Does a Director’s Duty of Confidentiality Continue After Termination?
The Position Under Cyprus Law
A recurring and commercially sensitive question in corporate practice is whether a director’s fiduciary duty of confidentiality survives resignation or dismissal.
The Cyprus Companies Law (Cap. 113) does not codify directors’ fiduciary duties. Instead, these arise from equitable principles recognised and enforced by the Cypriot courts. Confidentiality, however, is no longer a purely equitable question. Since 2020, Cyprus has had a dedicated statutory regime for trade secrets, so the modern analysis runs on two tracks at once: the equitable fiduciary duty inherited from English common law, and the statutory protection introduced by The Protection of Undisclosed Know-How and Business Information (Trade Secrets) from Unlawful Acquisition, Use and Disclosure Law of 2020 164(I)/2020 (“Trade Secrets” Law or “Law 164(I)/2020”). The two overlap, and the practical point for any company is that the strongest protection sits where they meet. The question of post-termination confidentiality therefore requires careful analysis of equity, statute, case law, and persuasive English authorities.
This article examines the current legal position in Cyprus.
1. The Source of Directors’ Fiduciary Duties in Cyprus
Directors owe fiduciary duties to the Company, not to individual shareholders. This principle has long been established in common law authorities such as:
- Boardman v Phipps
- Cook v Deeks
- Percival v Wright
These authorities confirm that directors must:
- Act in good faith in the best interests of the company as a whole
- Avoid conflicts of interest
- Not exploit corporate opportunities
- Exercise powers for proper purposes
Although not codified in Cyprus, these equitable principles form part of Cypriot law and are routinely applied by the courts. The duty of confidentiality is not a free-standing obligation bolted on to this list. It is a facet of the same fiduciary core: the obligation of good faith, the rule against conflicts, and the rule against profiting from one’s position. That matters in practice, because it means a director who walks out with the company’s confidential information is not merely in breach of a private promise — he is in breach of the highest duty the law recognises in commercial life, and the remedies that attach to a fiduciary breach are correspondingly powerful.
2. How Does the Duty of Confidentiality Arise?
The duty of confidentiality arises where information is obtained in circumstances importing trust and confidence.
This may occur:
- Through employment
- Through appointment as a director
- Through any fiduciary position granting access to sensitive corporate information
In Brent Brewery Co Ltd v Hogan, the English court confirmed that confidentiality obligations may arise even in the absence of an express contractual term.
This principle was expressly referred to by the Cypriot Court of Appeal in:
- L Protopapa & Co LLC v George Pamboridis LLC
That judgment is now highly relevant authority on post-termination confidentiality under Cypriot law.
The Statutory Route: The Trade Secrets Law of 2020
Equity is no longer the only door. The Trade Secrets Law, which transposed Directive (EU) 2016/943, gives Cyprus its first dedicated statutory regime for confidential business information. For the first time, a company does not have to argue its way through equitable principles alone; it has a clear statutory cause of action, a statutory definition of what it is protecting, and a statutory menu of remedies.
Information qualifies as a trade secret under the Law where it is (i) secret, in that it is not generally known or readily accessible to those who normally deal with that kind of information; (ii) commercially valuable because it is secret; and (iii) subject to reasonable steps by the person controlling it to keep it secret. That third limb is where most companies win or lose. The statute does not protect information a company merely treats as sensitive in its own mind; it protects information the company has actually taken steps to guard. A departing director can do enormous damage with a client list, a pricing model or a deal pipeline — but whether the law treats that material as a trade secret will turn on whether the company marked it confidential, restricted access to it, and bound the people who handled it. The protection is, in a real sense, something the company earns in advance and the steps taken to communicate the nature of the information are key when a breach is considered by the court.
Where the threshold is met, the Law arms the holder with a powerful set of remedies: interim and final injunctions to stop the use or disclosure, orders prohibiting the production or marketing of goods that derive from the misuse, delivery up or destruction of the offending material, and damages for the loss suffered. Critically, the Law expressly recognises that once confidentiality is lost it cannot be restored — which is precisely why the Cypriot courts are empowered to grant swift provisional measures. For a company facing a director who is about to walk, that statutory urgency is the whole point. A claim for trade-secret misuse under Trade Secrets Law now sits alongside the equitable claim for breach of fiduciary duty, and the two are frequently pleaded together.
3. Does the Duty Continue After Resignation?
The General Rule
As a general principle, fiduciary duties terminate upon resignation or dismissal.
However, confidentiality obligations may survive termination — particularly where:
- Trade secrets are involved
- The information retains a high degree of sensitivity
- The former director gains an unfair competitive advantage
The survival of the duty is fact-specific and depends largely on the nature of the information. This is where the real commercial risk lives. The point at which the general fiduciary relationship lapses — resignation — is precisely the point at which a departing director is most tempted to use what they know. The danger is not abstract: it is the senior person who leaves on a Friday and is competing on a Monday with the company’s client relationships, its pricing intelligence and its pipeline still fresh in hand. The law does not leave the company defenceless at that moment, but it does ask a hard question in return — what, exactly, did the company do in advance to mark this information as protected? A company that can answer that question well is in a strong position. A company that cannot is relying on litigation to rescue what good drafting should have secured.
4. Springboard Injunctions: A Key Protective Remedy
Where a former director retains an unfair advantage, a company may apply for a “springboard injunction.”
The leading authority is:
- QBE Management Services (UK) Ltd v Dymoke
A springboard injunction aims:
“to deprive a wrongdoer of the unlawful advantage derived from his wrongdoing.”
Importantly:
- It is preventative, not punitive.
- It can apply even before proven misuse.
- It must be proportionate and time-limited.
In Forse v Secarma Ltd, the court emphasised that such injunctions must be granted only for a reasonable period.
The Cypriot Position
In Protopapa (2024), interim injunctions had restrained the dismissed managing director of a law firm from contacting clients and employees for approximately 3.5 years.
On appeal, the Court of Appeal held that:
- Protection must be time-limited.
- Trade secrets may justify stronger protection.
- 3.5 years was sufficient in the circumstances.
Significantly, the Court examined the substance of the director’s role, not merely the title. Despite holding the title of managing director, the individual was not deemed functionally indispensable to the firm.
This confirms that Cypriot courts conduct a careful factual assessment. It is worth noting that the springboard injunction is no longer the company’s only fast remedy. Where the information in question qualifies as a trade secret, the interim measures available under the Trade Secrets Law of 2020 run in parallel, and a Cypriot court can be asked to grant urgent provisional relief on a statutory footing as well as an equitable one. In practice this gives a company two overlapping bases for the same urgent application — and the more sensitive and well-guarded the information, the stronger both look. The general framework for interim injunctions in Cyprus under section 32 of the Courts of Justice Law (Law 14/1960) sits behind all of this, requiring a serious question to be tried, a probability of success, and that it would be difficult or impossible to do complete justice later without the order.
5. Continuing Fiduciary Obligations: Persuasive UK Authority
While Cyprus law does not expressly codify continuing fiduciary duties, persuasive UK authority is instructive.
Section 170(2) of the UK Companies Act 2006 provides that the duty to avoid conflicts continues post-resignation in relation to:
- Property
- Information
- Opportunities
of which the director became aware while in office.
This principle has been examined in:
- Shepherds Investments Ltd v Walters
- CMS Dolphin Ltd v Simonet
Courts interpret this narrowly — particularly in cases involving “maturing business opportunities” arising during the director’s tenure but pursued after resignation.
Although not binding in Cyprus, these authorities carry persuasive value.
6. The Position in Palmer’s Company Law
Palmer’s Company Law — the leading authority relied upon by company lawyers and judges — confirms that:
- The fiduciary relationship formally ends upon resignation;
- Certain obligations survive;
- A former director may not exploit property or opportunities acquired while in office;
- Misuse of confidential information remains actionable;
- The former director may be required to account for profits derived from breach.
Palmer also draws the crucial distinction between:
- Protected confidential information and trade secrets (which remain protected); and
- General skill, knowledge and experience (which a former director may freely use).
This distinction is central in litigation involving former directors. The classic statement of that distinction is the Court of Appeal’s decision in Faccenda Chicken Ltd v Fowler, which separated information that merely needs to be treated as confidential during employment — and which, once learned, becomes part of the individual’s general skill and knowledge — from genuine trade secrets, which remain protected after the relationship ends. Faccenda also delivered the lesson that sits at the heart of this whole article: where the employer had no express confidentiality covenant, the sales information it tried to protect was held to be usable by the departing staff. The protection failed not because the court was unsympathetic, but because the company had not built the protection in advance. That is as true for a Cypriot company in 2026 as it was for an English one in 1986 — and the statutory definition of a trade secret under Law 164(I)/2020, with its requirement of “reasonable steps” to maintain secrecy, now puts that same lesson on the statute book.
7. Practical Conclusion Under Cyprus Law
Under Cypriot law:
- Fiduciary duties arise from equitable principles.
- Confidentiality may survive termination.
- Trade secrets receive heightened protection.
- Relief must be proportionate and time-limited.
- The court’s analysis is fact-specific and role-sensitive.
- Trade secrets now enjoy a parallel statutory cause of action and remedies under Law 164(I)/2020, pleadable alongside the equitable claim.
- Statutory protection must be earned in advance: it reaches only information the company has taken reasonable steps to keep secret.
Where information is highly sensitive and confers a competitive advantage, courts are more willing to grant interim and springboard injunctions.
However, injunctions are protective — not punitive — and damages may be preferred where loss is quantifiable.
Final Observations
The question of whether confidentiality survives termination is not answered by a simple rule. It depends on:
- The nature of the information
- The gravity of the director’s role
- The presence of unfair advantage
- The proportionality of the remedy sought
Cypriot courts adopt a measured, equitable approach, informed by both domestic jurisprudence and persuasive English authorities.
For companies, the safest course remains proactive contractual drafting combined with swift injunctive relief where necessary. In practical terms, that means doing the unglamorous work before there is a dispute. Put express, post-termination confidentiality and non-use covenants in directors’ service agreements and shareholders’ agreements, drafted to a reasonable scope and duration so they survive challenge. Define, in writing, what the company treats as confidential, and then actually treat it that way — restricted access, marked documents, controlled systems — so that the “reasonable steps” limb of the Trade Secrets Law is satisfied long before it is tested. Manage the exit: garden leave, return-of-property and deletion obligations, and a clean record of what the departing director had access to. And when something does go wrong, move quickly, because both the equitable springboard jurisdiction and the statutory interim measures reward the company that acts within days rather than months.
The law, in other words, gives a well-prepared company a great deal of protection. What it will not do is supply, after the event, the protection the company failed to build in advance.
