UK: Court of Appeal due to consider whether US exclusive jurisdiction clause or EU jurisdiction rules should prevail

The Court of Appeal is due to consider whether a UK-domiciled employee's right under EU rules to be sued only in the UK should be given precedence over proceedings in the US pursuant to a US exclusive jurisdiction clause, in an application for an anti-suit injunction against the US proceedings.

The issue will be of particular interest to multi-national employers who offer global incentive agreements to senior employees worldwide, often subject to standard restrictive covenants expressed to be governed by the law and jurisdiction of the non-EU parent company (or the company to whose stock the awards relate). If the employees then breach these covenants, can the employee be sued for repayment in the parent company's jurisdiction?

In Samengo-Turner v Marsh & McLennan the English Court of Appeal granted an injunction restraining US employers from continuing New York proceedings against English employees who were trying to bring their own proceedings here contrary to a US exclusive jurisdiction clause, on the grounds that the Brussels Regulation required the employees to be sued in their place of domicile. The Court was prepared to enforce this rule, even though it is a rule of allocation of jurisdiction between EU member states and not on its face appearing to confer private rights on defendants (against non-European employers or at all).

Commentators' criticism of the Samengo-Turner decision found favour with the High Court in the recent case of Petter v EMC Europe based on similar facts. Noting that the injunction is a discretionary remedy, the court refused to grant an anti-suit injunction against the proceedings already commenced by the employer in Massachusetts pursuant to an exclusive jurisdiction clause. The Court of Appeal is listed to hear the appeal in the middle of July 2015.