Sectrack NV v Satamatics Ltd & Anor

For interim injunctive relief, the claimant need only show a serious issue to be tried. Where confidential information has arguably been misused to obtain an unfair competitive advantage, springboard relief may continue for so long as that advantage may remain. The relevant period depends on the effect of the misuse, not merely the seriousness of the conduct.

Under the American Cyanamid principles, the court must consider the adequacy of damages and the balance of convenience. Material non-disclosure on an without-notice application does not automatically require discharge. The court retains a discretion and may continue the injunction where the merits and discretionary factors justify that course, subject to appropriate protection for the respondent.

Sectrack, a Belgian distributor of satellite tracking products, sought continuation of an injunction granted without notice by Aikens J against Satamatics and its former employee, Jan Leemans. The injunction restrained approaches to Sectrack’s customers, protected confidential information, required preservation and disclosure of records, and was later varied by consent.

Sectrack alleged breach of contractual anti-circumvention obligations, misuse of confidential information, and related wrongdoing. The defendants applied to set aside the injunction for alleged non-disclosure and other reasons. Satamatics also sought further fortification of Sectrack’s cross-undertaking in damages. The central questions were whether there were serious issues to be tried, whether interim relief remained justified, and what consequences followed from the alleged non-disclosure.

1. Continuation of injunction. The claimant satisfied the American Cyanamid criteria. Its construction of clauses 2.3 and 2.8 of the Distribution Agreement was fully arguable. The first defendant’s negotiations with customers and its refusal to undertake not to continue those activities justified continuation of the contractual injunction until trial.
2. Confidential information. Applying the three questions identified in Coco v Clark [1969] RPC 41, there was a serious issue that customer information, contact details, business volumes, pricing, contracts and related material were confidential. The distinction between protected information and an employee’s general skill and knowledge required careful consideration at trial. Information retained electronically could be treated no differently in principle from a copied order book, as illustrated by Robb v Green [1895] 2 QB 1.
3. The approach in Lansing Linde v Kerr [1991] 1 WLR 251, as approved in FSS Travel and Leisure Systems v Johnson [1998] IRLR 382, supported the arguability of confidentiality where information was used in the business, its dissemination was limited, and misuse was likely to harm the employer. The claimant also showed an arguable case that both defendants knew of and participated in the misuse.
4. Springboard relief. The criteria in Roger Bullivant Ltd v Ellis [1987] ICR 464 were satisfied. The duration of relief depended on the continuing unfair competitive advantage, including the possible misuse of customer, volume and pricing information. The defendants’ conduct did not determine the duration. The second defendant’s continuing failure to provide ordered disclosure made the extent of the advantage especially difficult to assess.
5. Non-disclosure and fortification. The claimant seriously failed to draw attention to the parent company’s financial position, but discharge was discretionary. Since the injunction was otherwise justified and the claimant had gained no material advantage, it was disproportionate to discharge it. A bank guarantee of Can$100,000 was sufficient. The application for further fortification was refused.
6. The injunction was continued until trial or further order. An expedited trial was ordered, to be heard not before 1 April 2008. The applications to set aside the injunction were dismissed.

First-instance decision. The judgment records no appeal.