Trayport Limited v E-Star Trading GmbH: service out of jurisdiction set aside on most claims

The High Court has substantially set aside permission for Trayport Limited to serve proceedings out of the jurisdiction on German defendants, retaining permission only for three narrow claims after finding material non-disclosure and insufficient evidence to support the majority of allegations.

HH Judge Davis-White KC held that the claimant, which alleged misuse of its proprietary Joule software platform, had failed to meet the merits test for most of its 11 causes of action. The court identified serious failures in the duty of full and frank disclosure on the original without-notice application.

Trayport operates Joule, a dominant wholesale energy trading platform in European markets. The claims alleged that E-Star Trading GmbH, Exxeta AG, and two individual defendants wrongfully accessed Joule through customer accounts and used confidential information to create competing products. Causes of action included copyright infringement, database rights infringement, breach of confidence, trade secrets misuse, and unlawful means conspiracy.

The third defendant, Mr Schmid, was Trayport's former Chief Technology Officer who joined E-Star in 2022. The fourth defendant, Dr Kamper, is E-Star's managing director. Both corporate defendants are German entities.

The court comprehensively rejected what it termed the "Copying Case"—allegations that defendants had misused Trayport's intellectual property to create new E-Star products within approximately two years. The factual basis relied heavily on inference without sufficient supporting evidence. Factors cited to support copying—development speed, visual similarity, and recruitment of former employees—were individually and collectively inadequate to establish real prospects of success. Critically, E-Star products had existed for over 15 years, contradicting the claimant's timeline.

A narrower "Access Case" survived: that E-Star employees wrongfully accessed Joule through customer accounts from IP addresses primarily in Germany. However, statutory claims for copyright and database infringement failed on territoriality grounds. The court found 17 of 18 identified IP addresses were located in Germany, with speculation about copies being made on UK servers insufficient without proper pleading or evidence of acts occurring within the jurisdiction.

Claims against Mr Schmid for breaching post-employment restrictive covenants largely failed. The court determined that garden leave commenced on 30 November 2021, not 31 December 2021 as Trayport contended, meaning the six-month restricted period expired on 31 May 2022. Mr Schmid's employment with E-Star from 1 June 2022 therefore did not breach the non-compete covenant. However, a non-solicitation claim based on inferences from the timing and circumstances of four employees leaving Trayport for E-Star had real prospects of success.

The court identified serious disclosure failures. Trayport had not disclosed that Mr Schmid's Termination Agreement changed governing law from English to German law, instead incorrectly stating English law applied—material to jurisdictional gateways. The claimant also failed to disclose the long-standing co-operative relationship between Trayport and the corporate defendants, relevant to both merits and consent defences. Forum conveniens arguments raised by defendants in correspondence were inadequately addressed.

The court rejected Mr Harris's explanation that he had not properly reviewed the Termination Agreement, finding this difficult to credit given its centrality and inclusion as an annexure to the Particulars of Claim.

Germany was held to be the appropriate forum for most claims. The allegedly wrongful conduct occurred there, where all corporate defendant employees and documents were located. However, claims governed by exclusive English jurisdiction clauses—the NDA claim against Exxeta and the non-solicitation claim against Mr Schmid—were appropriately retained, along with breach of confidence claims against corporate defendants and the trade mark claim against E-Star.

Permission to serve out was set aside but re-granted only for these three categories. The claimant was ordered to pay all costs on an indemnity basis, reflecting the serious nature of disclosure failures.

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