Riverrock Securities Ltd v International Bank of St Petersburg (Joint Stock Company) (Rev 1)

An English court is an appropriate forum to grant an anti-suit injunction enforcing an arbitration agreement with an English seat; forum conveniens considerations do not ordinarily arise. The court must consider the substance of the foreign claim, rather than its legal label, when deciding whether it falls within the arbitration agreement and is arbitrable. Insolvency avoidance claims may remain arbitrable where the tribunal can grant the relief sought and third-party interests are not directly engaged. The public policy supporting foreign insolvency proceedings does not necessarily outweigh the strong English policy of upholding arbitration agreements. Risk of inconsistent decisions may be relevant, but it is not automatically a strong reason against relief. A negative anti-suit injunction was granted, while mandatory interim relief was refused.

Riverrock Securities Ltd sought an interim anti-suit injunction under section 37 of the Senior Courts Act 1981 to restrain International Bank of St Petersburg, acting through the Deposit Insurance Agency, from pursuing Russian proceedings seeking to invalidate contracts governed by English law and subject to LCIA arbitration seated in London.

The Bank challenged the English court’s jurisdiction under Part 11 and argued that the Russian claims were brought by the insolvency office-holder, fell outside the arbitration agreements, were not arbitrable, and involved strong reasons against injunctive relief. The court also considered expert evidence on Russian law and the application for mandatory interim relief.

1. Part 11 application. The application was dismissed. By choosing London as the seat, the parties submitted to the jurisdiction of the English courts for powers associated with that seat, including anti-suit relief. Forum conveniens principles therefore did not provide a basis for declining jurisdiction. The English court was also better placed to determine the scope and arbitrability of the English-law arbitration agreements.
2. Identity of the claimant. The Article 61.2 claims were strongly arguable as claims of IBSP brought on its behalf by the official receiver. The Russian procedural provisions, the commencement document, the unchallenged evidence, and IBSP’s own conduct supported that conclusion.
3. Scope of the arbitration agreements. The claims fell within the expansive wording of the LCIA clauses. The court adopted a substance-over-form approach. The claims were contractual in substance because IBSP sought to invalidate contracts with its counterparty and recover payments on the basis that the transactions were undervalued or intended to prejudice creditors. The absence of a particular Russian statutory cause of action in an English-seated arbitration did not, by itself, place the dispute outside the arbitration agreement.
4. Arbitrability. The Article 61.2 claims were insolvency claims in substance, but remained arbitrable. The tribunal could grant the relief sought, and the claims did not directly engage third-party rights merely because creditors would benefit from recovery. The public policy of modified universalism did not require a different conclusion. An injunction would not create a competing insolvency or disrupt the single distribution scheme in Russia.
5. Strong reason and discretion. Comity, foreign insolvency policy, inconvenience, and the asserted likelihood that the injunction would be disobeyed did not justify refusing relief. Possible inconsistent decisions were relevant but insufficient. The creditor claims were essentially parasitic on IBSP’s claims, while the interests of other shareholders were less directly connected. The high probability of contractual breach and the undertaking in damages made a negative injunction just and equitable.
6. Orders. The negative anti-suit injunction was granted on the stated undertakings. The application for a mandatory injunction requiring withdrawal or termination of the Russian proceedings was refused because mandatory interim relief is exceptional and the arbitrability issues were not straightforward.