Lloyd's Maritime and Commercial Law Quarterly
WHO IS BOUND BY THE BRUSSELS REGULATION?
Samengo-Turner v. Marsh & McLennan
Successful reinsurance brokers are apparently valuable people. If the prospect of their defecting to a rival organization is unsettling, then it was probably ever thus. If today’s employer dare not trust a lengthy restrictive covenant to do what loyalty will not achieve, then why not appeal to simple greed? Marsh McLennan Inc, incorporated in Delaware, went about it this way. Three English employees were employed by MSL, the English limb of the Marsh McLennan group. Another group entity, GCL, also incorporated in Delaware, made a separate contract with the employees to provide and pay “incentive awards”, to encourage the employees to remain with MSL or an affiliate. The contract provided for New York law and exclusive jurisdiction; and, under it, any payments made were recoverable in the event of misconduct by the employees. Having taken the benefits, the employees resigned their employment to join an industry rival.1
MSL immediately put them on garden leave; but, when several other brokers at MSL were approached by the rival, Marsh McLennan cried foul.2
GCL, but not MSL, brought proceedings in New York. Unsurprisingly enough, the New York court rejected a challenge to its jurisdiction.3
Despite the fact that proceedings were underway in the contractual forum, the employees commenced proceedings in England, against GCL and MSL, for a worldwide anti-suit injunction. In Samengo-Turner
v. J & H Marsh & McLennan (Services) Ltd
4
the Court of Appeal, reversing David Steel J,5
granted the relief sought. The incentive contract was unquestionably valid and binding according to its governing law; it called for the performance of no illegal act; and the New York court had rejected challenges to its enforceability. For the English court to find that there was, nevertheless, a right to breach the contract, which should be protected by a final6
injunction to restrain performance of
1. The contract with GCL explicitly disavowed any intention to restrict the employees’ or MSL’s rights to terminate the employment.
2. At the time of writing, there are plenty of allegations, and more suspicions. But hard facts are few. This note does not pretend to have any idea where the truth will be found to have lain.
3. See [2007] EWCA Civ 723, [15].
4. [2007] EWCA Civ 723.
5. (6 June 2007) Unreported. The judgment does not appear to be in the public domain.
6. Though David Steel J had declined to grant an interim injunction, the Court of Appeal, with the consent of the parties, treated the appeal as though the application were for a final, not an interim, injunction: at [21].
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