In recent months, UK courts have issued several decisions, some of them contradictory, on applications for anti-suit injunctions (“ASIs”) – a common law relief ordering a party not to bring legal actions in a jurisdiction or forum other than the one provided for in the contract – in disputes involving ICC arbitration clauses with a seat in Paris.
These disputes arose from a liquefied natural gas processing plant construction project in Russia and involved RusChemAlliance (“RCA”), a joint venture formed by two Russian state-owned companies, and Deutsche Bank, Commerzbank, and the German subsidiary of UniCredit (the “German banks”). Following the war in Ukraine, RCA’s co-contractor, the German company Linde, suspended its works, which led RCA to call the guarantees taken out by Linde with the German Banks on behalf of RCA for a total amount of €776 million. The contracts containing these bank guarantees were subject to English law and provided for an ICC arbitration with a seat in Paris.
RCA argued that European sanctions against it rendered the arbitration agreement unenforceable (notably because of alleged difficulties in finding counsel to represent it and in organising a “fair and impartial” hearing in Paris) and, for this reason, sued the German banks before the Arbitration Court at the Saint Petersburg Chamber of Commerce and Industry, which, since June 2020, has exclusive jurisdiction under Russian law to resolve disputes involving parties subject to international sanctions against Russia. In turn, the German banks applied to English courts for ASIs to prevent RCA from pursuing the legal actions it initiated in Russia.
The English courts handed down five decisions on this matter in the space of two months.
A first decision dated 21 August 2023 dismissed Deutsche Bank’s application for an interim ASI on the grounds that English courts did not have jurisdiction to make such an order, given the parties’ choice of Paris as the seat of the arbitration and the impossibility of obtaining an ASI under French law.
However, two other first instance decisions issued on 24 and 31 August 2023 granted the interim ASIs requested by UniCredit and Commerzbank. In contrast to the first decision, the judges considered that the parties’ choice of English law as the law applicable to the contract was sufficient to grant them jurisdiction over the matter and, based on different evidence, concluded that ASIs did not offend French public policy and that French courts were not hostile to their recognition.
In a subsequent ruling dated 7 September 2023, the Court of Appeal overturned the first decision refusing the ASI requested by Deutsche Bank. Based once again on new evidence, the Court of Appeal ruled that French law was not hostile to the recognition of ASIs granted by foreign courts. Because of the impossibility of obtaining such relief in France, the Court of Appeal held that English courts had jurisdiction to issue a relief which, according to its analysis, simply amounted to enforcing the parties’ obligations arising out of a contract subject to English law.
This last judgement might have marked the end of these legal twists and turns had it not been for the subsequent refusal of another English judge to grant the final (as opposed to interim) ASI sought by UniCredit. In a decision dated 22 September 2023, the court held this time that it did not have jurisdiction because the seat of the arbitration was in Paris, and further found that the application of English law to the contract and the impossibility of obtaining an ASI under French law could not justify the jurisdiction of an English court, which in its view could not interfere with this matter.
In all these cases, the main issues relate to the law applicable to the arbitration agreement, a topic on which the French and English courts have been at odds for decades (Dallah, Kout food).
Therefore, we are witnessing the developments of a new judicial saga opposing French and English arbitration law, which the UK Supreme Court will no doubt be called upon to settle in the coming months.
For more information on this topic: https://globalarbitrationreview.com/article/gazprom-venture-revealed-target-of-uk-anti-suit-injunctions
