Craft Silicon Limited v Niladri Sekhar Roy [2018] KEELRC 1059 (KLR)
The bottom line
#A Kenyan court refused to stop a former employee from working for a competitor, but did bar him from poaching his old employer's clients for one year.
What this practically means
#Executive summary
#Key legal issues
#Enforceability of the non-compete/restraint of trade clause in the employment contract
The clause was held to be a restraint of trade which the court declined to enforce broadly at the interlocutory stage because it was vague, uncapped geographically and stifled the Respondent's right to earn a living
Applying Giella vs Cassman Brown, the court considered whether a prima facie case and enforceable covenant existed. Relying on Petrofina vs Martin and local precedents, the court noted restraints of trade are presumptively unenforceable unless reasonable. Clause 9(c) barred the Respondent from any competing employment without geographical limits, which the court found oppressive and vague, making full enforcement inappropriate at the interlocutory stage.
Whether to restrain the Respondent from contacting the Claimant's clients
The court allowed this relief in part, restraining the Respondent from contacting the Claimant's customers for the one-year contractual restraint period
While refusing the employment-wide restraint, the court found that the specific covenant in Clause 9(d) prohibiting engagement with the Claimant's clients could be preserved on an interim basis, balancing the Claimant's client relationships against the Respondent's ability to earn a living, pending hearing of the main claim or expiry of the restraint period, whichever is shorter.
Whether the Respondent's current employer competes with the Claimant
The court found it could not determine the point of competition on the material before it without joining the current employer
The court observed that understanding whether Temenos East Africa competes with the Claimant required further evidence about the businesses and the Respondent's roles. The Respondent deponed that his current role dealing with Cloud Banking for NBFCs in the Middle East and Africa was distinct from his previous role, and the court accepted that determining competition would require dragging the current employer into court, which would be costly to both parties.
Legal principles established
#- Contracts in restraint of trade are generally unenforceable unless they are reasonable as between the parties and not injurious to the public interest
- An employer cannot restrain an employee from earning a living; a non-compete clause lacking geographical definition may be unenforceable
Court orders
#- 1.The Respondent shall not contact the Claimant's customers in any way during the period of one year since he resigned from employment as per Clause 9(d) of the contract, pending the hearing and determination of the claim or until the period of restraint elapses, whichever is shorter
- 2.Costs of the application to be in the cause
- Jurisdiction invoked
- Section 12(3)(i) of the Employment and Labour Relations Act and Rules 17(1), 17(3) and 17(5) of the Employment and Labour Relations Court (Procedure) Rules 2016
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Hotel Online Kenya Limited & 2 others v Kamau & another (Cause E932 of 2023) [2024] KEELRC 121 (KLR)[2024] KEELRC 121 (KLR)2 Feb 2024
Cite this brief
#Cite this brief
Caselaw, "Craft Silicon Limited v Niladri Sekhar Roy [2018] KEELRC 1059 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1059/eng@2018-09-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.