Interactive Investor Trading Ltd v City Index Ltd

The Appellant “City Index” is a provider of services enabling trading in contracts for differences, hereinafter “CFDs” and spread betting, hereinafter “SB”. The Respondent “Interactive” is a provider of online services. Amongst other things it maintains and operates an interactive website for its clients. Interactive provides financial tools and information for its clients but does not itself operate an online trading platform. City Index does provide a platform for online trading including CFDs and SBs.

In May 2004 these parties entered into an agreement pursuant to which Interactive introduced clients to City Index and City Index provided to those it accepted as its own clients a CFD trading service branded as one of four proprietary products – Interactive Investor CFDs, Ample CFDs, Ample CFD Trading Service and Interactive Investor CFD Trading Service. Such trading is in the agreement described as “Branded Trading”. The free-standing agreement entered into between the client and City Index as provider of trading services described Interactive Investor CFDs as a trading name of City Index to whom the client had been introduced by Interactive.

Under the agreement of May 2004 Interactive was responsible for maintaining that part of its website which was dedicated to Branded Trading, which in turn contained a link to the interactive trading platform to be made available by City Index in connection with Branded Trading. City Index in turn accepted responsibility for maintaining the interactive trading platform. City Index agreed to pay to Interactive a share of the commission paid (by the client) on all trades executed by clients in respect of Branded Trading. There is a dispute as to the temporal extent of this obligation.

In February 2005 Interactive entered into an agreement on very similar terms with IFX Markets Limited, hereinafter “IFX”. This agreement related to the provision to clients of spread betting services. This agreement was later novated, City Index assuming the obligations of IFX.

On 31 March 2010 City Index gave notice to terminate both agreements. The notice periods were different. The notice period in respect of the CFD agreement expired on 30 June 2010 and that in respect of the SB agreement on 30 September 2010.

Both of the agreements make provision for what is called a “Wind Down Period” – hereinafter “WDP”. In both cases it is six months. There is a dispute between the parties as to the extent of their respective rights and obligations during and at the end of the WDP. In part this concerns the entitlement to commission on trades executed by the clients in respect of Branded Trading during the WDP. Of possibly greater significance is a dispute as to the extent to which City Index is at liberty to attempt to persuade clients to continue to use its trading services after the expiry of the WDP. Interactive says that City Index has no entitlement to solicit clients to remain and a positive obligation to assist in the “migration” of clients back to Interactive or to its nominee.

The CFD WDP was 1 July 2010 to 31 December 2010. The SB WDP was 1 October 2010 to 31 March 2011. Since the parties were desirous of knowing the extent of their rights and obligations during the WDP, by order of Hamblen J made on 8 September 2010 in the Commercial Court an expedited trial was directed to determine sixteen discrete points of construction. This formidable examination paper was set before His Honour Judge Mackie QC sitting in the Commercial Court on 29 and 30 September 2010. In order to assist the parties he gave an extempore judgment on 1 October 2010. Rather than addressing all sixteen issues individually he approached the matter under three broad headings, which between them embraced the entirety of the dispute.

The question as to the entitlement to commission is a straightforward question of construction which, even if not entirely simple to resolve, admits of a clear answer. To an extent, the same is true of the third question, although there I have for my part found myself hampered by the circumstance that there has been no investigation of the practical consequences attaching to a finding that names, addresses and contact details of clients are confidential to Interactive. However, as will appear hereafter, the status of this information is probably less important than is the question to what use it may be put in the hands of City Index. That is the second broad question which the judge addressed. As the judge himself pointed out, this question falls into an altogether different category. It is the sort of question best addressed after the event, where conduct alleged to have been contractually impermissible can be examined and a ruling made in the context of findings of fact as to what has been done. However the judge did his best to give such guidance as he could, as a result of which a detailed order was drawn up. This identified various things which City Index was prohibited from doing during the WDP and thereafter. The order did not positively require of City Index any action.

The judge did not consider that the agreements required City Index to give notice to terminate the individual contracts with clients. Subject to that however he resolved all of the questions broadly in favour of Interactive, holding that Interactive is entitled to commission on trades executed during the WDP, that the names, addresses and contact details of the clients constituted information confidential to Interactive and that City Index may not actively put itself forward to clients as the preferred trading service provider once the existing agreements come to an end on the expiry of the WDP. His conclusion was that City Index has “a duty to put its best foot forward to take steps to assist with the migration of clients”.

City Index appeals against these conclusions and Interactive cross-appeals on the one point on which it lost, contending that City Index is under an obligation to give notice of termination of contract to clients to take effect at the end of the WDP.

In one sense these questions, other than that as to the entitlement to commission, are now academic as the WDPs are over. However there is to be a further trial in the Commercial Court in November 2011. At that trial it will be alleged that actions taken by City Index before the litigation commenced and before certain undertakings were given amounted to a breach of contract. It is also said that the resolution of questions 2 and 3 is relevant to a consideration of the entitlement to commission. Unsatisfactory though it is to determine these questions before the factual enquiry, it is plain that having regard to the course which the litigation has so far taken we must simply do our best, as did the judge.

City Index seeks the following declarations:-

“(a)

The names, addresses and contact information of “Clients” are not the Respondent’s “Confidential Information” (as defined in the CFD Agreement and the SB Agreement).

(b)

The Appellant is entitled to market any and all of its services to Clients under the CFD Agreement and under the SB Agreement during and after the Wind Down Periods provided for by each agreement.

(c)

The Appellant is not obliged to pay commission to the Respondent in respect of CFD trading by the Clients during the Wind Down period provided for by the CFD Agreement or in respect of SB trading by the Clients during the Wind Down Period provided for by the SB Agreement.”

Interactive seeks to uphold the judgment below and additionally seeks a declaration that the contracts impose on City Index the obligation to provide notice of termination to clients in respect of its contractual relationships with them so as to ensure that (where such contracts would not otherwise expire at the end of the WDP) such contracts terminate on the expiry of the WDP.

As already noted, the agreements are in materially similar terms, with two differences. I propose to concentrate first on the CFD contract, as did the judge below. Indeed, it was not suggested before the judge that the proper construction of the SB contract differed from that of the CFD contract or that the approach thereto is affected by the difference in the terms. Before this court it was not the primary case of Mr Andrew George for Interactive that the difference in terms led to a difference in result. However he did have a fallback position to the effect that, if he was wrong in whole or in part in relation to the CFD contract, nonetheless he could succeed under the SB contract because of the difference in terms.

Both parties stressed that the agreement should be construed as a whole and both contended that it contained a coherent scheme, albeit they differed as to the shape of that scheme and the manner in which it was effected by the actual language used in the agreement. It is inevitable therefore that I must set out the terms at some length.

In the contract City Index is called “the Company” and Interactive is called “the Introducer”. The Introduction reads:-

“1.

The Company has agreed to offer CFD trading services using the Names.

2.

The Introducer wishes to appoint the Company to provide CFD trading services to its clients.”

There follows an extensive definition section from which I must extract the following:-

“ “Application Form” - The Company’s standard Ample CFDs branded application form from time to time for use by persons who wish to open an account with the Company for CFD Trading (incorporating consent from the Applicant to disclosure of information to the Introducer), branded using the Names in such manner as has been agreed between the parties on or before the date hereof and subject to any amendments in accordance with clauses 4.2 and 4.3.

. . .

“the Branded ITP” – the interactive trading platform from time to time made available by the Company in connection with Branded Trading.

“Branded Trading” – CFD Trading branded with the Names in accordance with this agreement and as from time to time carried on by the Company pursuant to this agreement.

. . .

“CFD” or “CFDs” – products from time to time in the range of products marketed by the Company under the name CFD including (a) all CFD products marketed by the Company under the name CFD at the date hereof and (b) such other products from time to time in the range of products marketed by the Company under the name CFD and which the Company and the Introducer agree shall be CFD products for the purposes of Branded Trading but excluding for the avoidance of doubt other types of contracts for differences such as, without limitation, spread betting and provided that if the Company ceases to offer trading services to its clients generally in respect of any particular CFD product, that CFD product shall cease to be a CFD product for the purposes of Branded Trading.

“CFD Trading” – trading facilities from time to time made generally available by the Company to its clients in respect of CFDs.

. . .

“a Client” – an Applicant who the Company has in its absolute discretion (during this agreement) accepted as a client of the Company in respect of Branded Trading and in respect of whom the Company has allocated an account number as referred to in clause 3.3.

. . .

“Confidential Information” – means confidential and/or trade secret information (whether in documentary form or on computer disk tape or any other electronic medium) of the Disclosing Party and which is disclosed by the Disclosing Party to the Receiving Party in connection with this agreement (whether before or after the date hereof) and such information shall include where the Company is the Disclosing Party, financial information, information relating to planned products, business development, pricing, charging and commission policies, marketing surveys and research information names addresses contact details and requirements of clients of the Company.

“Disclosing Party” – means the party to this agreement which imparts the Confidential Information to the other.

. . .

“the Initial Period” – the period set out in paragraph 2 of Schedule 1.

“the Introducer’s Site” – the electronic pages on the world wide web operated by on on behalf of the Introducer and which may be accessed at the URL: http://www/iii.co.uk or http://www.ample.com

. . .

“the Names” – the names set out in paragraph 3 of Schedule 1.

“the Notice Period” – the notice period set out in paragraph 4 of Schedule 1

“Receiving Party” – means the party to this agreement to which the Confidential Information is imparted by the other

“the Section” – the section of the Introducer’s Site dedicated to the Branded Trading (and containing a link to the Branded ITP) to be agreed by the parties as referred to in clause 5.1

. . .

“the Terms and Conditions” – the Company’s standard terms and conditions of business for CFD Trading from time to time branded using the Names in such manner as has been agreed between the parties, on or before the date hereof and subject to any amendments in accordance with clauses 4.2 and 4.3

. . .

“the Wind Down Period” – the period of 6 months after termination of this agreement. ”

Relevant clauses of the agreement include:-

“2.

Duration

2.1

This agreement shall commence with effect from the Effective Date and shall continue in force subject to termination by either party giving to the other notice in writing of not less than the Notice Period, provided that no such notice may be given on or before expiration of the Initial Period.

2.2

Notwithstanding clause 2.1. this agreement may be terminated in accordance with clauses 15.1 or 23.3.

Applicants and Clients

3.1

The Introducer may from time to time send to the Company a duly completed Application Form signed by any person being a person who wishes to open an account with the Company in respect of Branded Trading. Each such person is referred to in this agreement as an “Applicant”.

3.2

Promptly following receipt of an Application Form duly completed and signed by the relevant Applicant the Company shall (subject to clause 3.5) decide whether or not to accept the Applicant as a client in respect of Branded Trading and if so on what basis.

3.3

If the Company decides (in its absolute discretion) to accept the Applicant as a client (in respect of Branded Trading) the Company shall confirm to such Applicant in writing that the Applicant is accepted as a client of the Company in respect of Branded Trading (“a Client”), providing such Applicant with such account number and the other branded information as has been agreed with the Introducer to be provided to Applicants on opening their accounts.

3.4

All accounts opened by the Company with any Client in respect of Branded Trading shall be deposit accounts and the Company shall in its absolute discretion determine the amount of any deposit from time to time required.

3.5

The Company shall be responsible for compliance with the applicable laws and regulatory rules that the law requires to be complied with by the Company prior to the Company accepting any person as a Client.

. . .

3.8

All provisions of this agreement which refer to the Company providing information concerning Applicants and/or Clients (including trading activities) to the Introducer are conditional upon the Company being in possession of a valid and binding consent in the form of the Application Form (and/or Agency Agreement) duly executed by the Applicant and/or Client concerned, authorising the disclosure of such information to the Introducer and such Applicant and/or Client not having withdrawn its consent to the disclosure of the information concerned nor otherwise terminated such Agency Agreement. The foregoing shall prevail over any term or condition to the contrary contained herein and if the Company is not in possession of a duly executed consent and/or any Applicant and/or Client has withdrawn its consent to the disclosure of information by the Company or otherwise terminated the Agency Agreement then the Company shall not be obliged to disclose the information concerned.

3.9

If any Client withdraws its consent to the disclosure by the Company to the Introducer of information pertaining to that Client, then the Company shall insofar as it is entitled to do so without breaching any of the Terms and Conditions cease to provide Branded Trading to that Client, provided that the foregoing will not prevent any trades in order to close the Clients account.

4.

The Names, Client Data and Branding

4.1

All written communications, publications and documents used by either party relating to Branded Trading including without limitation the Terms and Conditions, the Agency Agreement, the Application Form, the information referred to in clause 3.3, all contract notes, account opening letters and statements (collectively “Documents”) shall:-

4.1.1

be branded using the Names in such manner as the Introducer and the Company may from time to time agree;

4.1.2

make clear that the Terms and Conditions form a contract between the Company and the Client.

. . .

4.5

The Introducer hereby grants to the Company a non-exclusive non-transferable, royalty free licence for the duration of this agreement and during the Wind Down Period to use the Introducer Trademarks for the sole purpose of the Company performing its obligations in relation to the Branded Trading pursuant to this agreement (including for the avoidance of doubt in the Names) and dealing with Clients for those purposes and provided that:-

4.5.1

each reference to the Introducer Trademarks shall be in the form agreed in writing in advance) by the Introducer;

4.5.2

any and all references to the Introducer Trademarks by the Company shall contain such acknowledgements of the Introducer’s ownership of any and all intellectual property rights in the Introducer Trademarks as the Introducer may from time to time reasonably require;

4.5.3

the Company shall not use any of the Introducer Trademarks other than in respect of the Branded Trading;

4.5.4

the Company shall not (save with the prior express consent of the Introducer) use any other trade mark other than the Introducer Trademarks on or in relation to the Branded Trading;

4.5.5

the Company shall not apply for or obtain registration of any of the Introducer Trademarks listed in paragraph 6 of Schedule 1 (or any trade or service mark which consists of or comprises the Introducer Trademarks listed in paragraph 6 of Schedule 1 or any confusingly similar word or words or logo) for any goods or services in any country;

4.5.6

the Company shall not dispute or challenge the validity of, or the Introducer’s rights to, any of the Introducer Trademarks listed in paragraph 6 of Schedule 1 during the term of this agreement.

4.6

The Company hereby grants to the Introducer a non-exclusive non-transferable royalty free licence for the duration of this agreement and during the Wind Down Period to use the City Trademarks for the sole purpose of the Introducer performing its obligations in relation to Branded Trading pursuant to this agreement and provided that:-

4.6.1

each reference to the City Trademarks shall be in the form agreed (in writing in advance) by the Company;

4.6.2

any and all references to the City Trademarks by the Introducer shall contain such acknowledgments of the Company’s ownership of any and all intellectual property rights in the City Trademarks as the Company may from time to time reasonably require;

4.6.3

the Introducer shall not use any of the City Trademarks other than in respect of the Branded Trading;

4.6.4

the Introducer shall not apply for or obtain registration of any of City Trademarks (or any trade or service mark which consists of or comprises the City Trademarks or any confusingly similar word or words or logo) for any goods or services in the country;

4.6.5

the Introducer shall not dispute or challenge the validity of, or the Company’s rights to, any of the City Trademarks during the term of this Agreement.

4.7

The licences granted under clauses 4.5 and 4.6 shall be irrevocable for the duration of this agreement and the Wind Down Period.

. . .

4.14

The Introducer hereby consents to the Company registering the Names with and maintaining registration of the Names with the Financial Services Authority for the purposes of this agreement and the conduct of Branded Trading. The Company shall be entitled to maintain such registration throughout the duration of this agreement and the Wind Down Period. The Introducer shall promptly at the Company’s request execute such deeds and documents and give the Company such reasonable assistance as it may from time to time reasonably require in connection with such registration. On or prior to expiration of the Wind Down Period the Company shall promptly withdraw the registration of the Names with the Financial Services Authority and shall promptly do all acts and things and execute such deeds and documents required in order to withdraw the registration and the Introducer shall give the Company all reasonable assistance in that regard.

. . .

5.

The Branded IP

5.1

The Company and the Introducer shall co-operate together and provide each other with all reasonable assistance to:-

5.1.1

agree the content of the Section (including the manner of representation of the Names);

5.1.2

agree the content of the Branded ITP

so that the same are fully operational and so that the Section connects to the Branded ITP by means of a hyper-linked file, on or before Monday 10^th May 2004.

. . .

5.5

The Company hereby grants to the Introducer (exclusively for the purpose hereinafter specified) a non-exclusive non-transferable royalty free licence for the duration of this agreement and during the Wind Down Period to such extent as may be reasonably necessary or convenient for all software forming part of the Section to connect to, access and use the software used by the Company in relation to the Branded ITP and for the purpose only of maintaining the said link between the Section and the Branded ITP.

6.

Basis of dealing

6.1

The contract between the Company and the Client shall be the Terms and Conditions and the Company shall be responsible for transactions with Clients pursuant to the Terms and Conditions.

. . .

7.

The responsibilities of the Company

. . .

7.2

The Company shall:-

7.2.1

answer telephone calls from Clients using Ample CFDs;

7.2.2

designate all Clients as private clients; and

7.2.3

treat all Clients as the Company’s clients for the purposes of Rule 4.1.5(2) of the Conduct of Business Source book of the Financial Services Authority.

. . .

9.

Commission and Payment Provisions

9.1

The Company shall pay to the Introducer a share of the commission paid on all trades executed by Clients in respect of Branded Trading during this agreement. The amount of the commission share is set out in the table in Schedule 3, and the payment terms are set out in Schedule 3.

. . .

10.

Confidential Information

The SB Agreement differs in only two material respects. First, there is no equivalent of Clause 13 in the CFD agreement. Second, in Clause 14.2, which is the equivalent of 15.2 set out above, included within the non-exclusive list of provisions which expressly or by implication is intended to survive termination is Clause 9. Division of commission is also dealt with differently in Schedule 3 to the SB Agreement.

It was the submission of Mr Anthony Trace QC for City Index that the contract makes provision for three separate periods. These are (1) the period during which the agreement is effective prior to notice to terminate having been given (2) the notice period and (3) the WDP. Termination is achieved by the giving of notice and takes effect either forthwith, in the unusual circumstances dealt with by Clauses 15.1.1 and 15.1.2, or on the expiry of the notice period. The definition of WDP is that it is the period of six months after termination of this agreement, emphasis supplied. The first and second periods are co-extensive with what is described in the agreement as either “the duration of the agreement” or “during the term of this agreement”. The WDP is dealt with separately. It begins on termination of the agreement and when the contract talks of what is to be done or not done “during this agreement” it is not referring to the régime which obtains after termination of the agreement, i.e. in the WDP. Mr Trace submits that the contract uses clear language which is apt to describe the different régimes which will obtain during the three periods. He submits that the draftsman of the contract has been entirely consistent in his use of language.

The inevitable effect of this clear and informed use of language is, submits Mr Trace, that there is no entitlement in Interactive to a share of the commission paid on trades executed by clients during the WDP because these are not trades executed “during this agreement” as required by Clause 9.1 if an entitlement is to arise.

Conduct during the WDP is, submits Mr Trace, to be spelled out of Clauses 10 and 13. Clauses 10.2 and 10.3 are plainly drafted in such a manner that they apply to a period different from that dealt with in Clause 10.1. The expression “during this agreement” in Clause 10.1 bears the same meaning as in Clause 9.1. Clauses 10.2 and 10.3 take effect on termination of the agreement and therefore apply during the WDP. However the names, addresses and contact details of clients introduced to City Index by Interactive are not confidential information. The definition of Confidential Information makes this clear by making specific reference in this context only to such details where they are imparted by City Index to Interactive rather than vice versa. This is logical since City Index must continue to deal with clients introduced by Interactive, who have become its own clients, during the WDP if only to deal in an orderly fashion with their open positions and outstanding liabilities.

Turning to Clause 13 this, submits Mr Trace, by implication spells out what may or may not be done by way of solicitation or marketing during the WDP. There is an obvious correspondence or equivalence between Clauses 13.1 and 13.2. Clause 13.1 by implication gives liberty to Interactive to undertake during the WDP such activity in competition with the interests of City Index as it has bound itself to refrain from for the duration of the agreement, i.e. the period before termination. Clause 13.2 must be dealing with the same period, and by implication authorises City Index during the WDP actively to market to clients their services other than Branded Trading in a manner from which it has undertaken to refrain “during this agreement”.

Finally, submits Mr Trace, the position after the WDP is dealt with by Clause 15.4. The enforceability of Clause 15.4.7 is for another day but Clause 15.4.6 is to be understood as referring to such clients as have elected to “migrate” back to Interactive or to a third party nominated by Interactive. Clause 15.4.5 is to be disregarded as meaningless. There is no “ownership” of the clients and it is for the clients to decide who they wish to be their service provider.

Mr George for his part seeks to put the agreement into what is, he says, its proper commercial context. He points out that, as would have been well understood by City Index when the agreements were made, the core value of the business of Interactive is its brand and its large client or repeat user base. Those clients are attracted to Interactive by the content and tools available on its website. Interactive invests heavily to attract and to retain its client base. Mr George points out also that the CFD agreement is, as its cover sheet proclaims, a “white label” agreement, pursuant to which the products made available to clients by City Index continue to bear the branded name of Interactive, thereby enabling Interactive to maintain continuity with its clients, whilst broadening the scope of its financial services. Whilst City Index was being given access to that client base, the access was for the specific and limited purpose of making available branded products to which the agreement relates.

Against that background, submits Mr George, Clause 15 of the agreement demonstrates clearly that the shape of the commercial bargain is that those clients who as a result of introduction by Interactive become clients of City Index for the purpose of the Branded Trading shall revert to Interactive insofar as they wish to do so after the expiry of the WDP. The default provider is therefore Interactive. Consistently therewith, submits Mr George, Clause 15.4.7 makes clear that, subject to the argument on enforceability, City Index may not after the expiry of the WDP solicit clients to continue to be in receipt of services from City Index, which by definition must by this stage be services other than Branded Trading, whilst Clause 13.2 imposes a like restriction upon City Index for the duration of the agreement not to offer to clients services other than the Branded Trading undertaken through the arrangements put in place by the agreement. It would therefore be surprising, submits Mr George, if Clause 13.2 had the effect of giving to City Index a window of opportunity during which it might do that from which it was otherwise prohibited, viz, solicit the clients to remain with it after the arrangements between City Index and Interactive had come to an end. The words “during this agreement” in that sub-clause must therefore be read as including the WDP. If that were wrong, he submitted, then Clause 13.2 was to be read as subject to an implied term that City Index would not so conduct itself as to hinder or prevent the performance of its obligations under Clauses 15.4.5 and 15.4.6 which involved a positive duty (a) to terminate all contracts between itself and clients with effect from the end of the WDP and (b) to make all reasonable efforts to assist the migration of the clients back to Interactive or its nominee.

Mr George further submitted that, looked at in this context it was natural that the names, addresses and contact details of clients should be regarded as confidential to Interactive. The names had been imparted to City Index by Interactive as the Disclosing Party – the judge so found at paragraphs 48 and 49 of his judgment. However Mr George acknowledged that it could not have been intended that City Index should cease to use the clients’ names, addresses and contact details during the WDP, which meant that the words “on the termination of this agreement” in Clauses 10.2 and 10.3 had to be construed in context as meaning after any relationship between Interactive and City Index has ceased, i.e. after the expiry of the WDP.

Finally, so far as concerns the payment of commission, Mr George submitted that it was natural to assume that trades executed during the WDP would attract the sharing of commission with Interactive since the contribution of Interactive to those trades was precisely the same as to the trades executed during the earlier period. The clients were still clients introduced by Interactive and Interactive continued under Clause 15.3 to be responsible for the maintenance during the WDP of the Section and the link to the Branded interactive trading platform. The natural reading of Clause 9.1 is therefore that the entitlement to commission subsists throughout the WDP. Indeed, Mr George submits that to construe the clause as not entitling Interactive to commission in respect of trades executed during this period leads to an absurd result.

It is immediately apparent that whilst there is substance in the suggestion that the intention underlying the agreement is to give to City Index only limited and controlled access to the Interactive client base for the purpose of performance of the agreement, with no intention to enable City Index to access that client base for a broader purpose, the various conclusions to which Mr George urges us involves attributing to the draftsman of the agreement an inconsistent use of language. In this regard Mr George faces the following difficulties:-

These are substantial obstacles to acceptance that the agreement should be construed in the manner for which Mr George contends. With the possible exception of Clause 15.4.5, where the draftsman may have used an inappropriate shorthand expression the meaning of which was clear to him but not immediately apparent, the agreement seems to have been the subject of careful drafting and it should ordinarily be presumed that language is used consistently within the four corners of an agreement.

Furthermore, turning to the entitlement to commission, I do not think it implausible that the parties should have agreed that there should be no commission sharing in respect of trades executed during the WDP. Under Clause 13.1, giving to it the meaning which Interactive submits should be given, which it is common ground is the correct meaning and which I regard as the natural meaning, Interactive is at liberty during this period to introduce clients to competitors of City Index with whom it has concluded alternative arrangements to replace those with City Index. Interactive is likely to wish to do so, or at any rate to begin the process during the WDP. There may be little Branded Trading during this period and Interactive has it in its power to seek to limit the volume thereof. Commission sharing in respect of trading during the WDP would require City Index to continue to send monthly reports specifying reasonable particulars of trades executed by clients within the previous month and it is not inconceivable that the parties did not wish to continue that arrangement. Accordingly, whilst one might ordinarily expect all Branded Trading executed whilst the relationship between Interactive and City Index subsists to attract commission sharing, it is in my judgment by no means an absurd conclusion that the parties agreed that this would not be so during the WDP. Given the apparently consistent use of the expression “during this agreement” or its equivalent, “the duration of this agreement”, I see no reason to construe those words where used in Clause 9.1 as extending, exceptionally, to the WDP.

I realize that it is also Interactive’s case that the expression bears the same exceptional meaning in Clause 13.2. However I do not accept this argument either. Clauses 13.1 and 13.2 are plainly intended to be co-extensive mutual and related restrictions placed upon, in Clause 13.1, Interactive and, in Clause 13.2, City Index. It would be very surprising if that mutuality were to be compromised by providing for periods of restraint which are not co-extensive. It is said that it would be odd if City Index were to be permitted during the WDP to solicit for business which it cannot do either during the period prior to notice of termination or after expiry of the WDP. Whilst I have already acknowledged the force of this point, again I cannot regard as absurd a choice to achieve a compromise between the parties’ respective interests. The court is in no position to know the value to Interactive of securing the agreements with City Index of which they had the benefit for six and five years respectively. Although one would expect Interactive jealously to guard its client base, this does not mean that it might not be prepared to contemplate as part of the price of the deal a limited period during which City Index might have the opportunity to market its services to clients, which in any event need not mean that a client that remained with City Index for certain purposes was necessarily lost to Interactive for all other purposes. Furthermore, it would have been the easiest thing in the world to carry through an intention that City Index should simply have no opportunity to solicit clients in respect of services other than Branded Trading by so providing in clear terms in a simple clause imposing a clear prohibition on such activity unlimited in time. That however has not been done. Rather the matter has been dealt with by two clauses, 13.2 and 15.4.7, which on their natural meaning leave the WDP as a period in respect of which each party is released from its undertakings not to act in a competitive manner. On balance I do not consider that there is any principled basis upon which the court should attribute to the parties an intention that the words “during this agreement” when used in Clause 13.2 should bear a meaning other than that which consistently they bear on their use in many other places in the contract.

This confusion is borne out by the view I take of the confidentiality provisions. Again the starting point is an apparently careful definition which appears to put the matter beyond argument. Unlike the judge, I regard it as telling that the draftsman has illustrated the definition by specifying that where City Index is the Disclosing Party, names, addresses and contact details and requirements of clients of City Index shall be Confidential Information. That as it seems to me carries a clear inference that the imparting by Interactive to City Index of the names, addresses and contact details of its clients, which is after all one of the whole purposes of the agreement, is not to be regarded as the disclosure of confidential information. The matter is to my mind put beyond doubt by the treatment of confidential information in Clause 10.3. Whether Clause 10.3 bites on termination of the notice period, as City Index contends, or at the expiry of the WDP, as Interactive contends, it requires the return of all record of the confidential information. Clause 10.2 requires the cessation of all use of it and Clause 10.4.5 is a saving only as to the use of confidential information, not an exception to the requirement to return all record of confidential information. However the parties simply cannot have contemplated that City Index would either at the end of the notice period or on expiry of the WDP simply divest itself of all record of persons who had been its clients over the past five or six years. Quite apart from the need to retain sufficient records to comply with regulatory requirements and/or to respond to regulatory enquiry as to trades executed, no commercial enterprise, particularly in the financial sector, could conceivably act in this way, at any rate until after the expiry of any applicable prescription or limitation period during which it might remain at risk in relation to transactions undertaken. It follows from this consideration alone in my judgment that names, addresses and contact details of clients imparted by Interactive to City Index cannot properly be regarded as information confidential to Interactive for the purposes of this agreement.

In these circumstances it is strictly unnecessary to determine Mr Trace’s challenge to the judge’s finding that the relevant information was imparted by Interactive rather than by the clients themselves. I should however just say in relation to that debate that in my view it would be surprising if its resolution depended upon the question by whom the relevant button was pressed. I can accept that the judge’s conclusion that the client’s application form was electronically transferred by Interactive to City Index is too baldly stated in that it fails to acknowledge that without the final act by the client it would not have been transferred at all. The substance of the matter is however that, first, the relevant details are in fact entered into the system by Interactive from their own records, albeit on the prompt of the client and, second, the information ultimately makes it way from Interactive’s computer system to the computer system of City Index through specially created links between the two systems as provided for by the CFD and SB agreements, again at the prompt of the client. I have no doubt that the proper analysis of this electronic process is that the relevant information is disclosed or imparted by Interactive to City Index. Indeed, at trial the only relevant witness for City Index with knowledge of the processes acknowledged that she was in no position to gainsay this analysis.

In view of the conclusion which I have reached as to the meaning of Clause 13.2 there is no scope for the implication of a term which, however formulated, is to all intents and purposes to the effect that the prohibition in Clause 13.2 will apply during the WDP. It is trite law that a term will not be implied which contradicts the express terms of the contract.

I can also deal shortly with the cross-appeal. I agree with the judge that Clause 15.4.5 cannot be regarded as imposing upon City Index an obligation to give notice to terminate contracts with clients with effect from the expiry of the WDP. Quite apart from anything else, the termination of contracts which provide and provide only for Branded Trading would achieve no purpose in terms of “ownership” of the client or of the client relationship. After the expiry of the WDP Branded Trading ceases to be available since Interactive will simply sever the link to the Branded interactive trading platform. The contracts between City Index and the clients will therefore be without more devoid of content so far as concerns the possibility of further trading. There is also the consideration that on the face of it variation or extension of the contracts after the expiry of the WDP so as to embrace the provision of services other than Branded Trading is prohibited by Clause 15.4.7, as is of course the entry into a new contract, unless in either case directly requested by the Client unsolicited by City Index. Obviously I do not regard this consideration as determinative as the enforceability of Clause 15.4.7 remains to be determined. It is however a pointer to the draftsman’s intention. Furthermore, we have no evidence on the basis of which we can assess the possible impact upon clients of the termination of these contracts. Mr George asserted that the thirty day notice period which City Index would be contractually obliged to give is sufficient to ensure that no prejudice could accrue to clients from the closing out of open positions. It is the case of City Index by contrast that termination of the contracts would have a dramatic effect, causing real damage both to the clients and, in consequence, to the reputation of City Index, putting them in breach of their regulatory obligation to treat customers fairly. In the absence of evidence as to the likely consequences which would enable us to resolve this difference it would be imprudent in the extreme for this court to impute to the parties an unexpressed intention that contracts between City Index and their clients should be the subject of compulsory termination at the expiry of the WDP.

To what extent if at all does the difference in terms lead to different conclusions so far as concerns the SB agreement?

I do not consider that the inclusion of Clause 9 in the list in Clause 14.2 of the SB agreement of clauses intended to survive termination assists Mr George. It is plain that accrued rights to payment to a share of commission must survive termination. The express saving does not assist on the question on what trades the share is due. The omission of Clause 13 removes one but only one of the textual obstacles to giving to the words in Clause 9.1 a meaning different from that which consistently they bear when used elsewhere.

It is not suggested that the different wording in the SB agreement can affect the conclusion on confidential information.

During the WDP City Index is subject to the constraints imposed by Clauses 10.2 and 10.3, which for reasons already explained do not relate to the use of client names, addresses and contact details. However in the absence in the SB agreement of an equivalent of Clause 13.2 City Index is at no time during the currency of the SB agreement, whether during the period before notice of termination is effective or during the WDP, subject to a prohibition on soliciting the clients in respect of trading services other than Branded Trading. In the SB agreement this prohibition comes into effect only after expiry of the WDP. That being so, the case for implying a term to the effect that City Index will not during the WDP so conduct itself as to hinder or prevent the performance of its obligations arising after expiry of the WDP is wholly different from that which is urged under the CFD agreement. However it is in my view still misconceived. Whilst it is not implausible that City Index should be prevented from doing during the WDP what it has been at liberty to do theretofore, viz soliciting clients, it is by no means necessary to imply such a term in order to make the agreement work. But in any event I cannot understand how solicitation during the WDP can be said to hinder or prevent performance of obligations arising only after the expiry of the WDP. The obligation of City Index after expiry of the WDP to use all reasonable efforts to assist migration and not further to solicit is unimpaired by prior solicitation.

For the avoidance of doubt and more generally in the context of both agreements I should perhaps clarify that I agree with the judge’s conclusion at paragraph 105 of his judgment to the effect that “If a client actively wishes to remain with City Index, then it is not going to be a failure by City Index to assist with migration.” Clause 15.4.6 is a duty of assistance and that to my mind connotes that there will be a prior request for assistance. Having rejected the notion that City Index is under a duty positively to terminate contacts with clients, a duty not positively to put itself forward as the preferred successor, combined with a duty to use reasonable efforts to assist migration if asked, seems to me a coherent and workable régime. For my part I see no need to put a gloss on the words used in Clause 15.4.6 of the CFD agreement and the judge’s formulation that City Index “has a duty to put its best foot forward to take steps to assist with the migration of clients” is I think unnecessary and possibly productive of uncertainty as to the ambit of the obligation. I would also add that at paragraph 103 of his judgment the judge has I think inadvertently referred to Clause 13.2 as being applicable co-extensively with Clauses 15.4.6 and 15.4.7.

Accordingly I would allow the appeal and dismiss the cross-appeal and, if the other members of the court are of a like view, invite the parties to draw up an order or declarations reflecting our conclusions. Although not noticed or discussed at the hearing it cannot be appropriate to make the second declaration sought by City Index in the terms set out at paragraph 12 above since the enforceability of Clause 15.4.7 remains to be determined.

I agree.

I also agree.