Louis Dreyfus Company Suisse S.A. v International Bank of St. Petersburg (Joint-Stock Company)

An anti-suit injunction will ordinarily be granted where foreign proceedings breach a binding arbitration agreement, unless the respondent establishes strong reasons against relief. Forum conveniens and comity generally carry little weight in contractual cases because the court’s primary concern is to uphold the parties’ bargain. Relief should be sought promptly, before the foreign proceedings are too advanced. The injunction may restrain continuation of the foreign claim, enforcement of any resulting judgment, and, where necessary, require withdrawal or termination of the proceedings. Damages may cover legal costs incurred in resisting the foreign claim. Indemnity costs remain subject to objective reasonableness and proportionality.

Louis Dreyfus Company Suisse S.A. sought final anti-suit relief against International Bank of St. Petersburg in relation to a claim introduced into Russian bankruptcy proceedings. The new claim sought payment under commercial transactions, a letter of credit issuance agreement and/or the letter of credit. Those agreements were governed by English law and contained LCIA arbitration agreements.

An interim injunction had previously been granted. The defendant did not appear at the final hearing. The issues were whether the new claim fell within the arbitration agreement, whether final anti-suit and mandatory relief should be granted, whether damages should be awarded for costs incurred in Russia, and what costs order was appropriate.

1. Relief granted. The court granted the declaration, final anti-suit injunction, mandatory injunction, service declaration and damages sought. The defendant was restrained from pursuing the new Russian debt claim, from bringing equivalent claims elsewhere other than by LCIA arbitration, and from enforcing any resulting Russian judgment.
2. Under Senior Courts Act 1981, s 37(1), the court may grant an injunction where it is just and convenient. The authorities establish that the power extends to foreign proceedings brought in breach of an arbitration agreement.
3. At the final hearing the claimant had to prove, on the balance of probabilities, the existence of a binding and applicable arbitration agreement. Once that was established, an injunction would ordinarily follow unless the defendant showed strong reasons against it.
4. The new debt claim fell within the arbitration agreement. Whether its precise contractual basis was the LOC Issuance Agreement or the letter of credit, it was a dispute connected with the contractual obligation to repay the deferred payment amount. The claim was distinct from restitution following invalidation of the discharge agreement.
5. Forum conveniens considerations were irrelevant in a contractual anti-suit case. Comity had little, if any, role, apart from matters such as delay. The claimant had acted promptly, and no strong reason or countervailing discretionary factor was shown.
6. A mandatory injunction requiring withdrawal, discontinuance or termination of the Russian claim was necessary to protect the claimant against an imminent adverse judgment. Relief restraining enforcement of any such judgment was also appropriate.
7. The claimant recovered £20,055.65 in damages for Russian legal costs, with liberty to apply for further losses. Indemnity costs were appropriate in principle, but the claimed £292,066 was excessive. Applying [2021] EWHC 404 (Comm) and the principles reflected in [2013] EWHC 4287 (Comm), the recoverable sum was reduced to £200,000.

First instance decision. No prior appellate decision is stated in the judgment.