Joint Stock Company "Aeroflot Russian Airlines" v Berezovsky & Ors

A jurisdiction or arbitration clause governed by autonomous European rules requires a real consensus, demonstrated clearly and precisely. Awareness of the clause and signature may establish consensus even where the signatory mistakenly believed that the document had received internal legal review.

Under section 9 of the Arbitration Act 1996, the applicant must establish a concluded arbitration agreement. A party asserting that the agreement is null and void, inoperative or incapable of performance bears that burden. A merely arguable case to the contrary is insufficient.

Reliance on an otherwise valid arbitration clause may constitute an abuse of right under Swiss law where it fragments a coherent dispute and creates a risk of conflicting decisions. Claims against connected defendants may nevertheless remain suitable for determination together after jurisdiction over one defendant has been declined.

Aeroflot brought fraud and related claims against individuals and companies in the Forus Group. The applicants challenged the jurisdiction of the English court under the Judgments Regulation, the Lugano Convention and the Civil Procedure Rules. Two defendants relied on Swiss jurisdiction and arbitration clauses in an advisory mandate and credit agreements.

The court had to determine whether the jurisdiction clause was valid and whether the arbitration agreements required a stay. It also had to decide whether the claims against the remaining defendants should proceed in England after jurisdiction over one company was declined.

1. The court declined jurisdiction over EM Finance S.A. because the Lausanne jurisdiction clause in the Advisory Mandate was enforceable. Under the autonomous law applicable to Article 23, the question was whether the parties had reached a genuine consensus, demonstrated clearly and precisely. Aeroflot’s representatives had read and signed the document and were aware of the clause. Their possible mistaken belief that the legal department had reviewed it did not negate consensus.

2. Under section 9(1) of the Arbitration Act 1996, the applicant must establish a concluded arbitration agreement and that the dispute falls within it. Under section 9(4), the party asserting that the agreement is null and void, inoperative or incapable of performance bears the burden. The court must reach a clear conclusion. A merely arguable case that the agreement is valid is insufficient.

3. The court could not fairly determine on written evidence whether the Swiss double-representation rule invalidated the arbitration agreement involving Forus (Cyprus) Limited. That issue depended on disputed evidence concerning Mr Glushkov’s continuing involvement in the Forus companies.

4. However, the court concluded that reliance on the arbitration clause in the Second Credit Agreement would constitute an abuse of right under Swiss law. Its effect would be to remove an arbitrary fragment of a coherent dispute, make the proceedings more difficult and increase the likelihood of conflicting judgments. The application for a statutory stay was therefore refused.

5. The claims against Holding, Cyprus and Finance remained sufficiently connected with the claims against the individual defendants. The court’s declining jurisdiction over Services did not alter that conclusion. The jurisdictional requirements for Holding and Cyprus were satisfied, and Finance remained a proper party.

The applications of Holding, Cyprus and Finance were dismissed.