Enka Insaat Ve Sanayi AS v OOO "Insurance Company Chubb" & Ors

An anti-suit injunction is a discretionary remedy founded on the court’s personal jurisdiction over the defendant and the contractual obligation said to have been breached. The fact that an arbitration is seated in England does not give the English court a priori priority to determine the scope or governing law of the arbitration agreement. Those questions may fall primarily to the arbitrators or to a foreign court seized of the dispute. The governing law of an arbitration agreement depends on the construction of the particular contract, read as a whole and in its commercial context. Delay, participation in foreign proceedings, failure to commence arbitration, and the appropriateness of the foreign forum may provide strong reasons to refuse relief. In a large commercial project, fragmentation of proceedings will rarely by itself justify refusing to enforce an arbitration agreement.

Enka sought declarations and an anti-suit injunction against Chubb Russia and related Chubb companies. Chubb Russia had commenced proceedings in the Moscow Arbitrazh Court seeking damages concerning a fire at a Russian power plant. Enka contended that the claim fell within an ICC arbitration agreement in a construction contract providing for London as the place of arbitration.

The contract contained no express general governing-law clause. The parties disputed whether the arbitration agreement and its scope were governed by Russian or English law, whether the Moscow claim was contractual or tortious under Russian law, and which court should determine those questions. Chubb Russia had also applied in Moscow for dismissal of the claim against Enka under Article II(3) of the New York Convention.

1. The claims were dismissed. Chubb Switzerland’s jurisdiction challenge succeeded and the proceedings against it were set aside. The claims against the other defendants also failed.
2. The choice of London as the place of ICC arbitration did not give the English court an a priori superior claim to determine whether the Moscow proceedings breached the arbitration agreement. An anti-suit injunction is an exercise of substantive jurisdiction to restrain breach of contract, dependent on personal jurisdiction and the appropriateness of the forum. The court’s role as the court of the seat under the New York Convention did not alter that analysis.
3. The governing law of the arbitration agreement was a question of contractual construction. The contract had to be read as a whole, in light of the surrounding circumstances and commercial common sense. A choice of seat might, but need not, convey or imply a choice of governing law. The choice of London in an ICC arbitration was not, in the circumstances, a real indication that English law governed the arbitration agreement.
4. The arbitrators had the a priori superior claim to determine the governing law and scope of the arbitration agreement. Their powers under the ICC Rules were distinct from the court’s jurisdiction. Enka’s failure to commence arbitration, despite having ample time to do so, was a significant factor against granting discretionary relief.
5. The appropriate forum for determining the scope of the arbitration agreement was the Moscow Arbitrazh Court. Chubb Russia had acted in good faith on a seriously arguable view that the claim was governed by Russian law and fell outside the arbitration clause. Its procedural advantages in Moscow and the Russian-law issues concerning the characterisation of the claim supported that conclusion.
6. Delay, failure to pursue arbitration and participation in the Moscow proceedings would independently have amounted to strong reason to refuse an injunction. The possible fragmentation or multiplicity of proceedings did not, in the circumstances of a large construction project, provide a sufficient reason against enforcement of the arbitration agreement.

Not an appeal. The judgment followed an expedited trial of Enka’s claim for declaratory and injunctive relief.