S v A

For an interim injunction restraining disclosure in alleged breach of a contractual non-disclosure obligation, the court must ordinarily be satisfied that the claimant is more likely than not to succeed at trial where the order would affect freedom of expression. The court may depart from that threshold in appropriate circumstances. A clear negative covenant ordinarily supports injunctive relief, but the court retains a discretion to consider the balance of convenience. Contractual scope depends on the language of the agreement, read with its commercial purpose and relevant background. A freestanding prohibition on disclosing the existence of discussions may extend to discussions held before the agreement, particularly where the agreement expressly contemplates earlier discussions and contains no temporal limitation.

S, a pharmaceutical company, applied for an interim injunction restraining A from disclosing the existence of without prejudice settlement discussions. The disclosure was intended to support A’s proposed claim for a declaration of non-infringement in Massachusetts by establishing jurisdiction there.

The parties’ non-disclosure agreement was governed by English law. A contended that it covered only information provided after its effective date and therefore did not protect an earlier meeting or earlier discussions. S argued that the agreement protected the existence of past and future discussions. The central issues were the proper construction of the agreement and whether interim relief should be granted.

1. Interim relief granted. S established that it was more likely than not to succeed at trial on the construction of the non-disclosure agreement. The court therefore satisfied the general threshold identified in Cream Holdings Ltd v Banerjee [2004] UKHL 44.
2. The usual American Cyanamid considerations remained relevant. Although a clear breach of a negative contractual covenant will normally justify an injunction without separate consideration of adequacy of damages or the balance of convenience, the court considered those matters in this case, following the principle discussed in Dyson Technology Ltd v Pellerey [2016] EWCA Civ 87 at [69]–[74].
3. The recital was forward-looking, but it described the background and purpose of the agreement rather than defining the scope of its operative obligations. The definition of confidential information was not, at least prima facie, limited to information supplied after the agreement because it included information relating to the proposed agreement or its evaluation after the agreement.
4. Clause 3 was particularly important. It independently prohibited announcing or divulging the existence or content of discussions in contemplation of the proposed agreement. Its ordinary meaning extended to discussions before the agreement. The clause expressly incorporated the legal-disclosure exception but not the exceptions for information already known or previously possessed. It was also not subject to the same temporal limitation as the confidentiality obligations. Clauses 4 and 5 confirmed that pre-agreement discussions were within the parties’ contemplation.
5. Construing the agreement objectively, in accordance with the commercial purpose identified in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912, S was more likely than not to succeed.
6. Without an injunction, the Massachusetts court might determine jurisdiction before trial, making the disclosure effectively determinative and causing prejudice that would be difficult to quantify. S did not prevent A from pursuing equivalent relief in Virginia. The balance of convenience therefore favoured S.

Not stated in the judgment.