Applied Microelectronics Ltd /Share Subscription Agreement [1997] IECA 488 (8th July, 1997)

Applied Microelectronics Ltd /Share Subscription Agreement [1997] IECA 488 (8th July, 1997)

The agreement, as amended by the waiver limiting enforcement of non-compete and non-solicit clauses to 18 months post-cessation as shareholder holding more than 5% equity (and not upon cessation as director or employee), does not offend Section 4(1) of the Competition Act, 1991. The restrictions are within the period and scope generally accepted by the Authority for such agreements.

Citation
[1997] IECA 488
Parties
Notifier: Applied Micro Electronics Ltd; Promoter: James O'Reilly; Promoter: Martin O'Malley; Party: Catherine O'Reilly; Party: AME (Sales) Ltd; Party: AME (Ireland) Ltd; Party: AM Electronics Inc; Party: AME Software Canada Inc; Subscriber: Industrial Development Authority (IDA)
Jurisdiction
Ireland
Procedural Posture
Competition Authority Notification/decision / Final Decision and Certificate Issuance
Outcome
Certificate granted; agreement does not offend Section 4(1) of the Competition Act, 1991 as amended by waiver.
Legal Topics
Share Subscription Agreement, Non Compete Clauses, Non Solicitation Clauses, Minority Shareholder Protections, Section 4 Competition Act 1991
Competition Law Corporate Law Share Subscription Agreement Non Compete Clauses Non Solicitation Clauses Minority Shareholder Protections Section 4 Competition Act 1991

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Parties

Applied Micro Electronics Ltd

Notifier

James O'Reilly

Promoter

Martin O'Malley

Promoter

Catherine O'Reilly

Party

AME (Sales) Ltd

Party

AME (Ireland) Ltd

Party

AM Electronics Inc

Party

AME Software Canada Inc

Party

Industrial Development Authority (IDA)

Subscriber

Procedural Posture

Competition Authority Notification/decision / Final Decision and Certificate Issuance

Legal Issues

  1. 1 Whether the share subscription agreement and its restrictive covenants offend Section 4(1) of the Competition Act, 1991
  2. 2 Whether the duration and scope of non-compete and non-solicit clauses are permissible under competition law

Ratio Decidendi

The agreement, as amended by the waiver limiting enforcement of non-compete and non-solicit clauses to 18 months post-cessation as shareholder holding more than 5% equity (and not upon cessation as director or employee), does not offend Section 4(1) of the Competition Act, 1991. The restrictions are within the period and scope generally accepted by the Authority for such agreements.

Court Disposition

Certificate granted; agreement does not offend Section 4(1) of the Competition Act, 1991 as amended by waiver.

Orders

  • Certificate issued stating the agreement, as amended by the waiver dated 9 June 1997, does not offend Section 4(1) of the Competition Act, 1991.