Commercially sensitive information inevitably often passes between contracting parties and, in such cases, confidentially agreements are commonplace. One such agreement was considered by the High Court in the context of a defence supply contract.
Company A had contracted with company B to supply communications technology to an overseas air force. The relationship involved company B being entrusted with intellectual property information belonging to company A and a confidentiality agreement was therefore reached. Company B was subsequently taken over by a concern that had a close relationship with one of company A’s trade rivals.
In those circumstances, company A grew concerned that its information would be leaked and obtained an emergency injunction to hold company B to the agreement. In refusing to extend that order, however, the Court noted that company B had twice given assurances that it recognised its confidentiality and non-disclosure obligations and would honour them.
Arguments that company B was being disingenuous as to its true intentions were rejected. Company A had failed to establish a good arguable case that there was a real risk that its confidential information would be imparted to others by company B unless it was restrained from doing so by the Court.