UK: jurisdiction clause in settlement agreement did not prevent proceedings where employee domiciled

The Commercial Court has ruled that a Dutch jurisdiction clause in a settlement agreement waiving claims on termination did not prevent an employer suing the employee in the member state in which he was domiciled (England) in respect of alleged breaches of the employment contract discovered subsequently and for annulment of the settlement agreement (if it was held to bar the damages claim) on the grounds of fraud or mistake.

Such jurisdiction agreements are only effective to oust the jurisdiction of the employee’s domicile if they are entered into after the relevant dispute has arisen.  In the first decision on this point, the Commercial Court ruled that a dispute will have arisen at a particular time only if the parties have disagreed on a specific point and legal proceedings in relation to that point are imminent or contemplated.  There is no “dispute” just because the parties are aware of circumstances which could potentially give rise to a claim.    (Yukos International UK BV v Merinson)

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Filed under Employment-related claims- procedure and form, International mobility (including secondments, migrant workers, territorial jurisdiction), Jurisdiction: UK

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