Case: Spill Bidco Ltd v Wishart [2025] EWHC 2513 (Comm) (01 October 2025) (HHJ Halliwell).
In this article we look at a recent High Court ruling in October 2025, that a seller (D) broke the non-compete rules in a sale and investment agreement by helping rival businesses with loans and advice.
In this case, the High Court looked at whether the seller (D) broke non-compete clauses in a sale and investment share agreement by being involved in a rival business, and whether those clauses also covered lending. Lending could count as being involved in a rival business, particularly when the lender also offered other help.
The claimant argued that D’s behaviour, including the provision of loans and other help and advice to rival businesses in Spain and the UK, constituted being “concerned” in competing businesses, which breached the covenants.
In its defence, D quoted from previous discussions (including William Corey v Harrison [1906] AC 274 and Batts Combe Quarry Limited v Ford [193] Ch 51) arguing that the act of just lending money does not count as being involved in a business.
The High Court found that the earlier cases, above, did not back D’s argument and ruled that giving money to a business could count as being involved in it under the non-compete rules.
To interpret the restriction and assess whether there was any breach, the High Court had to identify the contractual objectives of the parties and consider the covenantor’s behaviour overall. Just being a creditor was generally not enough to constitute a breach, but the court looked at whether, in addition to the loan, D also undertook other activities that supported the business.
Based on the evidence collected, the High Court found that D had breached the covenants because giving personal loans to help a rival business in Spain, along with helping to source products, meant that D was involved in that business … which was a breach of the non-compete covenants.
In addition, D also broke the covenants by giving a UK rival supplier information and advice on pricing. Taken together, this was more than just a minor involvement and constituted being involved in the competitor’s business.
The High Court also decided that the covenants were subject to restraint of trade rules and rejected the claimant’s argument that a test from a 2021 case (Peninsula Securities v Dunnes Stores (Bangor) Ltd [2021] AC 1014) should apply to business sale agreements. Unlike in the Peninsula case, the covenants in this case weren’t about land, and selling a business is still an area where restraint of trade rules usually apply.
However, the High Court upheld the restraint as reasonable. It noted that such covenants are common in share sales; the consideration was substantial; D’s goodwill was integral; there was no significant imbalance in bargaining power; the geographical scope matched the business’s operations; and the time limits, which were three years from completion under the SPA and two years after leaving the company was fair.
For more information and specific advice relating to non-compete rules in a sale and investment agreement, please get in touch with us at mwells@bondclarke.com.