As has been widely reported in the financial press, investment bankers UBS obtained an interim injunction to ‘stop the rot’ after mass staff resignations in May 2008. UBS discovered that all the departing employees were intending to join new rivals Vestra which opened its doors for business on 1st August. UBS’ application to the High Court was heard the day before and the court was satisfied that senior departing employees had not honoured their contractual obligations and should be prevented by injunction from competing against UBS until the full claim against them could be heard.
Point to note –
- As has also been widely reported, UBS and Vestra have now agreed terms, making a further court hearing unnecessary. This is quite common in cases where the time and expense involved in preparing for a full court hearing would be uncommercial. However, it may be necessary for some parties caught by surprise, like UBS, to use the option of an interim injunction to get themselves into a reasonable negotiating position. Any such action must be taken without any delay, and on specialist advice, if it is to have any chance of success.