Can ex-Directors withhold Confidential Documents?

In Eurasian Natural Resources Corporation Ltd v Judge [2014] EWHC 3556 (QB), the High Court held that there were no grounds for finding that a director was subject to an implied term requiring delivery up of confidential documents after termination of his appointment.

The director’s service agreement provided that all information acquired during his appointment was confidential and should not be disclosed to third parties or used for any reason other than in the interests of the company, either during the appointment or following termination, without prior clearance; but included no express term requiring him to deliver up confidential documents on termination. Had it been the “obvious but unexpressed intention of the parties”, one would have expected it to be incorporated into the contract.

The Court commented that there was also no wider obligation of confidence (embracing delivery-up) arising from the director’s fiduciary duties. Where parties to a contract have negotiated and agreed the terms governing how confidential information may be used, their respective rights and obligations are then governed by the contract and in the ordinary case there is no wider set of obligations imposed by the general law of confidence.

As always, the lesson is to expressly include the obligation to deliver up the documentation, if that is what is wanted; dont expect the Courts to fill in the blanks.

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