The Supreme Court of the Russian Federation considered the case of non-competition in franchising.
And he canceled the decisions of all previous instances in part, sending the case for a new trial. The arbitration court of the first instance, and then the court of appeal and cassation, did not find grounds for imposing sanctions for conducting a similar business in the presence of a restrictive condition in the commercial concession agreement. Obviously, the Supreme Court of the Russian Federation did not agree with this conclusion.
A dispute about non-competition flared up in Udmurtia, where LLC "LaserLove" (a well-known network of hair removal salons, the owner of know-how or a production secret) entered into a franchise agreement with entrepreneur Damir Khusainov. The latter was allowed to use a set of intellectual rights, including production secrets, but with the condition not to carry out similar (competing) activities, not only during the period of the contract, but also for several years after its termination. The contract separately stated that the fact of its termination did not affect the obligations that had arisen earlier, and a fine of one million rubles was provided for each violation. The ban applied both to the entrepreneur himself and to affiliated persons.
LLC "LaserLove" applied to the court because Khusainov continued to carry out similar activities after receiving a notice from the company about the termination of the contract due to a violation of the non-competition clause. In addition, the company considered that the entrepreneur committed a violation when opening a similar business with an affiliated person. Therefore, the amount of claims in the lawsuit amounted to two million rubles. The Khusainovs filed a counterclaim for the recognition of the condition on the ban on conducting similar activities as invalid.
The courts consistently rejected all claims in the main and counterclaims. They did not find evidence of the third party's affiliation and indicated that after the termination of the contract, all its conditions cease to be valid (that is, they did not consider the competition condition as a separate obligation).
In fact, a non-competition clause was included in the agreement, which is poorly regulated by Russian law; the Supreme Court of the Russian Federation has never considered such a case. For the practice of law enforcement, it is of great importance, since the condition of a ban on similar activities is often found, including in employment contracts. The Russian Federation declares the protection of competition, but reasonable and justified conditions for non-competition are allowed, however, the courts often recognize that the clauses of contracts do not meet these requirements.
The Supreme Court of the Russian Federation canceled the decisions of the courts regarding the refusal of the claim for the recovery of a fine for continuing to carry out competing activities. Therefore, in terms of dismissal of the claim on the competing activities of an affiliate, he agreed with the conclusions of his colleagues. The reasoning part of the decision has not yet been published.
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