CF Partners (UK) Llp v Barclays Bank Plc & Anor

Confidential information may consist of a valuable combination of material, insight and presentation, even where some underlying elements are public. A recipient who uses that information for a purpose outside that for which it was supplied commits a breach of confidence. A change in perspective alone is insufficient, but misuse may be inferred where confidential information informs a course of dealings.

Contractual confidentiality terms ordinarily guide the equitable duty. They do not necessarily exhaust it where conscience requires wider protection. Exclusivity, however, is a contractual matter and must be established by the agreement’s terms. A clear termination of exclusivity will be effective according to its language.

Where confidential information is used to develop a commercial opportunity, a reasonable-release fee may be assessed by a hypothetical negotiation under the Wrotham Park approach.

CF Partners developed a proposed leveraged acquisition of Tricorona, a carbon-credit developer with a substantial portfolio of largely unhedged Large Hydro CERs. It supplied Barclays, through IVC, with portfolio analysis, risk adjustments and indications of compliance-buyer demand in order to obtain acquisition finance and advice.

Barclays had earlier considered Tricorona but had rejected it. After receiving the Arctic Fox/Carbonara material, Barclays and Tricorona’s management developed a strategic relationship. Barclays ultimately acquired Tricorona under Project Pomodoro. CFP alleged breach of confidence and exclusivity. Tricorona counterclaimed for CFP’s limited misuse of its information.

The central questions were whether the information remained confidential, whether the defendants used it outside the permitted purpose, and the proper remedy.

1. Confidence claims succeeded in part. Both Barclays and Tricorona owed CFP duties of confidence. Barclays’ equitable duty was informed, but not conclusively confined, by the IVC/Barclays confidentiality agreement. Tricorona’s equitable duty was co-extensive with its contractual duty under its confidentiality agreement with CFP.

2. CFP’s spreadsheets, the combined presentation of the portfolio, and the evidence of potential compliance-buyer demand had the necessary quality of confidence. Although some constituent information was publicly accessible or derived from Tricorona, CFP’s analysis and presentation gave Barclays a materially sharper understanding of the portfolio’s value and possible monetisation.

3. Barclays misused that material from early 2009. Ms Patel’s and Barclays’ development of a strategic relationship with Tricorona was informed by information obtained for Project Arctic Fox/Carbonara and was directed to exploiting the portfolio for Barclays’ benefit. Actual use, including subconscious use, rather than a mere change of outlook, was established.

4. The actionable misuse did not, however, establish a causal continuum to Barclays’ later acquisition of Tricorona. By September 2009, market developments had made the central insight about Large Hydro CERs generally accessible. The individual confidential materials nevertheless continued to be used improperly in later internal work.

5. CFP had no enforceable contractual exclusivity right against Barclays. The Exclusivity Release was unambiguous and validly released any relevant restriction. It could not be rectified, rescinded or qualified by estoppel. The claims based on exclusivity and inducement of its breach therefore failed.

6. An account of profits was refused. The proper remedy was negotiated damages under the Wrotham Park approach. In a hypothetical January 2009 negotiation, a reasonable price for release from the confidence obligations was €10 million in the round. CFP’s own limited misuse of Tricorona’s material was too small to require separate quantification, but was taken into account.

not stated in the judgment.