Nori Holding Ltd & Ors v Public Joint-Stock Company 'Bank Otkritie Financial Corporation' (Rev 1)

A court will generally grant an anti-suit injunction to restrain foreign proceedings brought in breach of an arbitration agreement unless strong reasons justify refusal. The availability of equivalent relief from an arbitral tribunal is not itself a reason to withhold relief. A broadly worded arbitration clause is not ordinarily limited by the fact that a claim is brought under foreign insolvency legislation or described as an avoidance claim. The court should examine the substance of the dispute rather than its legal label. However, West Tankers Inc v Allianz SpA remains binding EU law: a court cannot restrain proceedings in another EU member state, although relief granted by arbitrators may be recognised and enforced.

The claimants sought a final anti-suit injunction against the defendant bank. The bank had commenced proceedings in Russia and Cyprus seeking to invalidate transactions which replaced secured loans with unsecured bonds and to restore the previous position. The claimants contended that those proceedings breached arbitration clauses in pledge and pledge-termination agreements providing for London arbitration.

The bank argued that the Russian insolvency-related claims were outside the arbitration clauses or non-arbitrable, that an injunction could not restrain proceedings in Cyprus, and that strong reasons and delay justified refusing relief. The central issues were whether the disputes fell within the arbitration agreements, whether they were arbitrable, and what effect EU law had on anti-suit relief.

The application succeeded in relation to the Russian proceedings but failed in relation to the Cypriot proceedings.

1. Relief from the court and tribunal. The court retained jurisdiction to grant anti-suit relief under section 37 of the Senior Courts Act 1981. The fact that the LCIA tribunal could grant equivalent relief did not require the court to refuse a final injunction. The bank had not sought a stay under section 9 of the Arbitration Act 1996 and could not rely on the tribunal’s potential jurisdiction as a reason to resist the application.
2. Scope and arbitrability. The words “any dispute or disagreement arising under, or in connection with” the pledge agreements were wide and unqualified. Following Fulham Football Club (1987) Ltd v Richards, there was no basis for implying an exclusion for claims brought under foreign insolvency law. The presumption adopted in Larsen Oil & Gas Pte Ltd v Petroprod Ltd was not part of English law.
3. The substance of the dispute was whether the transactions were fraudulent and, if so, what relief followed. That factual and legal dispute was capable of determination by arbitrators, despite the foreign statutory labels and the Russian court’s assigned jurisdiction. Arbitration was an alternative method of resolving commercial disputes, not a deprivation of fundamental rights.
4. Cyprus proceedings. West Tankers Inc v Allianz SpA remained authoritative EU law. The Recast Brussels Regulation did not undermine its principle that a court of one member state could not restrain proceedings in another member state. The Cypriot injunction claim was therefore dismissed. Any arbitral anti-suit order or award of indemnity or damages could potentially be recognised under the New York Convention, but the alternative relief was deferred.
5. Strong reasons and delay. The continuation of proceedings against non-parties to the arbitration did not justify refusing relief. Fragmentation was unavoidable, and the arbitration agreement was decisive. There was no material delay sufficient to defeat the claimants’ entitlement.

The bank was ordered to discontinue the Russian proceedings against the claimants and not to commence equivalent proceedings in a non-EU or non-Lugano state. The Cyprus injunction application was dismissed and the indemnity or damages claim was deferred.