Commercial High Court grants interim injunction against Scicom Lanka, Scicom Malaysia and ex-employees of Informatics
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Commercial High Court grants interim injunction against Scicom Lanka, Scicom Malaysia and ex-employees of Informatics

Through a comprehensive order dated 08th September 2020, the Commercial High Court issued an interim injunction against six ex-employees of Informatics International Limited (Informatics), namely Vignarajah Manoharan (1st Defendant), Scicom Lanka (Pvt) Ltd (2nd Defendant), Scicom (Msc) Berhad, Malaysian parent company (3rd Defendant), Malgani Rushika Karunaratne (4th Defendant), K. Kugamohan (5th Defendant), Asanka Rathnadeepa Dhananjaya Dissanayake (6th Defendant), prohibiting them from providing or being employed or being otherwise consulted in providing software solutions that are similar to the software solutions that the Defendants handled during their employment with Informatics.

The Commercial High Court further awarded an interim injunction against Scicom Lanka (Pvt) Ltd (2nd Defendant) and its Malaysian parent company, Scicom (Msc) Berhad (3rd Defendant), prohibiting those companies or any of their employees, servants, agents or assigns from using, selling, marketing or dealing in any manner of the software products of Informatics.

A third interim injunction was granted against all eight Defendants prohibiting them from directly and/or indirectly contacting the clients, customers and prospects of Informatics.The Plaintiff Informatics submitted to the Commercial High Court that they are a pioneer in the IT industry and a company providing highly sophisticated e-government software solutions to institutions both in Sri Lanka and overseas. Informatics also provides core software solutions for insurance and telecommunication sectors. Informatics is further involved in providing enterprise business related software solutions.

The Plaintiff had complained to the Court that all the Defendants, who was employed at the Plaintiff’s company and both 2nd and 3rd Defendant who are Scicom companies, were too privy to confidential and commercially sensitive information pertaining to the unique software products of the Plaintiff company. Upon their resignation they joined Scicom Lanka (Pvt) Ltd (2nd Defendant), with whose parent company in Malaysia, Scicom (Msc) Berhad which they dealt with whilst being employed at Informatics.

The Plaintiff further revealed to Court that soon after the 1st Defendant joined the Scicom Lanka he had solicited away four other ex-employees (4th, 5th and 6th Defendant) of Informatics to resign from their jobs and join him at Scicom Lanka. He had further induced another ex-employee who had resigned from Informatics to join him at Scicom Lanka. The Plaintiff complained to the Court that the 1st Defendant along with these five other ex-employees and the Scicom Lanka and its Malaysian parent company, had been using the confidential and commercially sensitive business information belonging to the Plaintiff to unlawfully compete with the Plaintiff’s business.

The Plaintiff argued that by their conduct the six ex-employees had engaged in acts of unfair competition in violation of Section 160 (6) of the Intellectual Property Act. Furthermore, it was argued that the six ex-employees had violated the Non-Disclosure Agreements signed by each of them with Informatics and that the 2nd and 3rd Defendants had too violated their confidentiality obligations signed with Informatics.

On the first instance, the Learned Commercial High Court Judge, being satisfied on the facts pleaded on behalf of the plaintiff, granted the enjoining orders as prayed by the Plaintiff. Subsequently, the matter came up for Interim Injunction Inquiry before the Learned Commercial High Court Judge, who inquired about the matter in detail and also having assessed the submissions presented on behalf of the Plaintiff, issued 22 pages long judgment analyzing the fundamentals of law on confidential information and unfair competition, and decided that on a prima facie level the Defendants had used the confidential undisclosed information of the Plaintiff in an unfair and unethical manner contrary to honest business practices. As set out in the order, the Defendants had failed to adduce any valid argument against their unfair and unethical conduct.

The Plaintiff, Informatics International Limited was represented by Mr. Chandaka Jayasundere, President’s Counsel with Mr. Chinthaka Fernando, Attorney-at-Law on the instructions of Mr. Sanath Wijewardane, Attorney-at-Law.

The Defendants were represented by Mr. K. Kanag-Isvaran, President’s Counsel with Mr. Nigel Bartholomeusz, Attorney-at-Law and Mr. Lakshmanan Jeyakumar, Attorney-at-Law on the instructions of Sinnadurai Sundaralingam and Balendra Associates.