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Back to basics: English court grants ASI in Russia-related dispute
Back to basics: English court grants ASI in Russia-related dispute
22 November 2023
Series
Blogs
22 November 2023
The trend of claimants in Russia-related disputes seeking anti-suit injunctions (ASIs) to restrain Russian proceedings in breach of an arbitration agreement continues with the latest case of Renaissance Securities (Cyprus) Limited v Chlodwig Enterprises Limited & Ors [2023] EWHC 2816 (Comm),in which the seat of arbitration was in England. We briefly explore this judgment and contrast it with other recent case law.
Background
The dispute in Renaissance Securities arose out of English law governed Investment Services Agreements between the claimant and each of the defendants (all on substantially similar terms) which referred disputes to LCIA arbitration seated in England. The defendants (all beneficially owned by a designated person) commenced proceedings in Russia (despite the arbitration agreements) following a refusal by the claimant to comply with any payment instructions in light of international sanctions. The proceedings in Russia were based on the much discussed Article 248 Russian Commercial Procedure Code.
The claimant sought (ex parte) an ASI and an anti-anti-suit inunction (AASI) to, respectively, restrain the defendants from pursuing the Russian proceedings and to protect its position from any pre-emptive or counter measures the defendants may apply for in Russia. Dias J granted both on an interim basis until the return hearing.
Principles and reasons for grant of ASI
In this case, as England was the seat of arbitration, Dias J applied well-established, robust, jurisprudence (primarily The Angelic Grace principle) that an ASI will usually be granted in circumstances where proceedings are brought in breach of an arbitration agreement, unless there are strong reasons to refuse relief [34]–[37].
As to breach, the judge found that the arbitration agreements were governed by English law and that the disputes were within the scope of the arbitration agreements [38-40]. Similarly, as to “strong reasons” not to grant the ASI she found that none existed. In particular, (and with the benefit of Russian law expert evidence):
AASI granted to pre-empt a Russian ASI
As, under Article 248, the Russian courts have power to grant ASIs, the claimants also sought an AASI to preclude such an application being made by the defendants. In this respect, the judge noted that the principles applied to an ASI were the same for granting an AASI, and, whilst, generally speaking, comity was important, where the foreign proceedings are in breach of a forum selection clause, such objections didn’t apply. As it was likely that the defendants would make such an application under Article 248 and the evidence showed the Russian courts would act quickly, the AASI was also “just and convenient” [51]-[54].
Other procedural points
Dias J’s judgment was also noteworthy for the following reasons:
Comment
The court’s judgment is a clear illustration that the English court is willing to be robust in granting ASIs where the arbitration agreement provides for a seat in England. This is well-established as a matter of English law. In the context of Russian related disputes and Article 248, which are generating numerous applications in England for ASIs, the overall lesson is that there is likely to be a more straightforward process where the seat is in England than where it is abroad. In particular (as noted above) there is a clear ground for obtaining permission to serve out, and the scope for arguments concerning appropriate forum/discretion is much narrower (see, for example, our posts on recent Russia related foreign seated ASIs here).
In the ASI sphere, the judgment, albeit noting that it is in the context of an ex parte interim application, also contains more specific points of comfort to parties facing proceedings under Article 248. In particular, the judge’s treatment of that law as being irrelevant to the situation before her illustrates the narrow approach that English courts take to finding application of a law not present in the parties’ agreement. Furthermore, to the extent that courts adopt a similarly robust approach to alternative service that may also provide assistance.