Interactive Investor Trading Ltd v City Index Ltd (2011)
The court considered the entitlement to commission and obligations relating to non-solicitation of clients and the use of confidential information in a six-month "wind down" period following the termination of agreements relating to the provision of "branded trading" of contracts for differences and spread betting.
The appellant (C) appealed against a decision on preliminary issues on the interpretation of agreements between it and the respondent (R) and R cross-appealed. C was a provider of services for trading in contracts for differences (CFDs) and spread betting. R was a provider of online services. The parties entered into two agreements relating to "branded trading" of CFDs and spread betting. Under the agreements R was responsible for maintaining part of its website which was dedicated to branded trading and linked to an interactive trading platform made available by C on which clients introduced by R could trade a number of branded CFD products. C paid R a share of the commission paid by the client on those trades. C gave notice to terminate the agreements in accordance with their terms and the following issues arose which were determined by the judge as preliminary issues: R's entitlement to a share of commission on trades during a six-month "wind down" period; C's entitlement to attempt to persuade clients to continue to use its trading services after the expiry of the wind down period; and the effect of the provisions relating to confidential information. The judge held that R was entitled to commission on trades executed during the wind down period; that the names, addresses and contact details of the clients constituted information confidential to R; and that C could not actively put itself forward to clients as the preferred trading service provider once the agreements had come to an end. C appealed and R cross-appealed on the one point on which it lost, contending that C was under an obligation to give notice of termination of contract to clients to take effect at the end of the wind down period. C submitted that the agreements defined the wind down period as the period of six months after termination of the agreement so that R had no entitlement to a share of the commission paid on trades executed by clients during the wind down period because those were not trades executed "during the agreement"; in the same way C was not prevented from marketing to R's clients during the wind down period. C also submitted that the details of clients introduced to it by R were not confidential information.
1) The use of the expression "during this agreement" or its equivalent was consistent and led to the conclusion that C was right that there should be no commission sharing in respect of trades executed during the wind down period. There was no reason to construe those words in the commission payment provision as extending, exceptionally, to the wind down period (see paras 28-30 of judgment). (2) Similarly the expression "during this agreement" in the restrictive covenant preventing C marketing its service to R's clients did not extend to the wind down period (para.31). (3) The definition of "confidential information" implied that the imparting by R to C of the names, addresses and contact details of its clients was not to be regarded as the disclosure of confidential information. On the correct interpretation of the agreements, the names, addresses and contact details of clients imparted by R to C were not to be regarded as information confidential to R (para.32). (4) The agreements could not be regarded as imposing on C an obligation to give notice to terminate contracts with clients with effect from the expiry of the wind down period (para.35). (5) The difference in terms between the agreement relating to CFDs and that relating to spread betting did not lead to different conclusions in respect of the latter agreement (paras 36-39).
Appeal allowed, cross-appeal dismissed
View all cases
20 Jul 2011
Court of Appeal
Ward LJ, Black LJ, Tomlinson LJ
LTL 20/7/2011 :  EWCA Civ 837