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This case if of importance to those dealing with international employment disputes, especially the cross-border enforcement of restrictive covenants. It considers recent employment cases of Samengo-Turner and Petter.

Following a hearing on 3 December 2019, the Court of Appeal has referred the following questions to the European Court of Justice (“CJEU”) for a preliminary ruling.

• Does Article 4(1) of Regulation (EU) No 1215/2012 ("the Judgments Regulation" aka “Brussels I Recast”) confer a directly enforceable right upon a person domiciled in a Member State?

• If it does:

         - Where such a right is breached by the bringing of proceedings against that person in a third State, is there an obligation upon the Member State to provide a remedy, including by the grant of an anti-suit injunction?

         -  Does any such obligation extend to a case where a cause of action available in the courts of a third State is not available under the law applicable in the courts of the Member State?

Background

The underlying case arises from the breakdown of a relationship between the Claimant, Ms Gray, who is domiciled in England and the Defendant, Mr Hurley, who is a New Zealand national. When Ms Gray's solicitors began to assert her rights to various assets, Mr Hurley issued proceedings in New Zealand, where statute creates a presumption that “relationship property” will be divided in equal shares between qualifying co-habiting couples. Ms Gray sought to rely on Article 4(1) of the Judgment Regulation to restrain Mr Hurley from pursuing those proceedings. 

Article 4(1) provides that: "Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State”. 

Ms Gray contended that this provided her with a right not to be sued outside England, and that the Court was obliged to give effect to this right by the grant of an anti-suit injunction. The Court of Appeal expressed some scepticism about this argument but concluded that the meaning of Article 4(1) is not acte clair, so referred the questions set out above to the CJEU. 

Implications 

As Court of Appeal identified, if the CJEU answers its questions in the affirmative, this will have “profound” consequences and lead to “extreme results that would not be contemplated by an application of domestic law” [at 50].  

Under the common law, the anti-suit jurisdiction is exercised with caution and an injunction will only be ordered where it is appropriate to avoid injustice. Where a remedy is available in two jurisdictions the English court will generally only order an anti-suit injunction where proceedings in the foreign court would be vexatious or oppressive. Where, as in this case, the respondent would not be able to bring the proceedings elsewhere if the anti-suit injunction is ordered (“single forum cases”) the threshold is even higher, and an injunction will only be ordered if the proceedings in the foreign jurisdiction were so unconscionable that it could be regarded as the infringement of an equitable right. Yet, depending on precisely how the CJEU answers the Court of Appeal’s questions, anti-suit injunctions may become available to a party domiciled in a Member State in all of those circumstances.  

Subject to the timing of the CJEU’s ruling (if indeed it makes one, it not currently being clear how any references from the English Courts that are outstanding at the end of the transition period following Britain’s exit from the EU will be dealt with), it may be a case of anti-suit injunctions being used to prevent proceedings from being brought in England and Wales rather than requiring them to be (as Ms Gray was seeking to do), since those in England and Wales will no longer be domiciled in a Member State, whereas those domiciled in the EU27 countries would, so could rely on Article 4(1), including as against proceedings brought in the UK courts. In that scenario the effect may still be “profound”, just not specifically in relation to how the common law jurisdiction on anti-suit injunctions applies. This effect may be attentuated, however, since anti-suit relief is a relatively unknown creature in civil law systems.

In the meantime, the reference may provide a basis for interim anti-suit relief to restrain proceedings in third states, since the Court of Appeal’s conclusion that the correct interpretation of the Judgments Regulation is not sufficiently clear for it to make a ruling would suggest there is at least a serious issue to be tried as to whether Article 4(1) provides a sufficient basis for an anti-suit injunction to be granted. 

Employment law implications

The reference may be of particular interest to employment practitioners in light of Ms Gray's argument that the Court was bound to grant an anti-suit injunction in her case due to its earlier decisions in Samengo-Turner v J & H Marsh McLennan (Services) Ltd [2007] EWCA Civ 723 and Petter v EMC Europe Ltd [2015] EWCA Civ 828 (case judgments can be found here and here), where such relief was granted in the context of the special provisions of the Judgments Regulation dealing with employees. 

In order to determine whether it was bound by these decisions, the Court of Appeal spent some time analysing what exactly was decided in those cases, concluding that the ratio of Samengo-Turner, as followed in Petter, is that Article 22(1) of the Judgment Regulation provides an employee domiciled in a Member State with a right to be sued by his or her employer only in the courts of his or her domicile, and that where the employer seeks to litigate in a third State the employee's right should ordinarily be protected by means of an anti-suit injunction i.e. the reasoning in those cases did not extend beyond the employment context. This is where matters rest for now, but it seems reasonably likely that the CJEU’s ruling (if it is forthcoming) will touch on the decisions in Samengo-Turner and Petter as well.

Paul Goulding QC and Andrew Scott appeared for the succesful claimant in Petter v EMC.

The judgment for Gray v Hurley can be found here.

Clerks

Staff