NDA Drops, Rights Stay: The Win Before Filing

by Harvey Specter Jr., Law, Business & Power Correspondent

---

€1.35 billion. One number. And the man who holds it just made a smarter move than most lawyers would have advised.

The anonymous Mega Millions winner — the one who sued his ex-partner for allegedly telling her family about the jackpot win, in breach of a non-disclosure agreement — is dropping the lawsuit. Not because he lost. Not because she won. Because he read the room and understood something that takes most people years to learn: the moment you file, you've already started losing. Every court date is a newspaper headline. Every deposition is a crack in the wall you built to stay anonymous. The lawsuit itself was the threat. The threat did its job. Now you put the gun back in the drawer.

This is the NDA lesson nobody teaches in any contract law course in Malta or anywhere else, and it's the one that matters most.

An NDA is not a cage. It's a mirror. It shows the other party exactly what happens if they talk — and the mere existence of that mirror, held up at the right angle, is usually enough. Most people who sign NDAs never violate them. Not out of loyalty. Out of the rational calculation that the consequences written into that document are real and the person holding it knows how to use them. The winner of $1.35 billion had resources to enforce. His ex-partner had a family that now knows to stay quiet. The lawsuit was the enforcement mechanism. The withdrawal is the proof it worked.

In Malta, NDAs have become fashionable in ways that should make any serious practitioner uncomfortable. You see them attached to employment terminations, settlement agreements, property transactions, influencer collaborations. Most of them are poorly drafted. Many of them are unenforceable. And almost none of them have been tested in the Maltese courts in any way that gives you a clean precedent to work from.

Here is what Maltese law actually gives you: Article 998 of the Civil Code, which addresses breach of confidence and obligation, and the framework established under the Protection of Trade Secrets Act, Chapter 589 of the Laws of Malta, which transposes EU Directive 2016/943 on the protection of undisclosed know-how and business information. That directive — Trade Secrets Directive is its shorthand — creates a defined legal category for confidential information and gives you remedies that include injunctions, damages, and the seizure of infringing goods. It is a sharper instrument than most people realise, and most people never reach for it because they've already gone straight to a poorly worded NDA drafted in twenty minutes at the end of a deal.

The problem with the average Maltese NDA isn't the intention. It's the architecture. A confidentiality clause that doesn't define what's confidential, doesn't specify the duration of the obligation, doesn't identify the permitted exceptions, and doesn't include a damages mechanism is essentially a polite request dressed up in legal language. It creates the appearance of protection without the substance. I've sat across the table from people who thought they had ironclad NDAs and watched their counsel quietly realise the document had no teeth. That's a bad moment to have that realisation.

There's a case I won years before anyone knew my name — a small business owner in Valletta, a consultancy arrangement that went sideways, a former partner who walked out with client lists and proprietary methodology and started competing the next week. The NDA they'd signed was two paragraphs. Barely worth the paper. But I didn't need the NDA to win. I used the Trade Secrets Act. I used the Civil Code. I sent one letter. One phone call followed. The competing operation closed before we ever got close to filing anything. The business owner kept asking me what happened in court. I told him: nothing happened in court, and that's why you won.

Justice Minister Clifton Grima said it plainly this week — justice cannot be based on suppositions. He's right, and it cuts both ways. If you want to enforce a confidentiality obligation, you cannot go to court with a document that supposes the other party understood what they were agreeing to. You need a contract that actually creates the obligation, defines it, and prices the breach. Supposition is what you use when the drafting was weak. Precision is what you use when you want to win before anyone files anything.

The Mega Millions winner understood this. He had leverage. He used it. He put it away