Rogers & Norton Secure High Court Injunction to Protect Business Acquisition Covenants
Our Rogers & Norton Commercial Litigation Team, led by Peter Hastings and supported by Abby Kerswill, recently secured a High Court injunction on behalf of a client who had acquired a business subject to covenants including:-
- Not to use client information;
- Not to solicit clients on behalf of a competing business;
- Not to carry on business as a financial advisor.
High Court proceedings were issued as it was our client’s case that the defendant had breached the covenants. The Court accepted our submissions and evidence and granted the injunction. The key principles and cases are:-
- The Court must consider whether damages would be an adequate remedy (American Cyanmid Co v Ethicon Ltd).
- If damages are inadequate or the breach involves irreplaceable contractual rights, an injunction may be more appropriate.
- The balance of convenience test does not apply when a breach of a negative covenant is clear or undisputed (Araci v Fallon).
The judgement not only provides immediate protection for our client’s business interests but also includes an order requiring the defendant to pay our client’s legal costs.
Key takeaways include:
- Enforceable covenants – the Courts remain prepared to uphold reasonable restrictions designed to protect legitimate business interests.
- Urgent injunctive relief – Speed of action is critical as delays can undermine the availability of remedies.
- Evidence-led strategy – Clear documentation of breach and commercial harm is essential to securing interim relief.
Restrictive covenants are often central to the value of a business acquisition. When they are breached, swift legal intervention can be the difference between preserving and losing the benefit of the deal. Our team’s success in this case demonstrates our ability to act decisively and effectively in high-stakes disputes.
How we can help
We regularly advise buyers, sellers and investors on:
- Business Acquisition Agreements and post-completion protections
- Restrictive covenant disputes
- Interim injunction applications
- Enforcement of non-complete and non-solicitation clauses
If you require legal advice or assistance, please contact Peter Hastings at ph@rogers-norton.co.uk.
For more information on our legal services or to arrange an appointment with a member of our Commercial Litigation team, contact us at 01603 666001, email enquiries@rogers-norton.co.uk or complete the ‘Request a Consultation’ enquiry form on our website.
*This article is provided for general information purposes only and does not constitute legal or any other professional advice.