Three contract drafting failures left this employer without legal protection
A Hong Kong court refused to enforce a non-compete against a former fund manager, finding the employer had insufficient prospects of success.
On 13 February 2026, the Hong Kong Court of First Instance handed down its decision in Pando Finance Limited v Ng Ean Kiam [2026] HKCFI 1046, dismissing the asset management firm's application to restrain its former Portfolio Manager, Ng Ean Kiam, from working at a competitor.
Ng, a Singaporean national with over 30 years in financial services, joined Pando Finance under a Service Agreement dated 22 February 2024. After completing probation, he received a Confirmation Letter on 21 May 2024 containing a 12-month non-compete covenant, restricting him from joining any business that directly or indirectly competed with the company.
He resigned on 9 January 2025 and formally left on 8 April 2025. In mid-April 2025, he joined MicroBit Capital Management Limited as Managing Director and Senior Portfolio Manager. His SFC licence was transferred from Pando Finance to MicroBit on 29 April 2025. Pando Finance says it discovered this in around July 2025 and commenced legal proceedings on 22 August 2025. An earlier attempt at an interim-interim injunction at a call-over hearing on 29 August 2025 was refused: the court found Pando Finance had failed to prove urgency and that the balance of prejudice did not favour granting relief at that stage. The substantive hearing followed on 25 September 2025.
Mr Recorder Richard Khaw SC found Pando Finance had failed to demonstrate good prospects of establishing the clause was enforceable, for three reasons. It contained no geographical restriction, effectively applying worldwide without justification. Its 12-month term lacked any demonstrated business rationale, with the court finding there was "no evidence of any particular operational strategies or treatment of any special information or intelligence which would require the employees to adhere to the 12-month non-compete period." And the clause was drafted so broadly it could have prevented Ng from working even in traditional asset management, far beyond Pando Finance's actual field of business. The question of whether the clause is ultimately enforceable remains to be decided at a full trial.
Two further disputes featured in the proceedings. Ng argued no valid consideration was provided for his agreement to the restrictions in the Confirmation Letter. He also alleged that the company's CEO told him verbally that the clause "was a mere formality and would not be enforced." Pando Finance denied any such statement was made and argued the written Confirmation Letter would supersede any prior discussions. The court left both points for full trial.
On confidentiality, Pando Finance alleged Ng had access to its regulatory filings and ETF product applications and passed those to MicroBit, helping the firm launch a competing Bitcoin ETF. Ng disputed that his role ever involved making SFC applications, and presented evidence that MicroBit's draft prospectuses had been prepared before he joined the company. The court found no reasonable basis to infer that Ng had relied on confidential information belonging to Pando Finance, as opposed to non-confidential information or his own skill and knowledge. It also noted that key product features of Pando Finance's ETFs were broadly generic, with detailed information publicly accessible via prospectuses on the SFC's website. Pando Finance also alleged that Ng refused to hand over his work laptop password and deleted emails from his account upon departure, conduct it characterised as suspicious. The court found this allegation carried no probative weight in the absence of specifics about what information was actually at risk. Ng had separately provided undertakings to comply with his contractual confidentiality obligations, which the court noted could be enforced in the same way as a breach of a court order, and which Pando Finance did not argue were incapable of providing adequate protection.
The court also found Pando Finance had delayed in bringing its application. The transfer of Ng's SFC licence to MicroBit was publicly visible on the SFC's website from 29 April 2025, and the court found reasonable grounds to conclude Pando Finance should have known of, or made inquiries about, Ng's new employment by late April or early May 2025. Costs were ordered in Ng's favour.
The case is a practical reminder that non-compete clauses must be carefully constructed to withstand scrutiny. The geographic scope should be defined and justified by the employer's actual business footprint. The duration must be tied to a documented and demonstrable business need. The breadth of the restriction should genuinely reflect the employer's field of business rather than casting an unnecessarily wide net. And any verbal assurances made during onboarding must align with what the written agreement actually requires, because where they do not, courts will take notice.
