The High Court has granted an interim injunction to restrain a breach of contract and upheld the application of the American Cyanamid test except in extreme circumstances.
The case involved an application for an injunction to restrain an alleged breach of contract. Hildyard J held as follows:
- The only exception to the application of the American Cyanamid test was “where the relief sought, if granted, would as a practical matter foreclose any further assessment of the true merits of the legal claim and put an end to the action because such relief effectively decides the contest”. This was not the case here, as the trial would be expedited.
- If the applicant delayed the injunction application, this may affect the status quo of the case; “especially in the context of applications to restrain breaches of covenant and invasion of proprietary rights and interests, the relevant status quo is that obtaining immediately prior to the commencement of the breaches alleged, rather than the date of the hearing”.
- The injunction granted allowed the respondents to carry on some business (subject to conditions) until the date of the trial, so that they would not be driven into liquidation, which would effectively eradicate the applicant’s claim for damages or profits.
Allfiled UK Ltd v Eltis and others [2015] EWHC 1300 (Ch), 19 May 2015
