B. Background

The English claimants, Mr Samengo-Turner, Mr Whyte and Mr Hopkins, were senior brokers employed in England by the first defendant, J & H Marsh & McLennan (Services) Limited (MSL). MSL is the English service company for the Marsh & McLennan group of insurance companies, and employs individuals to provide services to other group members. Each of the claimants had a contract of employment with MSL, and provided services in London to the second defendant, Guy Carpenter & Co LLC (GC, a Delaware entity) and an associated English company not party to the proceedings.

During their employment, Mr Samengo-Turner and his colleagues became eligible to participate in an executive incentive scheme, and in November 2005 each received an award under the scheme. Awards were administered by the group holding company, Marsh & McLennan Companies Inc (MMC, a Delaware company based in New York and the third defendant in the English proceedings). Each employee signed a document (subject to New York law and jurisdiction) setting out the terms and conditions of the award. In particular, awards were subject to cancellation and rescission if the recipient engaged in ‘detrimental activity’ and rescission triggered an obligation to repay to MMC any amount received in the previous 12 months. The document also contained various covenants in favour of group companies. Those covenants were modified for UK employees by a schedule expressed to be construed in accordance with English law and subject to the non-exclusive jurisdiction of the English Court.

In April 2007, having received as part of their awards sums totalling more than £175,000, Mr Samengo-Turner, Mr Whyte and Mr Hopkins gave notice to terminate their employment and disclosed their intention to join a competitor seeking to establish itself in the London market. They were put on garden leave. One month later, GC and MMC brought proceedings against them in the Federal Court for the Southern District of New York, seeking injunctive relief to compel compliance with the covenants in the award document, and repayment of payments made to them on the ground that they had (allegedly) engaged in ‘detrimental activity’, in particular by soliciting others to join them at their new employer. The New York court ordered that discovery, interrogatories and depositions take place.

On 6 June 2007, the English claimants sought an anti-suit injunction, initially on an interim basis, to restrain GC and MMC, together with MSL (although not a plaintiff in New York), from pursuing the New York proceedings. David Steel J rejected their application. The claimants appealed, and separately applied to the Court of Appeal for a temporary injunction to maintain the status quo while the appeal was heard. The Court (Rix and Arden LJJ) refused to make that order, on the ground that the balance of convenience favoured the English defendants. Subsequently, the claimants issued further English proceedings, based on the conduct of the New York proceedings, alleging repudiatory breaches of the defendants' obligations under the employment contracts and the award scheme.

On 29 June 2007, New York Federal District Judge Denise Cote rejected Mr Whyte's motion to dismiss the New York proceedings on jurisdiction grounds, a motion based on a supposed inconsistency between the New York choice-of-court provision in the main body of the award scheme terms and conditions, and the English choice-of-court provision in the schedule. In the District Judge's view, ‘the clear and ambiguous meaning of the Agreement is that New York provides the exclusive forum for that litigation. The forum selection clause in Schedule II.D does not apply to that issue, and is in any event non-exclusive’.Footnote ³

The main appeal from the decision of David Steel J was argued on 6 July 2007 before Tuckey, Longmore and Lloyd LJJ. With the consent of the parties, they considered not only whether the claimants were entitled to an interim anti-suit injunction but also whether they were entitled to a final order restraining the New York proceedings.Footnote ⁴ On 12 July 2007, allowing the appeal, the Court granted an injunction to restrain the New York proceedings. On the same day, GC and MMC gave notice to discontinue their action voluntarily, without prejudice.

C. The Court of Appeal's Reasoning

Tuckey LJ delivered the first judgment, with which the other members of the Court agreed. Having recited the factual background, he turned to consider the provisions of Section 5Footnote ⁵ of Chapter II of the Brussels I Regulation. He posed the question thus: ‘The first issue for the judge to decide was whether [the provisions of Section 5] were engaged. Did the claimants have a right not to be sued in New York for breach of the bonus agreement?’Footnote ⁶

Disagreeing with the Judge, Tuckey LJ concluded that (a) the New York proceedings did relate to the claimants' ‘contracts of employment’ for these purposes, giving that concept an autonomous meaning;Footnote ⁷ and (b) GC and MMC, the New York plaintiffs, should be treated as the English claimants' Section 5 ‘employers’ because they ‘as companies within the same group [as MSL, the employer] have an economic interest in the contracts containing those terms and their enforcement and should be subject to the same jurisdictional restraint as MSL’.Footnote ⁸ This, his Lordship suggested, ‘recognised the reality of the situation without adopting an over formalistic approach’,Footnote ⁹ and without piercing the corporate veil ‘in any real way’.Footnote ¹⁰

Tuckey LJ considered that these conclusions gave effect to the objectives of the Brussels I Regulation by (a) achieving certainty; (b) avoiding multiplicity of proceedings; and (c) by ensuring that all those companies in the Marsh & McLennan group who wished to sue on the terms of the award scheme were required to sue in the courts of the employees' domicile. Otherwise, he argued, MMC and any other company in the group could sue in New York and (because of the provisions contained in the schedule) MSL would have to sue in England.Footnote ¹¹ Tuckey LJ was also apparently comforted by his views that ‘[t]he English courts have the closest connection with the dispute, concerning as it does the claimants’ activities during their employment and receipt of the award in England' and ‘[t]he fact that the plan is administered and regulated in New York is of no relevance to the present proceedings’.Footnote ¹² For good measure, he added:

From this point, his Lordship appeared to consider the path to an anti-suit injunction to be a short one. First, the engagement of the provisions of Section 5 (in particular, Article 21) required the English Court to disregard the exclusive jurisdiction clause in the award scheme terms and conditions, because it was agreed before the dispute arose.Footnote ¹⁴ Secondly, Section 5 conferred a ‘statutory right’ on Mr Samengo-Turner and his colleagues to be sued in England, for which damages would not be an adequate remedy.Footnote ¹⁵ On this point, significantly, the defendants' advocate appears to have conceded that there existed a sufficient legal basis for an anti-suit injunction, while arguing that the Court should exercise its discretion to refuse relief in the interests of comity.Footnote ¹⁶ Thirdly, although caution must be exercised, principles of comity are not offended by granting an injunction which does no more than require a party to comply with his legal obligations.Footnote ¹⁷ Fourthly, as the New York Court could not give effect to the Brussels I Regulation and had in any event already rejected one challenge to its jurisdiction, ‘the only way to give effect to the English claimants' statutory rights is to restrain those proceedings’.Footnote ¹⁸

Tuckey LJ concluded:

D. A Right to Sue and Be Sued in European Community Courts?

The Court of Appeal's decision to grant an injunction is quite clearly based on the assumptions that, if the provisions of Section 5 of Chapter II of the Brussels I Regulation were engaged (because the matter was one relating to an individual contract of employment and the English defendants all constituted the claimants' ‘employers’), (a) those provisions conferred a ‘statutory right’ on the employees not to be sued in New York; and (b) that ‘statutory right’ provided a sufficient basis for the granting of an injunction against the ‘employers’.Footnote ¹⁹ Neither of those assumptions appears to have been questioned by the Court or by the parties. Nevertheless, it is submitted that they are unsustainable as a matter of European Community law.

Following the decision of the Court of Justice in Owusu v Jackson,Footnote ²⁰ it can no longer be denied that (a) Article 2 of the Brussels I Regulation and, probably, other rules in Chapter II conferring jurisdiction or requiring that jurisdiction be declined are mandatory in nature, like the corresponding provisions in the 1968 Brussels Convention (see below);Footnote ²¹ and (b) the Regulation, to some extent, also applies to circumstances involving relationships between the courts of a single Member State and those of a non-Member State.Footnote ²² Further, a passage in the ECJ's Opinion on the Lugano Convention Footnote ²³ has led some to concludeFootnote ²⁴ that the Brussels I Regulation exclusively regulates jurisdiction in civil and commercial matters in EC courts, with the consequence that Member States cannot, other than by way of express delegation or derogation in the Regulation,Footnote ²⁵ decline jurisdiction in favour of a non-Member State, irrespective of the strength of the connection with the non-Member State. Whether or not that conclusion is correct,Footnote ²⁶ neither Owusu nor the Lugano Convention Opinion supports the proposition that the Brussels I Regulation creates legal rights and obligations between Community litigants, let alone rights and obligations which support the grant of an injunction to restrain proceedings in a non-Member State. Indeed, there is every indication that the Brussels I Regulation imposes obligations not on hapless Community litigants, but solely on the courts of the Member States. Thus, instead of emphasizing that Mr Owusu had a legal right to sue Mr Jackson in England under Article 2 of the Regulation, the ECJ sought to emphasize the negative consequences which a stay on forum conveniens grounds would have in terms of legal certainty and uniformity.Footnote ²⁷ Further, in Owusu, in affirming the mandatory character of Article 2, the ECJ relied on passages from its earlier judgments in Erich Gasser GmbH v Misat Srl Footnote ²⁸ and Turner v Grovit,Footnote ²⁹ each of which refers to ‘a compulsory system of jurisdiction, … which all the courts within the purview of the [Brussels] Convention are required to respect’.

Although it is not in doubt that the EC Treaty and legislative instruments, particularly Regulations, are capable of creating rights and obligations affecting (or effecting) relationships between between private persons,Footnote ³⁰ the existence and scope of any private rights/obligations must in each case depend on the proper construction of the particular Treaty article or legislative provision.Footnote ³¹ A closer examination of the legislative background, nature and terms of the Brussels I Regulation strongly supports the conclusion that it does not create any rights or obligations of this character.Footnote ³²

First, as to legislative background, the Brussels I Regulation was intended to bring under the canopy of mainstream EC law the regime established by the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters. As an international treaty of a more traditional kind, the Brussels Convention created rights and obligations between States and not between private individuals and States. The recitals to the Regulation emphasized the need for continuity between the Brussels Convention and the Regulation.Footnote ³³ Further, although those recitals also recorded that it was considered ‘necessary and appropriate that the rules governing jurisdiction and the recognition and enforcement of judgments be governed by Community legal instrument which is binding and directly applicable’,Footnote ³⁴ that view was justified on the basis of the need for amendments to the Brussels regime to be effective and for legal certainty, rather than the need to create directly effective rights and obligations between Community litigants.Footnote ³⁵

Secondly, as to the nature of the Brussels I Regulation, it is submitted that the rules contained in Regulation and its predecessor Convention do exactly what they say on the tin, that is to say they (a) introduce uniform rules governing the jurisdiction of Member State courts in civil and commercial matters; and (b) create a simplified procedure, and uniform rules, for the recognition and enforcement of judgments between Member States.Footnote ³⁶ Such rules, being rules of private international law, govern relations between private litigants only indirectly, and then only through regulation of the claimant's access to particular judicial procedures vis-à-vis his opponent. They are essentially procedural rules, albeit of a special character. Thus, the ECJ has repeatedly emphasized the position of Community litigants under the 1968 Convention in terms of their ability to foresee the venue for litigation.Footnote ³⁷ That is the language of legitimate expectation, not of obligation. Further, although the Brussels Convention undoubtedly had as one of its primary objectives the legal protection of persons established within the EC,Footnote ³⁸ and the ECJ has often referred to that objective in its decisions,Footnote ³⁹ that consideration does not in itself support the conclusion that the Regulation was intended to create confer rights on such persons.Footnote ⁴⁰

Thirdly, as to the terms of the Brussels I Regulation, it is submitted that the rules of jurisdiction contained in Chapter II (including Section 5) can only be understood as directions to the courts of Member States as to the circumstances in which they are required or entitled to accept, or decline, jurisdiction. It is, of course, possible to point to particular provisions which are capable of being understood as mandating or empowering Community litigants to act in particular ways. Most obviously, Article 2.1 provides that ‘[s]ubject to this Regulation, persons domiciled in a Member State shall … be sued in the courts of that Member State’. Further, Article 5.1 provides that ‘[a] person domiciled in a Member State may also be sued’ in other Member State courts having special jurisdiction. Most relevantly, so far as Samengo-Turner is concerned, Article 20.1 provides that ‘[a]n employer may bring proceedings only in the courts of the Member State in which the employee is domiciled’.Footnote ⁴¹ Nevertheless, other, closely related rules suggest that the appearance of ‘statutory rights’ is but a mirage. Thus, Article 2.1 is immediately followed by, and must be read together with, Article 2.2, which can only be understood as a direction to Member State courts.Footnote ⁴² Similarly, Article 20 is contained in Section 5, entitled ‘Jurisdiction over [not ‘under’] Individual Contracts of Employment’.

There is, therefore, no suggestion that Article 20.1, or Article 2.1 for that matter, does anything other than define the circumstances in which Member State courts themselves are obliged to, or unable to, treat themselves as competent to determine particular claims. In this context, it is submitted that the apparent language of obligationFootnote ⁴³ should be seen as extending no further than the judicial authorities of the Member States. If rules contained in the Brussels I Regulation support the recognition of directly effective EC law rights as being conferred on Community litigants,Footnote ⁴⁴ it is submitted that such rights lie against the Member States only, requiring their judicial authorities in specified circumstances either to accept or to decline jurisdiction, with the possibility of a claim in damages under EC law in the event that those authorities act inconsistently with the Regulation.Footnote ⁴⁵

That view, it is submitted, is reinforced by the language and effect of Section 9 (Lis Pendens—Related Actions) of the Regulation.Footnote ⁴⁶ If, as Samengo-Turner suggests, Article 20.1 confers a legal right on the employee to insist that his employer sue him only in the courts of his domicile (or, equally, if Article 2.1 confers a legal right on a person domiciled in a Member State to insist that another person sue him in that Member State, unless the Regulation expressly provides an alternative), it seems surprising that (1) the employer (or other claimant) may escape his obligations, temporarily or permanently, by the simple expedient of bringing proceedings in another Member State; and (2) the employee (or other defendant) is unable to take action in another court having jurisdiction over the employer (or other claimant) to render effective his EC law right by means of injunctive or other relief,Footnote ⁴⁷ but is limited to contesting the jurisdiction of the unlawfully seised court. Yet, conclusion (1) describes the effect of Article 27 of the Regulation and conclusion (2) describes the combined effect of the ECJ's decisions in Erich Gasser Footnote ⁴⁸ and Turner v Grovit, at least in so far as injunctive relief is concerned.Footnote ⁴⁹ These two decisions have been criticized as being impractical and encouraging abusive proceedings.Footnote ⁵⁰ Nevertheless, the theoretical basis which underpins them, the principle of mutual trust between Member States,Footnote ⁵¹ makes sense only in the context of a regime in which the relevant obligations (to accept or decline jurisdiction) are imposed on the Member States themselves, and not on individual litigants. Equally, the phraseology of Article 27, in terms of directions to Member State courts to stay proceedings or decline jurisdiction, appears to bear no relation to the ‘legal rights’ supposedly conferred by earlier provisions, but it can readily be reconciled within an intra-state system establishing a framework regulating litigants' access to judicial procedures in the EC.

It is striking that in Samengo-Turner, the Court of Appeal gave effect to the employees' supposed EC law rights by means of an anti-suit injunction. This is striking (and probably wrong) not only because, in doing so, the Court deployed a remedy which triggers acute hostility in civil law jurisdictionsFootnote ⁵² and which the ECJ has excluded where ‘breach’ takes place in a Member State,Footnote ⁵³ but also because it extended the obligation supposedly created by Article 20.1 of the Brussels I Regulation to acts outside the territory of the EC by non-EC domiciled parties and, in so doing, indirectly imposed the EC's jurisdictional rules on US proceedings. Even if, contrary to the argument presented above, the Regulation is capable of creating rights and obligations between Community litigants, a separate question of construction surely arises as to whether such rights/obligations should regulate conduct outside the EC by persons not domiciled in a Member State.Footnote ⁵⁴ Unfortunately, neither point was addressed by the Court of Appeal.

The Court of Appeal's decision in Samengo-Turner also has at least two surprising consequences. First, if Tuckey LJ is correct that ‘the only way to give effect to the English claimants’ statutory rights is to restrain' proceedings in a non-Member State then, having regard to the principle of ‘effectiveness’ of EC law formulated by the Court of Justice,Footnote ⁵⁵ it would seem strongly arguable that (a) other Member State courts must now follow the Court of Appeal's lead and grant anti-suit injunctions to restrain ‘breaches’ of the Regulation committed in a non-Member State; and (b) Member State courts (including those in England) have no discretion to refuse relief, for example on the ground that the applicant has delayed in seeking a remedy or of ‘comity’ towards the foreign court. A court in Paris or Berlin would, almost certainly, view this prospect with alarm. Secondly, Article 20.1 is not the only candidate for the status of ‘Regulation right’. Indeed, Article 2 is more clearly expressed in mandatory terms. On this basis, if the Court of Appeal is correct, then anti-suit injunctions may in future be sought by persons domiciled in the EC who are sued in a non-Member State. Thus, if Mr Owusu's accident had occurred in Florida and he had chosen to sue Mr Jackson there in hope of a better damages award, might Mr Jackson have persuaded an English court to grant an anti-suit injunction on the basis of a breach of his legal right to be sued in England? It seems unlikely that this argument would have garnered the court's sympathy, but it is the same as the one which was accepted by the Court of Appeal in Samengo-Turner.

D. Conclusion

One can sympathize with the Court of Appeal's desire to protect English employees, although Mr Samengo-Turner and his colleagues were perhaps well capable of looking after themselves. The decision, however, to grant an anti-suit injunction to restrain proceedings brought by the ‘employers’ in New York on the basis of a supposed breach of a ‘statutory right’ derived from Community law seems questionable, and has wider implications in terms of our understanding of the nature and effect of the Brussels I Regulation. Given that the Court's conclusion that it had power to grant an injunction appears to have rested, at least in substantial part, on a concession by the defendants' advocate, and given that Tuckey LJ's judgment contains no analysis as to the nature of the rights and obligations created by the Brussels I Regulation, it is respectfully submitted that the decision should not be accepted as a precedent for future cases, whether involving Section 5 or other rules of jurisdiction in Chapter II of the Regulation.