On 24 August 2023, Mr Justice Robin Knowles CBE granted an interim negative anti-suit injunction (‘ASI’ for short) to enforce the arbitration rights of the claimant as a matter of English law in the context of civil proceedings commenced against it by the defendant in the Arbitrazh Court in the Russian Federation. Those first-seised substantive proceedings concern contracts containing provision for English law and arbitration under the ICC Rules in Paris.
By Article 248 of the Arbitrazh (Commercial) Procedure Code, introduced by legislative amendment in June 2020, a court is no longer obliged to stay its process and refer parties to arbitration in certain circumstances relating to imposition of international sanctions – notwithstanding that the Russian Federation is a signatory to the 1958 New York Convention (“NYC”). This new provision conferring exclusive jurisdiction and anti-suit powers upon arbitrazh courts has been widely interpreted by the Supreme Court of the Russian Federation since late 2021.
The claimant sought ASI relief from the English court because (i) no equivalent relief is available in the French courts as the chosen seat of arbitration and (ii) the Russian court will not grant a stay in favour of arbitration as required by Article II(3) of the NYC.
At the time it was decided, this was the third known occasion on which the Commercial Court considered the availability of ASI relief in respect of English law arbitration rights involving non-English seat:
- Mr Justice Calver granted interim injunctive relief in March 2022 in a case involving proceedings in the Republic of Mali where the parties’ agreement contained both a Paris-seat arbitration clause and a non-exclusive jurisdiction clause in favour of England: see link.
- Mr Justice Bright recently refused interim ASI relief in SQD v. QYP [2023] 2145 (Comm) on the basis that England is not the “proper forum” to grant such relief given the reason for its non-availability as a remedy in French law, being the presumed curial law where Paris seat is chosen for arbitration: see link.
Unlike the position in the SQD case, there is no arbitration on foot or in prospect in the present case. Whether or not the French court has formal curial jurisdiction in this procedural context, it was argued that an English ASI would not offend or be contrary to public policy as a matter of French law. It was further argued that international comity justifies the grant of coercive relief by a non-curial court of a NYC-signatory state (England) to uphold an arbitral bargain which is not being enforced by grant of a mandatory stay in the courts of another NYC-signatory state (Russia) such that this would not offend the curial court in another NYC-signatory state (France). ASI relief and NYC mandatory stay are regarded as “opposite and complementary sides of a coin” per Males J (as he then was) in Nori Holding Ltd. v. PJSC ‘Bank Otkritie Financial Corpn’ [2019] Bus LR 146 at [105]-[106], [113]: see link.
In his approved ruling issued in public on 6 September 2023, Knowles J held that the legal systems of England, France and Russia can be said to have a “shared obligation” to uphold an arbitral bargain in accordance with the scheme of the NYC. He concluded:
“The evidence before this Court allows further room for emphasis of the point … that both the English court and the French court are likely to have the same objective of seeking to make the bargain between the parties work where that bargain has been made. That, as it strikes me, speaks to comity between the English court and the French court by the step that I now propose to take, rather than a difference or tension or other difficulty or clash.”
An expedited final hearing of the ASI proceedings has been listed in the Commercial Court on Friday 22 September 2023.
Stephen Houseman KC, now leading Stuart Cribb for the final hearing, instructed by Charles Claypoole, Ram Mashru and Alexander Cox of Latham & Watkins LLP, acts on behalf of the claimant.
