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28-11-2014

In Eurasian Natural Resources Corporation Ltd v Judge, the High Court held that there were no grounds for finding that a director was subject to an implied term requiring delivery up of confidential documents after termination of his appointment.

The director's service agreement provided that all information acquired during his appointment was confidential and should not be disclosed to third parties or used for any reason other than in the interests of the company, either during the appointment or following termination, without prior authority.

However, there was no express term requiring him to return confidential documents on termination.

The Court held:

  1. Had it been the "obvious but unexpressed intention of the parties", you would have expected to see a term in the agreement
  2. It had been shown no legal authority, code of practice, guidance or evidence to suggest that such a requirement was the norm for directorships.
  3. There would be difficulties in complying with such a duty, especially for individuals who took on multiple directorships.
  4. There was also no wider obligation of confidence (embracing delivery-up) arising from the director's fiduciary duties.

It followed that there was no reasonable prospect of a claim for relief based on an implied term requiring delivery up succeeding.

Sarah Rushton (srushton@moonbeever.com)

This is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information contained.

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