TYSERS INSURANCE BROKERS v ARDONAGH SPECIALTY (MENA) [2025] DIFC CFI 082 — Interim injunction enforcing restrictive covenants (06 November 2025)

The DIFC Court of First Instance has affirmed the enforceability of post-termination restrictive covenants in the insurance sector, granting an interim injunction to restrain a former employee and his new employer from breaching a Partial Waiver Agreement.

What was the specific nature of the dispute between Tysers Insurance Brokers and Jayees Ibrahim Velikkalagath regarding the Partial Waiver Agreement?

The dispute arose from the departure of the Second Defendant, Jayees Ibrahim Velikkalagath, from his role as a Director at Tysers Insurance Brokers. Following his resignation in February 2025, the parties entered into a Partial Waiver Agreement to modify the original post-termination restrictions, ostensibly to allow the Second Defendant to secure a new employment visa while maintaining his wife’s medical care, on the condition that he would not commence work during the six-month Restrictive Period.

The conflict escalated when the Claimant discovered the Second Defendant had announced his new employment with the First Defendant, Ardonagh Specialty (Mena), via LinkedIn in August 2025. Despite the Claimant’s attempts to seek clarification, the Defendants failed to provide adequate assurances, leading to the filing of an urgent application. As noted in the procedural history:

On 18 September 2025 the Claimant filed its Part 8 Claim Form and Urgent Application seeking an interim injunction pursuant to RDC Part 25 to order the Defendants to comply with the restrictive covenants as per the Partial Waiver Agreement, with costs. 14.

Which judge presided over the application for an interim injunction in CFI 082/2025?

The application was heard by H.E. Deputy Chief Justice Ali Al Madhani in the DIFC Court of First Instance. The hearing took place on 25 September 2025, with the resulting order granting the injunction issued on 7 October 2025, followed by the formal written reasons on 6 November 2025.

What were the primary legal arguments advanced by the Defendants against the enforcement of the restrictive covenants?

The Defendants, represented by DLA Piper, argued that the restrictive covenants were overly broad and unenforceable. They contended that the restrictions exceeded what was reasonably necessary to protect the Claimant’s legitimate business interests. Furthermore, the Defendants submitted that any potential breach could be adequately addressed through monetary damages, rendering an injunction unnecessary and disproportionate.

The Court summarized the Defendants' position as follows:

This is an all-encompassing defence built on the submission that the restrictive covenants are wider than reasonably necessary to protect the Claimant’s legitimate business interest and could be adequately remedied by damages in the event that the Claimant finds actual loss to be caused by the Defendants. Therefore, on the balance of convenience, the injunction should not be granted. 5.

What was the precise doctrinal issue the Court had to resolve regarding the enforceability of restrictive covenants under DIFC Law?

The Court was tasked with determining whether, in the absence of a specific statutory provision explicitly governing restrictive covenants, such clauses are enforceable under the general principles of DIFC Contract Law. The doctrinal challenge involved balancing the principle of freedom of contract—enshrined in Article 8(1) of the DIFC Contract Law—against the common law doctrine of restraint of trade, which requires that such covenants be reasonable and necessary to protect legitimate business interests.

How did H.E. Deputy Chief Justice Ali Al Madhani apply the American Cyanamid test to the facts of this case?

The Court adopted the established three-stage test to determine whether the interim injunction was appropriate. First, the Court assessed whether there was a "serious issue to be tried," finding that the Claimant had met the threshold by demonstrating a more than frivolous chance that the Defendants had breached their obligations. Second, the Court evaluated whether damages would be an adequate remedy, concluding that they would not. Finally, the Court weighed the balance of convenience.

The Court’s reasoning was anchored in the following framework:

The Claimant relies on the leading English case of American Cyanamid to show that the current Application meets the threshold to grant an interim injunction, as there is a serious issue to be tried that cannot adequately be remedied by damages, and the balance of convenience lies in favour of granting the injunction. [Q2]

Which specific DIFC statutes and rules were applied to justify the Court's jurisdiction and the granting of the injunction?

The Court relied on Article 8(1) of the DIFC Contract Law, which supports the doctrine of freedom of contract, and Article 10, which dictates that validly entered contracts are binding. Additionally, the Court cited Article 89(3), which clarifies that the termination of a contract does not affect terms intended to operate post-termination. Procedurally, the Court exercised its power under RDC 25.1 to grant the interim injunction, noting that the DIFC Courts possess the inherent jurisdiction to issue such orders to protect legitimate interests.

How did the Court utilize English precedents like American Cyanamid and Herbert Morris in its decision-making process?

The Court utilized American Cyanamid Co v Ethicon Ltd [1975] AC 396 to establish the procedural test for the injunction. Regarding the substantive validity of the covenants, the Court referenced Herbert Morris Ltd v Saxelby [1916] 1 AC 688 and Stenhouse Australia Ltd v Phillips [1974] AC 391 to evaluate the reasonableness of the restraint. These cases were used to confirm that while restrictive covenants are recognized, they must be narrowly tailored to protect the employer's legitimate business interests rather than merely preventing competition.

What was the final disposition of the application and the specific orders made against the Defendants?

The Court granted the Claimant’s application for an interim injunction. The order prohibited the First Defendant from engaging or permitting the Second Defendant to perform work on behalf of the Ardonagh Group during the Restrictive Period. Furthermore, the Second Defendant was ordered to cease soliciting or enticing the Claimant’s clients and was mandated to return all company property and delete company-related information within 48 working hours.

The Court’s satisfaction with the necessity of this relief was clear:

Hence, I am satisfied that there is a serious issue to be tried, and the balance of convenience favours granting the injunction against the First Defendant. 80.

What are the wider implications of this ruling for employment law practitioners in the DIFC?

This decision reinforces the high level of judicial support for the sanctity of contract within the DIFC. Practitioners should note that the Court is willing to enforce post-termination restrictions even in the absence of specific employment-statute codification, provided the terms are reasonable. The case serves as a warning that "evasive" conduct by employees and their new employers regarding the commencement of work will likely be met with swift injunctive relief. Litigants must anticipate that the Court will prioritize the protection of legitimate business interests over the employee's desire to bypass agreed-upon restrictions.

Where can I read the full judgment in Tysers Insurance Brokers Limited v (1) Ardonagh Specialty (Mena) Limited T/A Price Forbes DIFC / Price Forbes & Partners (2) Jayees Ibrahim Velikkalagath [2025] DIFC CFI 082?

The full judgment can be accessed via the DIFC Courts website: https://www.difccourts.ae/rules-decisions/judgments-orders/court-first-instance/cfi-0822025-tysers-insurance-brokers-limited-v-1-ardonagh-specialty-mena-limited-t-price-forbes-difc-price-forbes-partners-2-jay-1

Cases referred to in this judgment:

Legislation referenced:

• DIFC Contract Law Article 8(1)
• DIFC Contract Law Article 10
• DIFC Contract Law Article 89(3)
• DIFC Law No. 2 of 2025 Article 24(D)
• RDC 25.1
• RDC 1.6