INTERNATIONAL PRIVATE LAW
Arcadia Petroleum Ltd v Bosworth
Jurisdiction—“matters relating to individual contracts of employment”—what amounts to a contract of employment
The claimant companies were members of an oil trading group. The defendants were the de facto chief executive officer and chief financial officer of the group. The claimants brought proceedings in England, seeking, inter alia, damages for unlawful means conspiracy and breach of fiduciary duty. The defendants denied the allegations and challenged the jurisdiction of the English court on the basis that these were “matters relating to individual contracts of employment”, such that Art.20 of the Lugano Convention 2007 required them to be sued in Switzerland, their place of domicile.
The High Court dismissed the defendants’ jurisdictional challenge, as did the Court of Appeal. The defendants then appealed to the Supreme Court, which referred, inter alia, the following questions to the ECJ.
(i) What is the correct test for determining whether a claim advanced by an employer against an employee constitutes a “matter relating to” an individual contract of employment within the meaning of Section 5 to Title II of the Lugano Convention?
(ii) To what extent is it necessary for there to be a relationship of subordination between the company and the individual for that contract to constitute an “individual contract of employment” for the purposes of Section 5 of the Lugano Convention?
Decision: The contract between the claimants and the defendants in the present case did not amount to an “individual contract of employment” for the purposes of Art.18 of the Lugano Convention.
Held: A contract between a company and a natural person performing the duties of director of that company does not create a relationship of subordination between them and so cannot be an “individual contract of employment”, even though (a) the company’s shareholders are able to terminate the contract; and (b) the director determines or may determine the contract’s terms and has control and autonomy over the day-to-day operation of that company’s business and the performance of his own duties.