Jurisdiction: Where No 'Choice of Law' Clause in Employment Contract

In Chunilal v Merrill Lynch, a UK national originally based in London but who had lived and worked in Hong Kong since 2003, wanted to claim a discretionary bonus from his employer, a company registered in the US state of Delaware. The issue was whether he could bring his claim in the UK High Court. Generally, contract disputes must be decided in accordance with the law chosen by the parties to the contract. In the absence of any agreement on this point, demonstrated by the terms of the contract or the circumstances of the case, an employment contract will be governed 'by the law of the country in which the employee habitually carries out his work'. In this case, there was nothing written into the contract. The High Court decided that the contract had been 'made' in New York. The claimant had flown to New York to negotiate the terms of his contract and then returned to London. A legally binding contract was concluded when his faxed acceptance was received in New York. The fact that he had previously worked for the same employer in London, that his new contract was termed a 'secondment' and that it was stated in the contract that, in the event of termination, 'UK termination conditions would apply', did not alter the fact the he was employed to work in Hong Kong. His claim should be brought in the Hong Kong court.

Points...