KB-2025-0001228 - [2025] EWHC 2897 (KB)

Jonathan Friend, the First Defendant is the founder of, and a former director and employee of, the Second Claimant (“Friend MTS”). He remains a non-executive director (‘NED’) of the First Claimant (“FMTS”) and is, together with his family, a substantial shareholder in FMTS, registered in Jersey, the parent company of a group of companies (together, ‘the Friend Group’). The Friend Group provides technology designed to combat online piracy to many of the biggest sports, media and entertainment organisations in the world. Friend MTS, registered in England and Wales, is the principal trading subsidiary within the Friend Group.

In 2022, a significant investment was made into the Friend Group by NorthEdge Capital LLP (“NEC”), a private equity firm. At the time of the investment Mr Friend entered into a Service Agreement (the “SA”) with Friend MTS and an Investment Agreement (the “IA”) with NEC, each dated 19 July 2022, the relevant terms of which are dealt with further below.

It was not long before divisions emerged between Mr Friend and NEC’s appointees to the management of the Friend Group, and in particular the new CEO, Mr Shane McCarthy. Mr Friend resigned as an employee of Friend MTS on 6 February 2024. Mr Friend’s notice period was cut short by the Claimants, terminating his employment on 9 October 2024, with payment in lieu of the remaining notice period. He was removed as a director of Friend MTS on 22 November 2024. The circumstances of Mr Friend’s departure from Friend MTS, and his continued directorship of FMTS are matters of dispute between the parties elsewhere, including unfair prejudice proceedings in Jersey (the “Jersey Proceedings”) brought by Mr Friend and other shareholders in FMTS and an employment tribunal claim brought by Mr Friend relating to the termination of his employment, and various alleged detriments during his employment (“the ET Proceedings”). Both of these proceedings were on foot prior to this claim; neither has yet been determined.

In this claim, the Claimants alleged that, since his resignation, Mr Friend has been engaged in multiple discussions with the Friend Group’s customers, potential customers, potential partners and competitors, and has divulged confidential information. It is said that he has done so secretively, continually refusing to inform the Claimants of his discussions, and he has done so in order to compete or compete in the future with the Friend Group. As a result, it is alleged that Mr Friend is in breach of restrictive covenants both under the SA and IA, and that he is in breach of his fiduciary duties as director of Friend MTS (until 22 November 2024) and FMTS (throughout). Upon issuing the claim on 9 April 2025, the Claimants applied for an interim injunction.

Mr Friend denies having competed with the Claimants or breaching any of his restrictive covenants, and contends that he has no intention of doing so. He denies setting up a rival business, misusing the Claimants’ confidential information, or doing anything to damage the Claimants’ reputation. On the contrary, he contends that he has acted, pursuant to his duties under the SA (prior to its termination) and thereafter his continuing fiduciary duties as a NED of FMTS, to protect and advance the business not least because it is a business in which he (and his family) retains a substantial shareholding. Mr Friend asserts that these proceedings form part of a campaign to put pressure on him in relation to the Jersey Proceedings and the ET Proceedings.

Faced with the interim injunction, Mr Friend provided undertakings which were contained in a consent order signed by Adrian Eardley KC (sitting as a Deputy High Court Judge) (the “Interim Injunction Order”), which also directed an expedited trial of the issues of liability and injunctive relief. This is the judgment which follows that trial.

I note that both the pleadings and the witness evidence traverse areas of dispute which overlap with those issues for determination in the Jersey Proceedings and/or the ET Proceedings. In the context of the specific claims for consideration in this action, both sides accept that such areas of dispute are essentially background. Neither side seeks a determination by me of such disputed facts. This judgment does not do so, and plainly I draw no inferences either way from disputed facts.

As at the date of the trial, the post-termination restraints in the SA had expired (running, as they did, for 12 months until 9 October 2025). The Claimants accepted that there was no basis for ongoing relief to enforce those restrictions. Mr Friend did not challenge the enforceability of the remaining obligations in the Investment Agreement and accepted that he was subject to ongoing restraints in the Investment Agreement. It was the Claimants’ position that in light of what it said was the effect of the injunction to date (a characterisation not accepted by Mr Friend), it did not seek any further injunctive relief to continue beyond trial.

Unlike many expedited trials following an interim injunction application, this trial is therefore not concerned about whether or to what extent the continuation of injunctive relief would be justified. The ambit of the trial is, therefore, limited to whether the Claimants make good the breaches they had alleged in their Particulars of Claim so as to establish a liability or liabilities, the causative effect of which are to be heard in due course.