A US appeals court was warned that it could start an "international firestorm" permitting other countries to plunder personal emails in the US if it forces Microsoft to hand over emails on a server in Dublin.

Lawyers for the technology company and the US government made oral arguments in a New York court on Wednesday in a long-running case in which US federal investigators are trying to access an email address stored in Ireland as part of a narcotics investigation.

Microsoft is appealing the ruling of a US District Court order forcing the company to comply with a December 2013 search warrant seeking the msn.com emails of a suspected drug trafficker whose nationality has not been identified.

The firm refused to comply with the warrant, directing investigators to seek an order from an Irish court instead.

The case is being closely watched by the tech industry and civil liberty advocates concerned about privacy as outdated domestic US privacy legislation lags the overseas growth of large US corporations.

In the wake of the disclosures by former National Security Agency contractor Edward Snowden about sweeping government spying on emails and internet use, technology companies are resisting government attempts to access data in an effort to protect customer interests.

More than two dozen companies including Apple and Verizon filed "friends of the court" documents supporting Microsoft's case.

Lawyer Joshua Rosenkrantz, for Microsoft, told the Court of Appeals for the Second Circuit that if the order stands the US would open up a “global free-for-all” that would damage the privacy of individuals and allow foreign governments to plunder the private emails of Americans.

“We would go crazy if China did this to us,” said Mr Rosenkrantz. “This is a matter of national sovereignty.”

Pave the way

The ruling could pave the way for overseas governments to force tech companies with a local business to turn over private information belonging to their clients to their law enforcement agencies.

“If that is the rule, that’s a rule for global chaos,” he told the three-judge court in a federal courthouse in lower Manhattan.

Microsoft has said the emails are protected by Irish and European privacy laws and that the correct way of accessing them is through a “bilateral mechanism” known as a mutual legal assistance treaty through which the US makes a request to the Irish Department of Justice.

The US department of justice maintains that even though the emails are stored in Ireland they should be entitled under a US warrant to receive them directly from a US company at home.

Assistant US attorney Justin Anderson, for the US government, argued that the warrant entitled investigators to seek electronic information held by US companies, even data stored overseas.

Judge Gerard Lynch said during a hearing that lasted more than an hour that he understood when the Irish Government said in an "amicus" or friend of the court brief, submitted by an interested party, that the order compels US agents to go to Ireland to search for the emails.

The warrant did not raise issues of extra-territoriality as “the disclosure is here,” said Mr Anderson, describing the data being sought as being similar to investigators seeking account details from a bank.

The information was in the “custody and control” of Microsoft, he said, and that it was an “international norm” for a sovereign government to be able to compel the production of records.

Asked by Judge Lynch about the laws Microsoft was concerned about, the firm's lawyer noted a court submission by former Irish attorney general Michael McDowell who said the disclosure of data in Ireland was only lawful under the ruling of an Irish court.

Microsoft said that the US Congress never envisaged US companies storing private correspondence of customers on overseas servers when it passed the Stored Communications Act, part of the Electronics Communications Privacy Act, in 1986 under which investigators issued the warrant to access the email.

Judge Lynch said that it would be “helpful” if Congress updated legislation around email storage and online privacy but he implied that he was not expecting any quick action in Washington, despite Microsoft pointing out the large number of legislators willing to sponsor a bill.