ICBC Financial Leasing Co Ltd v Consultants Group Commercial Funding Corporation (t/a CG Commercial Finance)

A confidentiality and non-circumvention clause must be construed in the context of the agreement as a whole. A non-circumvention obligation linked to confidential information does not generally prevent independent dealings based on public information and a separate approach authorised by the customer. The protected financing must be a sufficiently defined and real opportunity for a customer whom the intermediary is authorised to represent. An intermediary cannot claim protection for speculative transactions outside its mandate. A jurisdiction clause stating that an agreement is subject to the jurisdiction of the English courts may confer exclusive jurisdiction when read in its commercial context.

ICBCL provided lease finance for four LNG carriers owned or acquired by Golar LNG. CGCF alleged that the transaction breached a confidentiality letter containing non-disclosure, non-use, non-circumvention and direct-contact restrictions. CGCF claimed damages and costs connected with proceedings commenced in California. ICBCL denied breach and sought a declaration that the English jurisdiction clause was exclusive.

The principal issues were the construction and scope of the confidentiality obligations, whether Golar remained CGCF’s customer, whether the relevant financing extended to the wider vessel programme, whether ICBCL had misused confidential information or circumvented CGCF, causation and the effect of the jurisdiction clause.

1. Construction of clause A3(iv). The clause had to be read with the confidentiality letter as a whole, including its preamble, confidentiality provisions and clause B4. Its purpose was the protection of confidential information and, at most, protection against being cut out of deals being arranged for authorised customers. It did not impose a freestanding prohibition on dealing with a customer regardless of misuse of confidential information.
2. Confidential information and financing. Information that Golar was seeking finance, the vessel programme and market information were public or already known to ICBCL. The information said to concern funding preferences was not used in the November transaction. The relevant financing had to be an identified opportunity involving a real possibility of finance and a customer whom CGCF had authority to represent. CGCF’s mandate concerned only the first vessel and had expired by 1 July 2013. It had no mandate for the four 2014 vessels.
3. No circumvention or direct-contact breach. The November transaction arose independently through Northcape and Landmark. There was no obstacle represented by CGCF in relation to those vessels, and no confidential information was misused. Clause A8 likewise concerned contact involving use of confidential information and some initiative by ICBCL. Neither requirement was established.
4. Restraint of trade. If clause A3(iv) had prohibited the transaction contended for by CGCF, it would have gone beyond what was reasonably required to protect CGCF’s legitimate interests and would have been void as an unreasonable restraint of trade.
5. Loss. Even if breach had been established, CGCF had no significant or substantial prospect of arranging successful finance. Its damages claims therefore failed on causation.
6. Jurisdiction. Clause B8, read in context, provided for the exclusive jurisdiction of the English court. The Californian proceedings breached that clause, so CGCF could not recover their costs.