In this decision of ATT Systems (S’pore) Pte Ltd and another v Centricore (S) Pte Ltd and others [2025] SGHC 13, the Singapore High Court held, among other things, that the general non-compete obligations were valid and enforceable against the former employees. The Court found that the defendants had breached confidentiality obligations, non-compete and loyalty obligations, induced breaches of contract by the former employees, and engaged in a conspiracy to cause damage by such means.

Summary

The individual defendants were former employees of ATT Systems and later had their employment contracts novated to ATT Infosoft. ATT Systems provided systems integration services, while ATT Infosoft specialized in intelligent electronic queue management systems, visitor management systems, and payment services solutions.

The employees departed from employment with the ATT companies and joined Centricore and IdGates. The ATT companies claimed, among other things, that the defendants breached equitable obligations of confidentiality regarding confidential information of the ATT companies, as well as non-compete and loyalty obligations; that certain defendants induced the breaches of contract by the employee defendants; that they engaged in a conspiracy to injure by unlawful means.

Breach of Confidence

The Court applied the framework on the application of the law of equitable obligations of confidentiality as set out by Dedar Singh Gill J in Shanghai Afute Food and Beverage Management Co Ltd v Tan Swee Meng and others [2024] 3 SLR 1098 (“Shanghai Afute Food”) based on the Court of Appeal decision in I-Admin: 

100 I summarise the law on breach of confidence. In I-Admin (Singapore) Pte Ltd v Hong Ying Ting and others [2020] 1 SLR 1130 (“I-Admin”) at [64], the Court of Appeal extended the law on breach of confidence. In summary, the following bifurcated approach is applied to establish an action for the breach of the equitable obligation of confidence:

(a) First, determine which interest the action for breach of confidence seeks to protect:

(i) wrongful gain interest, where the defendant has made unauthorised use or disclosure of confidential information and thereby gained a benefit; or

(ii) wrongful loss interest, where the plaintiff is seeking protection for the confidentiality of the information per se, which is loss suffered so long as a defendant’s conscience has been impacted in the breach of the obligation of confidentiality.

(b) If the wrongful gain interest is at stake, the traditional approach in Coco v AN Clark (Engineers) Ltd [1969] RPC 41 (“Coco”) applies: Lim Oon Kuin and others v Rajah & Tann Singapore LLP and another appeal [2022] 2 SLR 280 (“Lim Oon Kuin”) at [39] and [41]. The Coco test requires the plaintiff to establish the following:

(i) That the information in question has the necessary quality of confidence about it.

(ii) The information must have been imparted in circumstances importing an obligation of confidence.

(iii) There must be an unauthorised use of the information, and in appropriate cases, this use must be to the detriment of the party who originally communicated it.

(c) If the wrongful loss interest applies, the test is the modified approach promulgated under I-Admin.

(i) If the plaintiff proves [(b)(i)]–[(b)(ii)] (ie, the relevant information had the necessary quality of confidence and it was imparted in circumstances importing an obligation of confidence), it is presumed that the conscience of the defendant has been impinged (I-Admin at [61]). The presumption may be rebutted if the defendant adduces proof that his conscience was not affected in the circumstances in which the plaintiff’s wrongful loss interest had been harmed or undermined. The burden that shifts to the defendant at the third limb of the modified test is a legal burden, not an evidential one: Lim Oon Kuin at [40].

Notably, the Court rejected the defendants’ arguments that they owed no equitable obligation of confidentiality to ATT Systems because there was no contract with it, and the Confidential Information in question did not belong to ATT Systems.

The Court accepted that the absence of a contractual relationship would not oust the equitable obligation. Further, given the clear nature of the Confidential Information, the obligations of confidentiality were owed to both claimants by the defendants, as they would have been aware of the confidential nature of the documents, even if not employed by the relevant company directly.

The Court also considered that it was not necessary to show that there was a specific link between the information alleged to be confidential and each of the files accessed in the defendants’ (cloud) data storage systems. It was enough in respect of the equitable claim, for the plaintiffs to show that the documents were confidential, and that the defendants had access to it. The circumstances of the case led readily to the inference that they did access the Confidential Information, and that their consciences were affected, even aside from the presumption under I-Admin.

The Court also rejected the defendants’ argument that the documents lacked the quality of confidentiality because of the way the claimants treated them i.e. low or lack of control.

The Court considered that it was not necessary to particularise each and every confidential document in a claim for breach of confidence. It was not necessary for the claimants to prove specifically that each and every document was not in the public domain. The burden lay on them to prove the confidential nature of the documents in question, but this can be inferred in a civil claim, from their nature and the circumstances of their use. The plaintiffs in this case had given sufficient evidence that the documents were not publicly known, and that they were intended for internal use, such as the internal markings of the documents as “confidential”, “business in confidence” or “commercial in confidence”. The documents were intended only for the use by the plaintiffs and their clients.

The Court found that the defendants had accessed and used the Confidential Information. Among other things, they had used the Confidential Information by creating documents using it and relying on it for other actions or activities. There was evidence that they had client-specific materials, including specially designed kiosks for certain client(s). A defendant admitted that he had used information from the plaintiffs to prepare maintenance proposals. It was also found that subsequent employer(s) had access to or use of the Confidential Information.

Non-Compete Clause

The non-compete restriction was against the employees joining competitors within 6 months of departing from the claimants.

What is peculiar about this case?

(1) Arguments about restraint of trade doctrine and the unreasonableness and thus unenforceability of the clause are absent. It is not clear if the defendants simply did not raise these arguments. If so, why?

(2) The wording of the clause: on a plain reading, the clause prohibited employees joining specific identified competitors, but the company that the defendants joined are not in the list.

This decision appears to be a departure from the trend of the Singapore courts declining to uphold general non-compete clauses on the basis of unreasonableness / restraint of trade doctrine. A reminder that every case turns on its facts and arguments.