C v RHL

Where related commercial disputes generate arbitration, foreign proceedings and satellite litigation, the court may direct the parties to undertake urgent mediation before substantial further costs are incurred. The mediation process should be structured by an ADR order, require attendance by authorised decision-makers, and proceed without causing undue delay to existing proceedings. Pending mediation, the parties should preserve the status quo and refrain from commencing further proceedings or taking steps in existing proceedings which prejudice either side.

C sought an anti-suit injunction restraining RHL and entities under its control from pursuing proceedings in the Moscow Arbitrazhnye Court or commencing related proceedings concerning transactions under a Share Purchase Agreement. The SPA contained an ICC arbitration clause providing for London arbitration, and C had commenced arbitration proceedings claiming damages for repudiation.

RHL challenged the court’s jurisdiction and the substance of the injunction claim. Existing Russian proceedings had been adjourned, and C had also notified the ICC tribunal that it would seek similar injunctive relief there. The issue before the court was the appropriate future conduct of the interrelated disputes pending determination of the substantive claims.

1. Disposition. The court directed that the parties’ disputes be referred urgently to mediation before further substantial costs were incurred in the anti-suit application, the arbitration or related satellite litigation.
2. The disputes were particularly suitable for mediation because their commercial and procedural complexity created scope for a solution beyond the remedial powers of the court or the ICC tribunal. Mediation was considered capable of addressing the wider relationship between the parties and their associated entities.
3. The parties were to have 28 days to appoint a mediator or panel and conclude mediation meetings, with a target completion date of 27 May 2005. An ADR order was to require selection of the neutral or neutrals, attendance by the parties and their fully authorised decision-makers, and production of evidence required by the mediator.
4. The mediation timetable was not to create undue delay to the arbitration or materially interfere with the adjourned Russian proceedings. Pending the outcome, the parties were required to preserve the status quo: neither was to procure further proceedings, and each was to take steps to ensure that nothing in existing proceedings prejudiced the other.