit Corporation plc)

Notifying Party

Frank Carroll

Shareholder/warrantor

Gerard Higgins

Shareholder/warrantor

Aidan Mc Morrow

Shareholder/warrantor

Kieran Comerford

Shareholder

Kieran Comerford

Director

Isolde Goggin

Competition Authority Member (decision Author)

Procedural Posture

Competition Authority Notification/decision / Final Decision on Notification for Certificate or Licence Under Section 4 of the Competition Act, 1991

Legal Issues

  1. 1 Whether clauses 6.1(iv) and 6.1(v) of the Subscription and Shareholders Agreement and clause 14 of the related employment agreements offend Section 4(1) of the Competition Act, 1991
  2. 2 Whether the agreement qualifies for a certificate or licence under Section 4(2) of the Competition Act, 1991

Ratio Decidendi

The indefinite non-solicit and post-termination non-compete restrictions in the agreements, insofar as they benefit Kleerex Licensing Ltd, go beyond what is necessary to protect the goodwill of the business or the interests of the investor, and therefore offend against Section 4(1) of the Competition Act, 1991. These restrictions are not indispensable to the objectives of the agreement and do not satisfy the requirements for a licence under Section 4(2).

Court Disposition

Refusal to issue certificate or grant licence under Section 4 of the Competition Act, 1991.

Orders

  • Certificate under Section 4(4) of the Competition Act, 1991 refused.
  • Licence under Section 4(2) of the Competition Act, 1991 refused.