On Wednesday 18 September 2024, the Supreme Court handed down judgment in UniCredit Bank GmbH v. RusChemAlliance LLC [2024] UKSC 30. The 113-paragraph judgment of Lord Leggatt (with whom Lord Reed, Lord Sales, Lord Burrows and Lady Rose agreed) contains the reasons for the Supreme Court’s dismissal of the jurisdiction appeal and corresponding grant of final injunctive relief as publicly announced (see here) after the expedited hearing in mid-April.
The background to the dispute, including the impact of international sanctions upon Russian-related transactions, has been summarised in the context of the Court of Appeal’s decision in late January of this year: see here. The judgment of the Supreme Court deals separately with jurisdictional gateway (paragraphs [16] to [63]) and the question of whether the English Court has power to grant anti-suit injunctive (‘ASI’) relief to enforce an arbitral bargain which specifies a foreign seat for arbitration (paragraphs [64] to [112]).
Gateway – 6BPD 3.1(6)(c): The gateway issue concerned the governing law of the arbitration agreement contained in each of the bonds in circumstances where the instruments themselves were expressly governed by English law and the arbitral seat was stated to be Paris. The Supreme Court agreed with the Court of Appeal that this constituted a choice of English law to govern the separable arbitration agreement, noting (at [27]) that there is no legal significance in any distinction between express or implied choice. On this basis there was no scope for the choice of seat, and hence curial law of an arbitral process, to influence the governing law of the arbitration agreement, applying the guidance set out in Enka v. Chubb [2020] 1 WLR 4117 at [170]. The Supreme Court took the opportunity to clarify that the exception contemplated in Enka [170](vi)(a) should in future be disregarded, there being no basis for imputing to contracting parties a different intention as to choice of law by reason of their choice of arbitral seat ([59]).
Proper Place – CPR 6.37(3): A number of key points emerge from this part of the judgment:
- The grant of ASI relief is not an aspect of the court’s supervisory/supportive jurisdiction – hence it is not a “supervisory function” of the curial court – in respect of an existing or prospective arbitral process; rather, it is part of the general law of the forum, enshrined in s.37 of the Senior Courts Act 1981, whereby promises may be enforced by coercive remedy ([90], [95]-[99]). The fact that England is not the putative curial court does not, therefore, preclude the existence or exercise of such injunctive jurisdiction.
- An agreement to submit disputes to arbitration does not prohibit court proceedings seeking coercive relief to enforce that exclusive jurisdictional bargain ([85]). Such enforcement furthers the “strong international policy of giving effect to” such agreements as reflected in article II(3) of the New York Convention ([68]).
- Where the parties have chosen England as arbitral seat, the Court will readily enforce their bargain according to well-established principles summarised in Enka itself ([71]).
- As regards choice of foreign seat, the ultimate question for threshold jurisdiction in a claim to enforce an arbitral bargain by (interim or final) coercive remedy is whether the choice of foreign seat makes it “inappropriate to do so” by analogy to s.2(3) of the Arbitration Act 1996 ([89]-[93]). The traditional Spiliada test of forum (non) conveniens is inapt to deal with this kind of relief which is itself designed to hold a party to its promise to resolve a substantive dispute outside England. In such cases there may be no single forum which is clearly and distinctly the most appropriate to grant such coercive remedy ([73]-[75]). Where the so-called ‘contract gateway’ has been satisfied, as here, England is presumed to be the ‘proper place’ as a starting point ([93]).
- In the present case neither the French court (as putative curial court) nor an ICC arbitral tribunal seated in France could have granted or awarded “any, or any effective, remedy” to enforce the arbitral covenants in the bonds ([94]-[112]). Thus, the English Court could and should do so given (i) the “substantial connection with England & Wales” where the relevant contractual rights are governed by English law ([83]) and (ii) the absence of comity concerns when enforcing arbitral rights generally ([78]) and specifically those that are “the subject of international agreement among the states concerned” – namely the UK, France and Russian Federation, which are all bound by the New York Convention ([79]-[80]).
- In these circumstances, England & Wales is the ‘proper place’ to grant final mandatory ASI relief either through the presumption by analogy to s.2(3) or, if applicable, by applying the traditional Spiliada test to the claim ([112]).
A link to the judgment can be found here.
Stephen Houseman KC, leading Professor Jonathan Harris KC (Hon) of Serle Court in the Supreme Court and Stuart Cribb at all three court levels, represented the claimant bank in these expedited anti-suit proceedings, instructed by Charles Claypoole and Alex Cox of Latham & Watkins LLP in London.
