In a judgment handed down today in Nori Holdings Ltd & others v. Public Joint-Stock Company << Bank Otkritie Financial Corporation >>  EWHC 1343 (Comm), Mr Justice Males addresses “some interesting questions” relating to the court’s power to grant an anti-suit injunction (‘ASI’) in respect of foreign proceedings, including those pending before the courts of another EU member state.
The Claimants sought final ASI relief against the Defendant, a Russian bank, in respect of two sets of proceedings commenced by it against multiple defendants (including the Claimants) before the Moscow Arbitrazh Court and the Limissol Court in Cyprus. The basis for the claim for ASI relief was the Defendant’s alleged breaches of LCIA arbitration agreements contained in five share pledge agreements and related termination agreements (governed by Cypriot law and providing for LCIA arbitration in London) forming part of a structure of financing transactions which the Defendant challenged in both sets of foreign proceedings on the basis that they formed part of a large-scale fraud resulting in loss in the region of US$600 million. The Central Bank of Russia appointed a temporary administrator over the Defendant several weeks after the impugned transactions were effected in August 2017, leading to the commencement and pursuit of insolvency-related proceedings by the Defendant in the Moscow Arbitrazh Court and subsequent substantive civil fraud claims in Cyprus. The Claimants also commenced ten LCIA arbitrations.
Males J concluded that it was appropriate for the High Court to exercise its general statutory power to grant ASI relief notwithstanding that an arbitral tribunal was constituted and capable of granting the same relief (as sought by the Claimants in their requests for arbitration) and without reference to the specific remedial provisions of the Arbitration Act 1996: see paragraphs 32 to 42 of the Judgment.
As regards the Cypriot proceedings, Males J held that the ECJ decision in West Tankers Inc. v. Allianz SpA (Case C-185/07)  Ac 1138 remains binding after the introduction of the Brussels Recast Regulation (No.1215/2012). The judge rejected the reasoning of Advocate General Wathelet in Proceedings concerning Gazprom OAO (Case C-536/13)  1 WLR 4937 and held that the West Tankers decision reflects EU law on this point. As such, the court has no power to grant ASI relief in respect of proceedings pending before the courts of another EU member state: see paragraphs 69 to 102 of the Judgment.
As regards the Russian proceedings, Males J concluded that the claims under Russian bankruptcy legislation to invalidate the pledge termination agreements and reinstate the share pledges on the basis of ‘unequal consideration’, whilst a type of insolvency proceedings under Russian law which resemble s.238 of the Insolvency Act 1986, were nevertheless arbitrable as a matter of English (or Cypriot) law and fell within the scope of the relevant arbitration agreements: see paragraphs 43 to 68 of the Judgment.
Males J held that there were no ‘strong reasons’ for refusing ASI relief in respect of the Russian proceedings. Donohue v. Armco was distinguished on two separate grounds: first, the distinction between enforcing (by stay or injunction) an arbitration agreement rather than an exclusive jurisdiction clause; and, secondly, the fact that it was not possible for the whole underlying dispute to be resolved in a single (foreign) forum: see paragraphs 103 to 114 of the Judgment.