August 31, 2015

Court of Appeal Grants Anti-Suit Injunction

In the case of Petter v EMC Corporation [2015] EWCA Civ 828, the Court of Appeal has granted an injunction restraining non-compete proceedings in the U.S. In doing so, it overturned the High Court’s decision that we reported on last month in “Irreconcilable Clash of Jurisdictions.”

To recap, the High Court (HC) determined that it had exclusive jurisdiction in relation to non-compete proceedings brought in Massachusetts against a U.K.-based employee by the U.S. parent of his U.K. employer. This was in spite of the fact that the proceedings had been brought in accordance with the governing law and jurisdiction provisions of the agreement being litigated over. Nevertheless, the HC had refused to grant the injunction primarily because (a) doing so would mean that the U.S. parent could not pursue the proceedings in the jurisdiction that had been contractually agreed with the employee, and (b) it felt this was required in the interests of comity. 

On appeal, the Court of Appeal (CA) agreed that the HC had exclusive jurisdiction but held that it was wrong to refuse the injunction. It therefore granted the injunction. The CA felt bound by U.K. case law which established that in such cases an injunction should ordinarily be granted to protect the employee's U.K. statutory employment rights. It is also noteworthy that the CA was unimpressed by the fact that the U.S. parent had demonstrated an unwillingness to co-operate with it.

This case should be noted by U.S. employers of EU-based employees as it shows the U.K. courts are willing to become involved in proceedings brought outside the EU, even where the agreement in question expressly states that any dispute will fall within the exclusive jurisdiction of a foreign court.

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