SMITH ELEMENTS & CONTROLS LIMITED v EPI GROUP LIMITED [2018] NZHC 99

SMITH ELEMENTS & CONTROLS LIMITED v EPI GROUP LIMITED [2018] NZHC 99

The Court granted a mutual interim/interim restraining order pending further order or 31 May 2018 to preserve the parties' position for a short period: both parties were restrained (by directors, agents and employees) from approaching any customers or competitors of the plaintiff to supply the defined products, subject to clause 5.2, an express carve-out for Rexel (Ideal Electrical) and allowing the plaintiff to fulfil existing supply arrangements but not to seek new or extended post-31 May 2018 supply arrangements; and the Court imposed a strict timetable for evidence and submissions and listed backup hearing dates.

Citation
[2018] NZHC 99
Parties
Plaintiff: Smith Elements & Controls Limited; First Defendant: EPI Group Limited; Second Defendant: Introl Products Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
12 February 2018
Procedural Posture
Commercial Contract Dispute (supply Agreement) Interim Relief Sought Under Arbitration Act 1996 / Urgent Interlocutory Application for Interim Relief (interim/interim) and Jurisdiction Protest
Outcome
Interim/interim mutual restraining order granted pending further order or 31 May 2018; timetabling directions and hearing allocation made
Legal Topics
Non Compete Clause, Interim Relief, Jurisdiction (arbitration V Court), Timetabling/directions
Contract Arbitration Injunction Commercial Law Non Compete Clause Interim Relief Jurisdiction (arbitration V Court) Timetabling/directions

Case Brief

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Parties

Smith Elements & Controls Limited

Plaintiff

EPI Group Limited

First Defendant

Introl Products Limited

Second Defendant

Procedural Posture

Commercial Contract Dispute (supply Agreement) Interim Relief Sought Under Arbitration Act 1996 / Urgent Interlocutory Application for Interim Relief (interim/interim) and Jurisdiction Protest

Legal Issues

  1. 1 Whether the Court may grant interim measures despite arbitration clause (Art 9, First Schedule, Arbitration Act 1996)
  2. 2 Whether EPI's protest as to jurisdiction should be set aside
  3. 3 Whether clause 5 of the supply agreement creates an exclusive customer relationship until 18 May 2018

Ratio Decidendi

The Court granted a mutual interim/interim restraining order pending further order or 31 May 2018 to preserve the parties' position for a short period: both parties were restrained (by directors, agents and employees) from approaching any customers or competitors of the plaintiff to supply the defined products, subject to clause 5.2, an express carve-out for Rexel (Ideal Electrical) and allowing the plaintiff to fulfil existing supply arrangements but not to seek new or extended post-31 May 2018 supply arrangements; and the Court imposed a strict timetable for evidence and submissions and listed backup hearing dates.

Court Disposition

Interim/interim mutual restraining order granted pending further order or 31 May 2018; timetabling directions and hearing allocation made

Orders

  • Pending further order or 31 May 2018 (whichever first), both the plaintiff and the first defendant (by their directors, agents and employees) are restrained from approaching any customers or competitors of the plaintiff with a view to supply them products or goods as defined in the supply agreement
  • Order subject to the exception in clause 5.2 of the supply agreement