Facts
The Appellant entered into six investment service agreements (“the ISAs”). Each with a separate, Russian company. They were defendants in English proceedings (“the Defendants”). Two were also the First and Second Respondent.
The ISAs were governed by English law. They contained a London Court of International Arbitration agreement, governed by English law, with a seat in London. Each agreement was materially similar.
A dispute arose. The Defendants directed the Appellant to return assets that they held pursuant to an ISA. The Appellant refused on the basis that the Defendants were subject to sanctions. It was agreed that the First Respondent was directly sanctioned, and that the Second Respondent is or was a subsidiary of the First Respondent, and, therefore, indirectly sanctioned.
Each of the Defendants issued proceedings in Russia against the Appellant. They were materially similar, contractual claims for the return of assets held under the ISAs, or damages amounting to the cost of the same.
Around the same time, the Respondents issued proceedings against three Russian affiliates of the Appellant. These were known as “the Renaissance Russian Entities”. The proceedings related to contractual claims for damages that the Respondents had against the Appellant (“the Russian Claims”).
The Renaissance Russian Entities provided letters consenting to resolution of the Russian Claims by arbitration.
Issues
There were two main issues.
First, whether the Russian Claims were in breach of a contract between the parties. Secondly, whether the Russian Claims were otherwise vexatious or oppressive.
The former was a “contractual”, and the latter a “non-contractual”, basis.
Discussion
Singh LJ (with whom Males and Phillips LJJ agreed) gave the leading judgment.
The grant of an anti-suit injunction is discretionary.
It may have been preferable for the parties, and certainly the Appellant, to have included a term in the agreements that claims would not be brought against the Appellant outside the scope of arbitration by the London Court of International Arbitration.
Nevertheless, there was no such term. The court must construe the agreement that the parties have reached; not impose another, better agreement.
The contractual basis did not assist the Appellant.
The principles relating to the non-contractual basis are not identical to those relating to forum non conveniens. An injunction is a restriction on a party. It is not an interference with the exercise by the foreign court of its own jurisdiction.
There are two classes of an anti-suit injunction claim. First, “alternative” forum cases. Secondly, “single” forum cases. Only in the former (and not the latter) is there consideration of whether the English court is the natural forum for the dispute.
As this was a single forum case, there could be no consideration of whether the English court was the natural forum for the dispute. Accordingly, the trial judge erred in this respect.
The parties therefore agreed that this Court was entitled to exercise the discretion again, so as to decide whether or not to grant an anti-suit injunction.
There was “force” in the submission that the proceedings in Russia against the Renaissance Russian Entities were vexatious and oppressive. If the claims were not in breach of the arbitration agreements, however, they did not appear to be designed to circumvent, and undermine, those agreements.
In principle, there were three reasons to contemplate granting an anti-suit injunction.
First, to protect the integrity of the arbitral process. Secondly, to protect the integrity of the orders made by courts of this jurisdiction. Thirdly, to protect the public policy of the UK sanctions regime.
For a party to seek to circumvent the UK sanctions regime was to seek an “illegitimate juridical advantage”.
The Russian Claims were based on Russian law, against Russian defendants, with no connection to this jurisdiction. Accordingly, if an anti-suit injunction was granted, there was no forum other than the Russian Court in which those claims could be litigated.
This was inherent in single forum cases, such as this. It follows that they were not reasons to prevent an anti-suit injunction from being granted.
The submission that the Renaissance Russian Entities submitted to the jurisdiction of the Russian Court was rejected. At best, the evidence was unclear. Fundamentally, it was immaterial. Whether the Appellant submitted to the jurisdiction was what mattered.
The Respondents submitted that the Appellant no longer had a legitimate interest in the appeal, as the original basis was that the Renaissance Russian Entities were affiliates of the Appellant, but the Appellant had recently sold two of the three, and the third denied affiliation.
The precise nature of the relationship between the Appellant and the Renaissance Russian Entities would have a material significance for the discretionary remedy sought by the Appellant.
Despite permission for further evidence, the evidential picture remained “far from clear” because the Appellant did not provide evidence that it was at risk of liability, so as to justify the grant of an anti-suit injunction.
Accordingly, there was “more force” in the Respondents’ submission that the Appellant had no legitimate interest to protect in this appeal.
Consequently, the non-contractual basis did not assist the Appellant.
Disposal
An anti-suit injunction was refused.
The appeal was dismissed.
Males LJ (with whom Phillips LJ agreed) also added that the Appellant had not put before the Court the fullest possible knowledge and understanding of all the circumstances relevant to the litigation and the parties to it.
Accordingly: “In a case where the discretionary remedy of an anti-suit injunction, with its potential implications for international comity, is in issue, this is particularly important.”
It was therefore unnecessary to decide whether an injunction would otherwise be justified on the grounds that proceedings brought in Russia against the Renaissance Russian Entities were vexatious and oppressive, or that they were brought in breach of the arbitration clauses.
Written by Dominic Bright.
Commercial. Construction. Property.