Illiquidx Ltd v Altana Wealth Limited & Ors

Factual and Procedural Background

This judgment follows a trial concerning claims of breach of confidence, infringement of trade secrets, breach of contract, and copyright infringement. The issues addressed relate solely to liability, with quantum reserved for later proceedings.

The Plaintiff ("IX") is an advisory and broking boutique specializing in illiquid investments, with particular expertise in Venezuelan debt by 2019. The Defendants include an investment fund management company ("Altana"), its founder and Chief Investment Officer ("Mr Robinson"), and a consulting company ("Brevent") with its sole director ("Mr Kastner").

The parties entered into a joint venture ("JV") in mid-2019 to establish a fund ("AICF") to invest in Venezuelan distressed debt, governed by a joint venture letter and a non-disclosure agreement ("NDA"). The JV ended by November 2019 without launching a fund. Thereafter, the Defendants established their own fund ("ACOF") focused on similar investments.

The Plaintiff alleges that the Defendants misused its confidential information and trade secrets in setting up the ACOF and that the Defendants infringed its copyright through marketing materials. The trial occurred in October 2024, with extensive witness evidence and documentation considered.

Legal Issues Presented

1. Whether the Defendants breached the NDA and misused the Plaintiff’s confidential information and trade secrets in setting up and operating the ACOF.
2. Whether the Plaintiff’s Business Opportunity and associated documents constitute confidential information protected by the NDA and trade secrets under the Trade Secrets (Enforcement, etc.) Regulations 2018.
3. Whether the Defendants infringed the Plaintiff’s copyright in parts of the marketing presentations.
4. Whether the individual Defendants are personally liable as accessories for breaches committed by the companies.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff presented a confidential package termed the "Business Opportunity," comprising an investment strategy to monetize undervalued Venezuelan distressed debt despite sanctions.
• The Plaintiff contended that this Business Opportunity and related documents ("the Detail") were confidential information and trade secrets protected under the NDA and Regulations.
• The Plaintiff alleged that the Defendants misused this confidential information after the JV ended by establishing the ACOF using the same strategy and marketing materials.
• The Plaintiff claimed copyright infringement based on reproduction of parts of two slides from a Plaintiff presentation in the Defendants' marketing materials.
• The Plaintiff sought to hold the individual Defendants personally liable as accessories for breaches committed by their companies.

Defendants' Arguments

• The Defendants argued that the Plaintiff failed to identify the Business Opportunity with sufficient precision to warrant protection.
• They maintained that the information at issue was already known to them or in the public domain, citing prior dissemination of marketing materials by the Plaintiff and the JV parties.
• The Defendants contended that any reproduction of slides was not substantial and that an implied licence existed based on email exchanges.
• They denied the individual Defendants had the requisite knowledge to be personally liable as accessories.
• They asserted that the Plaintiff's circulated marketing materials were in the public domain, negating confidentiality.
• They disputed the Plaintiff’s characterization of the investment thesis behind the ACOF, asserting differences from the Plaintiff’s proposal.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
CF Partners v Barclays Bank [2014] EWHC 3049 (Ch)	Comprehensive review of legal principles governing duty of confidence.	The court applied the principles to determine the scope and nature of the confidentiality obligations under the NDA and equitable duties.
Campbell v MGN Ltd [2004] UKHL 22	Duty of confidence arises when information is reasonably regarded as confidential.	Referenced to affirm the existence of a duty of confidence irrespective of contract.
Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203	Information must have the necessary quality of confidence to warrant protection.	Used to support that a special collation or presentation of public information can be confidential.
Robb v Green [1895] 2 QB 315	Contractual and equitable duties of confidence may coexist.	Confirmed that contractual confidentiality obligations can govern parties’ rights and obligations.
Attorney-General v Observer Ltd [1990] 1 AC 109	Confidant must have notice or agreement that information is confidential; subconscious misuse suffices.	Applied to assess knowledge and misuse of confidential information by the Defendants.
Arklow Investments Ltd v Maclean [2000] 1 WLR 594	Actual misuse of confidential information must be established or inferred.	Guided the court in determining whether the Defendants’ actions constituted misuse.
Lifestyle Equities CV v Ahmed [2024] UKSC 17	Directors not personally liable for company torts unless acting wilfully or knowingly.	Applied to assess personal liability of individual Defendants as accessories.
Wood v Capita Insurance Services [2017] UKSC 24	Principles of contractual interpretation focusing on objective meaning and commercial common sense.	Guided interpretation of the NDA’s terms.
Minera Las Bambas SA v Glencore Queensland Limited [2019] EWCA Civ 972	Summary of principles for contract interpretation.	Supported the approach to construing the NDA.
Coco v Clark	Contractual confidentiality provisions govern parties’ rights in ordinary cases.	Used to confirm that the NDA’s terms define the scope of confidentiality obligations.

Court's Reasoning and Analysis

The court began by examining the nature of the Plaintiff's claims, focusing primarily on contractual breach of confidence under the NDA rather than equitable duties. The NDA’s broad definition of Confidential Information and carve-out for public domain information were pivotal.

The court carefully analyzed the "Business Opportunity" and the "Detail" documents, concluding that while much of the information was derived from public sources, the particular collation, presentation, and investment strategy (notably the concept of a sanctions compliant fund for Venezuelan distressed debt) were confidential and not generally known in the market.

Evidence showed the Defendants had limited prior knowledge of Venezuelan debt opportunities and that the Plaintiff was the source of the confidential investment strategy. The Defendants’ claim that the information was public domain or previously known was rejected due to the Defendants’ own unfamiliarity and the nature of the information.

Misuse was established by the Defendants continuing to develop and market the ACOF fund after the JV ended, using the Plaintiff’s confidential information and strategy. The court rejected the Defendants’ alternative investment thesis and found that the ACOF essentially implemented the same strategy as the proposed AICF.

Regarding trade secrets, the court found the Business Opportunity met the statutory definition and that reasonable steps had been taken to maintain secrecy, including selective dissemination under NDA.

On copyright, the court held that only two slides partially reproduced parts of the Plaintiff’s 17 July Slides and that these did not amount to a reproduction of a substantial part of the work as a whole. Thus, the copyright infringement claim failed. The court also considered implied licence arguments and found no licence was granted.

On joint liability, the court found that while the companies were liable for breach of the NDA, the individual Defendants did not have the requisite knowledge of wrongdoing to be personally liable as accessories under the law concerning directors’ liability.

Holding and Implications

The court held that the Defendants' companies ("Altana" and "Brevent") breached the NDA and misused the Plaintiff’s confidential information and trade secrets in establishing and operating the ACOF fund.

The Plaintiff's claim for copyright infringement was dismissed for failure to prove reproduction of a substantial part of the copyrighted work.

The individual Defendants ("Mr Robinson" and "Mr Kastner") were not found personally liable as accessories because they lacked the necessary knowledge that the information used was confidential and protected.

The direct consequence is that the Defendants’ companies are liable for breach of contract and trade secrets infringement, but no personal liability attaches to the individual Defendants. The decision does not establish new precedent beyond its application of existing principles to the facts.