FML Timeline: CF Partners (UK) LLP v Barclays Bank plc, Bryggpipan AB (formerly known as Tricorona AB)

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In 2008, CF Partners approached Barclays, via an intermediary company called IVC International Limited, for financial assistance and advice on a proposed acquisition of Bryggpipan (then known as Tricorona). During the course of the engagement, Barclays received information from IVC (originating from CF Partners) relating to the prospects of Tricorona which, pursuant to the terms of a Confidentiality Agreement entered into between IVC and Barclays.

Unbeknown to CF Partners, Barclays had previously considered acquiring Tricorona but had declined to do so due to concerns about Tricorona’s management.

Negotiations between Barclays and IVC were unsuccessful and, on 30 March 2009, Barclays, IVC and CFP entered into an “Exclusivity Release” which released Barclays from an obligation in the confidentiality agreement to not approach or enter into any transaction with Tricorona.

In or around September 2009, Barclays began a strategic partnership with Tricorona which culminated with Barclays purchasing Tricorona in July 2010. Barclays subsequently sold Tricorona at a significant profit in May 2012.

CF Partners issued a claim seeking damages and/or an account of profits from Barclays for the breach of an exclusivity agreement and the misuse of confidential information. CF Partners also claimed that Barclays had induced Tricorona to breach confidentiality obligations in an agreement between it and CF Partners and that both Barclays and Tricorona were both liable for inducing the other to breach of obligations of confidence owed to CF Partners.

Decision

CF Partners was partially successful in its claim.

The Court held that:

Exclusivity

An obligation of exclusivity can only arise by contract and, given that CF Partners had not been party to the Confidentiality Agreement (which contained the exclusivity obligations) Barclays did not owe a duty of exclusivity to CF Partners. Even if this was incorrect (due to the fact that IVC was effectively acting as an intermediary for CF Partners) any such duty had been discharged due to the Exclusivity Release.

Confidential information

A duty of confidence, whether arising from a contract or in equity, arises where the recipient of the information knew or ought to have known that the information would be regarded as confidential.

The Court held that both Barclays and Tricorona had misused confidential information provided to them by CF Partners for the purpose of establishing the strategic partnership which ultimately led to Barclays’ acquisition of Tricorona.

In the case of Barclays, this constituted a breach of an equitable duty of confidence informed (but not determined) by the Confidentiality Agreement. The Court identified a number of factors which gave the information provided to Barclays the requisite quality of confidentiality which are set out below.

Joint Liability / Inducement

Barclays and Tricorona were jointly liable for the other’s breaches. However, neither party had induced the other to commit the respective breaches.

Noteworthy/ Novel points

In order to be capable of giving rise to a duty of confidence, information:

• Must be clear and identifiable (Campbell v MGN Ltd [2004]).
• Must not be trivial or useless. This is not determined by the commercial value of the information, but whether the preservation of the confidentiality of the information is of substantial concern to the disclosing party (this is not a high threshold) (Force India Formula One Team Limited [2012]).
•  Must be inaccessible. Information cannot be confidential if it is common knowledge or generally accessible and in the public domain. The accessibility of information will depend on the specific facts of a case.

A collation or particular presentation of information, which in its individual parts is not confidential, may have the quality of confidence and therefore give rise to a duty of confidence - eg a customer list comprising publically known names (Saltman Engineering v Campbell Engineering).

Equally, individual pieces of information which may have limited value and only be marginally inaccessible, may in combination and in particular hands have requisite composite value to overcome the ‘trivial’ and ‘useless’ thresholds.