Commercial Court Grants Injunction on Non-Compete Covenant Pending Arbitration

5 December, 2018

An injunction has been granted by the Commercial Court to an international company in order restrain a former senior employee from working for a competitor in breach of an 18 month non-competition covenant contained in a Shareholders Deed which also contains clause in favour of LCIA arbitration. The Court considered the proper application of Egon Zehnder v Tillman – due to be considered by the Supreme Court in January 2019 – in the context of a Shareholders Deed. The Court also considered the correct application of the restraint of trade doctrine to an employee with a small shareholdings. The relief was given following applications under s.44 of the Arbitration Act 1996 and s.37 of the Senior Courts Act for interim injunctive relief, in order to prevent the covenant from being breached further pending the determination of the matter at an arbitration.

Daniel Oudkerk QC and Jeremy Brier appeared for the Applicants, instructed by Sean Nesbitt and Anna McCaffrey of Taylor Wessing.