Verition Advisors (UK Partners) LLP v Jump Trading International Limited
[2023] EWCA Civ 701
Jump Trading International Limited v Damien Couture & Anor
28 April 2023
[2023] EWHC 1305 (KB)
High Court
A company tried to stop its ex-employee from working for a competitor, but waited too long to ask the court for help. The court said no, but agreed to quickly decide if the contract's 'no-compete' rule was even fair.
Key Facts
- •Jump Trading International Ltd (Claimant) sought an interim prohibitory injunction against Damien Couture (D1) and Verition Advisors (UK Partners) LLP (D2) to prevent D1's employment with D2 until the end of a non-compete period in his contract with the Claimant.
- •D1 was a quantitative researcher who resigned from the Claimant after giving one year's notice.
- •D2, a global hedge fund, hired D1.
- •The Claimant's contract with D1 contained a non-compete clause (clause 19.1) lasting up to twelve months, with the length to be determined by the Claimant within 20 business days of termination.
- •The Claimant elected a twelve-month non-compete period, starting after D1's notice period.
- •The defendants argued the non-compete clause was unenforceable due to uncertainty and unreasonableness.
- •The Claimant argued the clause was enforceable and sought an expedited trial.
Legal Principles
Interim injunctions require a serious issue to be tried, inadequacy of damages, and balance of convenience.
American Cyanamid [1975] AC 396
Restrictive covenants are prima facie in restraint of trade and must be reasonably necessary to protect legitimate business interests.
Lawrence David v Ashton [1989] ICR 123; TFS Derivatives Ltd v Morgan [2005] IRLR 246
The test for a 'serious question to be tried' in an interlocutory application is not demanding.
Planon v Gilligan [2022] IRLR 684
A non-compete clause must be certain at the time the contract is entered into.
Patsystems v Neilly [2012] IRLR 979
A clause is not void for uncertainty if it provides a means for resolving it.
Chitty on Contract (cited)
In inducement claims, legal advice that a clause is likely unenforceable can defeat the claim.
Allen v Dodd [2020] IRLR 387; OBG Limited v Allan [2008] 1 AC 1
In deciding whether to grant equitable relief, consider unreasonable delay and whether granting relief is unjust.
Legends Live v Harrison [2017] IRLR 59; Spry on Equitable Remedies (cited)
Outcomes
The Claimant's application for an interim prohibitory injunction was refused.
The court found unreasonable and unexplained delay by the Claimant in bringing the application, causing prejudice to the defendants. The balance of convenience favored refusing the injunction, particularly given the arguable unenforceability of the non-compete clause due to uncertainty and potentially excessive length and breadth.
An expedited trial was ordered.
To resolve the enforceability of the non-compete clause before it expires and to avoid further prejudice to the parties.