In a decision handed down on 13 February 2026, the Hong Kong Court of First Instance refused to grant an interlocutory injunction sought by a virtual asset management company, which attempted to enforce a 12 month non compete covenant against a former portfolio manager who joined a rival in the cryptocurrency ETF market.

The decision in Pando Finance Limited v Ng Ean Kiam (HCA 1567/2025) offers a significant reminder to employers of the strict standards Hong Kong courts continue to apply when scrutinising post-termination restrictive covenants, and carries important practical implications for the drafting and enforcement of such provisions.

Background and Procedural History

Pando Finance Limited ("Pando"), a virtual asset management firm, employed Mr Ng Ean Kiam ("Mr Ng"), an experienced Singaporean fund manager, as its Portfolio Manager under a 12-month non-compete covenant dated 21 May 2024.

Mr Ng resigned on 9 January 2025 and, after serving his three-month notice period, joined MicroBit Capital Management Limited ("MicroBit"), a competitor in the cryptocurrency ETF space, in mid-April 2025. Pando commenced proceedings in August 2025 seeking an interlocutory injunction to restrain Mr Ng from working with MicroBit for the remainder of the restriction period (i.e. until 8 April 2026).

Because the 12-month restriction period would expire in April 2026 and no trial could realistically take place before that date, the Court recognised that granting the injunction would effectively amount to granting final relief. Consequently, Pando was required to demonstrate not merely a serious issue to be tried, but that it had good prospects, or better prospects of success than Mr Ng, following the test in WPP Marketing Communications (Hong Kong) Ltd v Christopher O'Donnell.

Key findings on enforceability

The Court found that Pando had failed to demonstrate good or better prospects of success in establishing the enforceability of the non-compete clause, identifying three critical deficiencies.

First, the clause contained no geographical limitation and purported to have worldwide effect. The Court held that such a worldwide restraint was far too wide, particularly given that Pando's interest in protecting SFC-related confidential information had limited relevance to ETF products launched in other jurisdictions, even if those products may ultimately be accessible to Hong Kong investors. Further, the Court found that the lack of any geographical restriction hard to justify given that Mr Ng was a Singaporean national who had previously worked in Singapore and had pursued employment opportunities there.

Second, Pando failed to justify the 12-month duration, adducing no evidence of confidential information with a shelf life warranting such a lengthy restriction.

Third, the scope was overly broad, extending to "any other business or entity" in competition with the group, which would have prevented Mr Ng from joining even traditional asset management firms with no connection to virtual assets.

No good prospects of proving actual breach

The Court further held that Pando had not demonstrated good prospects of establishing actual breach, or of proving misuse of confidential information, and also took into account Mr Ng’s undertaking to comply with the confidentiality provision under his employment agreement. Pando characterised its confidential information as "legal paperworks, SFC filings, and all communications" but failed to particularise the materials or show that they were not publicly available. The Court reaffirmed the distinction between protectable trade secrets and an employee's own skill and knowledge, emphasising that Mr Ng was entitled to deploy the professional expertise acquired during his career. Evidence also indicated that MicroBit's draft prospectuses had been prepared before Mr Ng joined, further undermining allegations of misuse.

Balance of convenience and delay

On the balance of convenience, the Court found in favour of Mr Ng. Pando had not demonstrated irreparable damage, while Mr Ng faced significant prejudice including loss of employment, reputational stigma, and impeded career development. Unlike in Beacon College Ltd v Yiu Man Hau, Pando had not offered alternative employment during the restriction period. There was also material delay in seeking relief, with an unexplained gap of four to six weeks.

Practical implications for employers

This decision reinforces several practical lessons for employers in Hong Kong when drafting and seeking to enforce non-compete clauses:

  • Non compete covenants should be precisely drafted with geographic limits that genuinely reflect the scope of the business interest being protected; broad, unrestricted worldwide restrictions are unlikely to be enforceable.
  • The duration must be justified by reference to the shelf life of the confidential information at stake, and the scope of competitive activity caught by the clause should be clearly delineated and proportionate to the employer's actual field of business.
  • When seeking enforcement, employers must identify with precision the specific confidential information they seek to protect, clearly distinguishing protectable trade secrets from the employee's own professional skill and knowledge.
  • Finally, employers must act promptly when they become aware of a potential breach; delay in seeking injunctive relief can prove fatal, particularly where the injunction would effectively constitute final relief.

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