Carroll Products and Designs Ltd /ICC Bank Plc / Subscription and Shareholders Agreement [1997] IECA 485 (6th May, 1997)

Carroll Products and Designs Ltd /ICC Bank Plc / Subscription and Shareholders Agreement [1997] IECA 485 (6th May, 1997)

The non-solicit and non-compete clauses in the agreements, insofar as their benefit enures to Carroll Products and Designs Ltd, exceed what is necessary to protect the goodwill of the business and restrict competition beyond permissible limits. The waivers executed by ICC and Gokin Ltd do not cure the anti-competitive effect as the benefit of the restrictions remains with Carroll. The agreements therefore offend Section 4(1) of the Competition Act 1991 and do not qualify for a certificate or a licence under Section 4(2).

Citation
[1997] IECA 485
Parties
Notified Party: Carroll Products and Designs Ltd; Notifying Party: ICC Bank plc; Notified Party: Gokin Ltd; Shareholder/warrantor: Frank Carroll; Shareholder/warrantor: Gerard Higgins; Shareholder/warrantor: Aidan Mc Morrow; Shareholder: Kieran Comerford
Jurisdiction
Ireland
Procedural Posture
Competition Authority Notification/decision / Final Decision on Notification and Request for Certificate or Licence
Outcome
Refusal to issue certificate or grant licence
Legal Topics
Anti Competitive Agreements, Non Compete Clauses, Non Solicitation Clauses, Venture Capital Investment, Shareholders Agreement, Employment Contract Restrictions
Competition Law Anti Competitive Agreements Non Compete Clauses Non Solicitation Clauses Venture Capital Investment Shareholders Agreement Employment Contract Restrictions

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Parties

Carroll Products and Designs Ltd

Notified Party

ICC Bank plc

Notifying Party

Gokin Ltd

Notified Party

Frank Carroll

Shareholder/warrantor

Gerard Higgins

Shareholder/warrantor

Aidan Mc Morrow

Shareholder/warrantor

Kieran Comerford

Shareholder

Procedural Posture

Competition Authority Notification/decision / Final Decision on Notification and Request for Certificate or Licence

Legal Issues

  1. 1 Whether clauses 6.01(iv), 6.01(v) of the shareholders agreement and clause 14 of the 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(4) or 4(2) of the Competition Act 1991

Ratio Decidendi

The non-solicit and non-compete clauses in the agreements, insofar as their benefit enures to Carroll Products and Designs Ltd, exceed what is necessary to protect the goodwill of the business and restrict competition beyond permissible limits. The waivers executed by ICC and Gokin Ltd do not cure the anti-competitive effect as the benefit of the restrictions remains with Carroll. The agreements therefore offend Section 4(1) of the Competition Act 1991 and do not qualify for a certificate or a licence under Section 4(2).

Court Disposition

Refusal to issue certificate or grant licence

Orders

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