Introduction

In Pando Finance Limited v Ng Ean Kiam [2026] HKCFI 1046, the Court of First Instance (“CFI”) refused to grant an interlocutory injunction sought by an employer against its former employee who joined a competitor. The employer relied on a confidentiality clause and a non-compete clause under the employment contract, and sought a springboard injunction. The CFI dismissed the employer’s springboard injunction application on the basis that the employer had not shown good or better prospects of success than the employee and that the balance of convenience favoured the employee.

A “springboard” injunction is a type of injunction designed to remove or limit the unlawful advantage or unfair competitive head-start that a former employee has gained through such unlawful activities. In August 2019 edition of our employment newsletter, “Protection for employers against team move (Part II): Springboard Injunction”, we discussed in detail QBE Management Services (UK) Limited v Dymoke [2012] IRLR 458, the leading English authority in springboard injunction, which is also cited in Pando Finance Limited v Ng Ean Kiam. Please click here for our article.

Background

The plaintiff, Pando Finance Limited (“Employer”), is an asset management firm engaged in virtual asset management and investment. The Employer brought proceedings against a former employee (“Employee”), who was employed as a portfolio manager. The Employee’s key duties included managing investment funds, originating investment ideas and fund raising activities, performing due diligence and executing on investment opportunities within the secondary market, and marketing and distributing funds to professional investors.

The terms of employment were contained in a service agreement dated 22 February 2024 and a confirmation letter dated 21 May 2024 (collectively, “Employment Contract”).

Under the Employment Contract, the confidentiality clause (“Confidentiality Clause”) provided:

“The Executive shall not, at any time during her employment or thereafter, without the Employer’s authorization, divulge or communicate to any person, except to those of the officials of the Group whose province is to know the same, any of the trade secrets, or accounts, financial or trading information or other confidential or personal information which the Executive may receive or obtain in relation to the business, finances, dealing or private affairs of the Group …”.

The non-compete clause in the Employment Contract (“Non-Compete Clause”) provided:

“The Executive further undertakes and covenants that while remaining as a director and/or Executive of the Group and for a period of 1 year after termination, he/she will not participate, assist, manage, operate, provide services to, advise, consult, be concerned with, engaged or interested in, any other business or entity in any manner which directly or indirectly competes with the business of the Group existing during the time the Executive holds directorship in or is employed by the Group …”.

The Employee resigned on 9 January 2025, with his last day of employment on 8 April 2025, and joined MicroBit Capital Management Limited (“Competitor”) in mid-April 2025 as its managing director and senior portfolio manager. The Employer applied for an interlocutory injunction pursuant to the Non-Compete Clause to restrain the Employee from participating in any business that is in direct or indirect competition with the Employer’s business, including the Competitor’s, for a 12-month period (“Non-Compete Injunction”).

Springboard injunction

The Employer attempted to justify the Non-Compete Injunction based on the springboard doctrine. The Employer alleged that the Employee had access to confidential information relating to the Employer’s applications for its exchange-traded funds (“ETF”) products to the Securities and Futures Commission (“SFC”), including “legal paperworks, SFC filings, and all communications including email communications with third party regulatory bodies and authorities including the SFC”, and had divulged or would continue to divulge such information for the benefit of the Competitor, thereby enabling the Competitor to gain valuable business, market data and experience in applying for crypto-related investment products.

The CFI referred to QBE Management Services (UK) Limited v Dymoke, the leading authority, which stated that springboard relief is intended to deprive a wrongdoer of an unfair advantage obtained through unlawful conduct, rather than to punish the wrongdoer.

The CFI highlighted the relevant principles of springboard relief as follows:

1.      the defendant must have obtained a head start as a result of unlawful acts;

2.      the unlawful advantage enjoyed by the defendant must still be operative at the time relief is sought;

3.      springboard relief should simply restore the parties to the position they would have occupied but for the defendant’s misconduct;

4.      springboard relief is merely to provide fair and just protection for unlawful harm on an interim basis. What is fair and just will be measured by (i) the effect of the unlawful acts upon the plaintiff; and (ii) the extent to which the defendant has gained an illegitimate competitive advantage;

5.      springboard relief will not be granted where a monetary award is an adequate remedy; and

6.      the burden is on the plaintiff to spell out the precise nature and period of the competitive advantage. A short term advantage will not be sufficient.

 

The CFI held that, even if the Employee had played a role in the Competitor’s ETF applications, there was no reasonable basis to infer that he must have relied on the Employer’s confidential information rather than public materials or his own skill and knowledge. Further, it is a general principle that an employer is not entitled to restrain a former employee from deploying his own skill and knowledge acquired in the course of employment for the benefit of himself and his new employer (PCCW-HKT Telephone Ltd v Aitken & Or [2009] 2 HKLRD 274).

The CFI further held that there was no evidence of ongoing misuse of confidential information or of any continuing unlawful advantage that could justify springboard relief. This was reinforced by the Employee’s undertaking to comply with the Confidentiality Clause, which the CFI considered capable of protecting the Employer’s position.

Injunction and non-compete

Threshold of granting interlocutory injunction

The CFI should consider the following when granting an interlocutory injunction:

1.      whether there is a serious issue to be tried;

2.      the adequacy of damages; and

3.      whether the balance of convenience lies in favour of a grant.

 

In the present case, since the non-compete period would expire before trial, granting the injunction would effectively amount to final relief. Therefore, the Employer had to show good prospects, or better prospects of success than the Employee, rather than merely a serious issue to be tried.

Enforceability of the Non-Compete Clause

The CFI found that the Employer had not demonstrated good or better prospects of success in establishing that the Non-Compete Clause is enforceable for the following reasons:

1.      the Non-Compete Clause contained no geographical limit and purported to have worldwide effect, which was considered too wide;

2.      the Employer failed to justify the 12-month restriction period, as there was no evidence of any particular operational strategies or treatment of special information that would require 12 months; and

3.      the wording of the Non-Compete Clause was too broad to catch not only virtual asset firms but also traditional asset management firms that might directly or indirectly compete with the business of the Employer and its group companies.

Breach of the Non-Compete Clause

The CFI also found that the Employer had not shown good or better prospects of proving breach of the Non-Compete Clause for the following reasons:

1.      the Employer failed to identify precisely the information allegedly requiring protection, with some of the materials relied on appearing to be public in nature;

2.      the Employee’s evidence showed that his responsibilities did not involve making SFC applications for the Employer’s ETF products;

3.      the Competitor’s draft prospectuses had been prepared before the Employee joined; and

4.      the Employee’s know-how in dealing with the SFC was, in principle, part of his own skill and knowledge rather than something the Employer could restrain through a covenant of this breadth.

Balance of convenience

The CFI held that the Employer had not shown a real risk of irreparable damage if relief were refused, especially given the lack of evidence of actual misuse and the Employee’s confidentiality undertakings.

On the contrary, there was a real risk that the Employee would lose his job and suffer longer-term prejudice to his career and reputation if restrained from continuing in his current role. The CFI also treated the Employer’s delay in seeking relief as a relevant factor, particularly because the application, if granted, would effectively have given final relief before trial.

Takeaway

This case reiterates the general principle that an employer cannot restrain a former employee from using his own skill and knowledge acquired during employment. Employers seeking to restrict a former employee from joining a competitor, especially by way of springboard relief, must identify the alleged confidential information with precision and provide evidence of ongoing unlawful advantage. General assertions that a former employee had access to sensitive business information and applied such information to a competitor’s business will not by themselves justify injunctive relief. As always, if in doubt, it is advisable to seek legal advice.

 

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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

Published by ONC Lawyers © 2026