Bank St Petersburg & Anor v Savelyev & Anor

A court may fortify a cross-undertaking only where the evidence shows a sufficient causal link between the interim order and a realistic prospect of recoverable loss. Large or reputational losses require especially careful and conservative assessment.

An anti-suit injunction may protect the English court’s jurisdiction even without a contractual breach or fraud, but the jurisdiction is exceptional and must be exercised sparingly where foreign proceedings are pending. Contractual jurisdiction clauses are construed from the words used and admissible background, not from subsequent events or unagreed drafts.

Foreign limitation law may be disapplied for undue hardship only in exceptional circumstances. Counterclaims should not ordinarily be excluded interlocutorily where disputed foreign-law issues require trial.

The defendants sought permission to bring a counterclaim, to join two Russian companies, fortification of the claimants’ cross-undertakings supporting freezing orders, and worldwide anti-suit relief restraining enforcement of Russian and BVI judgments.

The applications arose against a background of Russian judgments, related proceedings in several jurisdictions, an English exclusive-jurisdiction agreement, and substantial procedural difficulties faced by the defendants. The court also considered whether the defendants’ proposed claims were time-barred under Russian law, constituted reflective loss, or were otherwise unsustainable.

The defendants later sought an adjournment of the forthcoming trial, relying on the complexity of the issues and their inability to prepare fairly within the existing timetable.

1. Fortification. The evidence did not establish a sufficient causal link between the freezing orders and the alleged loss of a port sale, erosion of value, reputational damage or loss of earnings. The claimed figures were unrealistic, and the application for fortification was dismissed.
2. Anti-suit relief. The court had jurisdiction under Senior Courts Act 1981, section 37, to restrain foreign enforcement where necessary to prevent the English jurisdiction from being negated or rendered nugatory. The jurisdiction was not confined to contractual breach or fraud. Nevertheless, it was exceptional and had to be exercised sparingly. The exclusive-jurisdiction agreement, construed from the December correspondence and admissible background, did not clearly extend to enforcement of the pre-existing Russian judgments. An injunction would improperly interfere with pending Bulgarian and French proceedings. Relief was refused. Enforcement of the recognised BVI costs orders was also not restrained.
3. Counterclaim. Under Limitation Act 1980, section 35, the existing defendants’ counterclaim was treated as commenced with the original proceedings. Claims by a proposed new party were treated as commenced when actually made. The Russian limitation period would ordinarily apply, but the court treated its application as causing undue hardship under section 2 of the Foreign Limitation Periods Act 1984. The proposed claims were therefore allowed to proceed, subject to later determination of standing, liquidation and reflective-loss issues. GOM was not joined, and claims concerning the BVI costs arrangements were excluded as res judicata.
4. Trial timetable. Applying the overriding objective and the balancing exercise identified in Elliott Group Ltd v GEEC UK [2010] EWHC 409 (TCC), the trial was adjourned because a fair trial was not possible on the existing timetable. A trial window was directed as soon as possible after 1 May 2014.

First-instance interlocutory judgment. The judgment records that an earlier Commercial Court striking-out order was under appeal, with permission granted by Lewison LJ, but that appeal was not determined by this judgment.