The decision of the Court of First Instance
Carlson DHCJ rejected all Soler's defences. In respect of the defence of "restraint of trade", Carlson DHCJ held that the arrangement between the parties was a joint venture and the parties were of equal bargaining power. Soler appealed on the primary ground that the Agreements was in restraint of trade. The decision of the Court of Appeal
Restraint of trade
The Court of Appeal stated that Soler's pleading in respect of their allegation of restraint of trade was wholly defective and should have prevented the point from being considered any further. The CA held that "a contract is not regarded in law as being in restraint of trade simply because it ties the parties during the continuance of the contract."
Assuming the study made by Jonathan Parker J in Panayiotou & Ors v Sony Music Entertainment Ltd  EMLR 229, the CA concluded that in considering whether a contract falls within the legal category of being in restraint of trade, a two stage process should be invoked. The CA agreed with Carlson DHCJ's finding that the arrangement between Hummingbird and Soler was a type of joint venture and held that there is no restraint of trade.
The Court found that there was no inequality of bargaining power between the Plaintiff and the Defendants. The Plaintiff was a novice manager and the Defendants had some industry experience.
One of the issues raised by the Defendants was that the 2nd Agreements were voidable for undue influence. In doing so, the Defendants alleged that there existed a relationship of confidence between manager and artist, in which the Plaintiff “occupied a position of dominating influence”. This would give rise to the issue of undue influence when the artist enters into a transaction which cannot be explained by ordinary motives.
However, the Court rejected the Defendants’ arguments. Since the Defendants were individuals in their mid-thirties who...