Bank St Petersburg & Anor v Arkhangelsky & Anor

Disapplication of a foreign limitation period requires an exceptional assessment of whether its application would deprive a claimant of a claim when the claimant lacked a reasonable opportunity to pursue it with reasonable diligence and knowledge of the potential time bar.

The assessment may include difficulties of service, reasonable but mistaken expectations about the means of commencing proceedings, attempts made to bring the claim, and special obstacles affecting the claimant. Mere hardship unconnected with the specific limitation period, a shorter foreign period, or ordinary hardship is insufficient. The jurisdiction must be exercised sparingly.

This supplemental judgment addressed matters arising after the court’s main judgment. The claimants sought permission to appeal the decision under section 2(2) of the FLPA permitting the defendants to bring a counterclaim despite the alleged expiry of a Russian limitation period.

The defendants sought permission to appeal the refusal of relief concerning enforcement of Russian judgments and aspects of the adjournment decision. The court also determined costs for four applications.

1. Counterclaim and foreign limitation period. The court revisited its earlier decision after being referred to Harley & Others v Smith & Anor and Naraji v Shelbourne & Others. It confirmed that the relevant question was whether the foreign limitation period would deprive the claimant of the claim when the claimant lacked a reasonable opportunity to pursue it with reasonable diligence and knowledge of the potential application of the period.
2. Reasonable diligence was assessed by reference to unusual difficulties in bringing the claim, the reasonableness of expectations about an effective method of commencing proceedings, efforts actually made and the reasons for their failure, and special factors making timely proceedings unusually difficult. The court also confirmed that hardship unrelated to lack of time, the mere fact that the foreign period was shorter than the English period, and ordinary hardship did not justify disapplication.
3. Applying those principles, the court maintained its conclusion that undue hardship arose from the difficulties and expense of service in Russia, the defendants’ impecuniosity and exile, their reasonable expectation concerning the exclusive jurisdiction agreement, the limited time available, their attempts to serve proceedings, the claimants’ refusal to accept service, and the overall disproportionality of denying the counterclaim. The counterclaim remained permitted, subject to the exceptions in the main judgment.
4. Permission to appeal that decision was refused. Permission was also refused in relation to the proposed restriction on enforcement of Russian judgments and the trial-management decision. The court considered that requiring further cross-undertakings would achieve indirectly what an anti-suit injunction had refused directly.
5. Costs were ordered individually: the defendants were to pay the costs of the fortification and anti-suit injunction applications; there was no order as to costs for the adjournment application; and costs of the counterclaim application were reserved to the trial judge.

First-instance supplemental judgment addressing applications arising from the court’s main judgment delivered on 14 November 2013. Permission to appeal was refused on the issues considered in this judgment.