The High Court referred a dispute between Osmond Ireland on Farm Business Limited and its former agent, Fergal McFarland, to arbitration and dismissed the company’s application for an interlocutory injunction.
In a judgment delivered on 30 June 2010, Miss Justice Laffoy held that the arbitration clause in the parties’ 2001 agency agreement was operative and capable of being performed. She ordered the parties to arbitration under the Arbitration Act 2010. The court did not decide whether McFarland had breached the agreement; that dispute, including the effect of the company’s alleged repudiation, was for the arbitrator.
The company sought an injunction under a clause that restricted McFarland, for one year after termination, from soliciting certain customers in Cavan and Monaghan in relation to product categories he had sold for the business. The company alleged that he had canvassed at least 10 former customers. McFarland disputed the alleged breach and argued, among other things, that the product restriction was unclear and that the company had wrongfully repudiated the agreement. Those issues were not resolved on the injunction application.
The judge found a fair question to be tried about whether the company could enforce the restriction as Cross Vetpharm Group Limited’s successor, and whether McFarland had acted or intended to act in breach. She noted a lack of clarity in the evidence about how the company had become the principal under the agreement. She also said the product categories would need to be identified precisely for any enforceable injunction.
But the company had not shown that damages would be an inadequate remedy if it later proved a breach. The judge considered that orders allegedly solicited in breach could be identified during arbitration and the resulting loss assessed. She also found that the balance of convenience did not favour an injunction, given the restriction’s limited remaining duration, the regulated nature of animal remedies sales and the expectation that arbitration would conclude promptly.
The court therefore dismissed the injunction application. It did not determine the company’s other claims, which included unreturned products, records and money it said McFarland had been required to collect. The judgment also recorded a dispute about whether McFarland had acted contrary to animal-remedies regulations before receiving a licence to solicit orders for another company; it made no finding on that allegation.