‘Shell’ lubricants dealer N M Distributors gets enjoining orders preventing alleged illegal operation of competitor biz set up by employees

The plaintiff, N M Distributors Ltd., has instituted legal proceedings in respect of various defendants, including two employees of the plaintiff and two illegal competitive businesses that had been set up by the employees during the course of employment.

The plaintiff’s position, as set out in its plaint, is that they are importers of various lubricants and oils for motoring and industrial purposes including the world-renowned ‘Shell’ brand. However, two current employees of the plaintiff, the first defendant and his relative, the second defendant, had set up two illegal competing businesses to the plaintiff company during the course of employment with the plaintiff, despite being bound by confidentiality, non-compete and non-disclosure clauses in their contracts of employment.

Whilst in the employment of the plaintiff company, the first defendant had set up competitor businesses ‘Unilube Lanka Ltd.’ (the third defendant company) and ‘Unilube Lanka Trading Ltd.’ (the fourth defendant company).

In this manner, the plaintiff’s position to Court was that during employment of the plaintiff company, the first and second defendants had taken out products of the plaintiff company to supply the illegally setup-competing third and fourth defendant companies, set up fictitious customer accounts in order to facilitate unauthorised transactions, siphoned out business and undisclosed/confidential/commercially sensitive business information of the plaintiff company, withheld monies due to the plaintiff company, and attempted to ‘poach’ employees of the plaintiff company.

The plaintiff’s position to Court was that all such acts had been orchestrated in a gravely dishonest, illegal, and unlawful manner violating the intellectual property rights of the plaintiff, as represented in the plaint. The plaintiff had, as substantial reliefs, sought from Court damages of Rs. 100 million from all defendants jointly and severally and judgement and decree against the first defendant employee for Rs. 83 million.

When the matter was supported in the Commercial High Court, Honourable High Court Judge Priyantha Fernando, being satisfied with the plaintiff’s positions, granted enjoining orders preventing the defendants from engaging in any business activity in any manner whatsoever in competition with the plaintiff company, and from taking out and/or using the undisclosed/confidential/commercially sensitive business information of the plaintiff and from siphoning out any employees of the plaintiff. The matter was fixed for summons returnable for 26 July.

The plaintiff was represented in Court by Counsel Nishan Sydney Premathiratne with Migara Cabral on the instructions of ‘M.R. Omar Associates’.