[F]oreign companies doing business in India often seek to include confidentiality, non-compete and non-solicitation covenants in their agreements with senior management and employees, as is customarily done in certain foreign jurisdictions. However, Indian courts have consistently refused to enforce post-termination non-compete clauses in employment contracts, viewing them as “restraint of trade” impermissible under Section 27 of the Indian Contract Act, 1872 (the Act), and as void and against public policy.
There are, however, certain exceptions to this general rule. Also, confidentiality obligations may be covered by the rule in certain situations. In the article, Valerie and Janaki discuss situations where Indian courts have found exceptions — which can often be fact-specific. For the full article, click here.