VTB Bank PJSC v Mejlumyan

An anti-suit injunction will ordinarily be granted where a claimant establishes a binding and applicable arbitration agreement and the foreign proceedings breach it, unless the defendant shows strong reasons against relief. Delay is assessed in context, including the progress of the foreign proceedings, prejudice, comity, justification and the importance of enforcing the arbitration agreement. Participation in foreign proceedings does not necessarily amount to submission. The question is whether the conduct constituted an unequivocal representation that objection to jurisdiction had been waived. A defence served after a jurisdiction challenge, and to comply with a procedural deadline, will not ordinarily constitute submission. Discretionary objections must be assessed individually and cumulatively.

VTB applied for an anti-suit injunction restraining Mr Mejlumyan from pursuing Armenian proceedings seeking termination of an ACP share pledge agreement. The agreement was governed by Armenian law but provided for LCIA arbitration seated in London.

Mr Mejlumyan relied on excessive delay, submission by VTB to the jurisdiction of the Armenian court, and allegedly unfair or inconsistent conduct. The application had previously been adjourned, and the Armenian proceedings remained at the jurisdiction stage without determination on the merits. The central issue was whether those matters constituted sufficient discretionary reasons to refuse relief despite the arbitration agreement.

1. The injunction was granted. The court was satisfied that there was a binding and applicable arbitration agreement and that the Armenian Termination Proceedings fell within its scope. The ordinary consequence was that the foreign proceedings should be restrained unless strong reasons justified refusing relief: [2002] 1 Lloyd's Rep. 425 (HL).
2. Delay did not justify refusal. Its significance depended on all the circumstances, including the stage reached in the foreign proceedings, prejudice to the defendant, waste of judicial resources, comity, whether the delay was justified, and the importance of enforcing the arbitration clause. The Termination Proceedings remained at an early stage. The jurisdiction challenge had not been decided, there had been limited progress and no material prejudice was shown. The delay therefore did not outweigh the contractual right to arbitration.
3. VTB had not submitted to the Armenian court. The relevant test was whether its conduct was only necessary or useful if objection to jurisdiction had been waived. VTB had served its defence shortly after applying to dismiss the proceedings on jurisdictional grounds. The defence was also required, or at least useful, to comply with the procedural deadline and preserve the ability to defend the merits if the jurisdiction challenge failed. It therefore did not amount to an unequivocal acceptance of jurisdiction.
4. VTB's conduct did not provide a separate discretionary bar. Its evidence did not amount to an unfair presentation. The enforcement steps pre-dated notification of the Termination Proceedings, and the evidence adequately addressed the defence and jurisdiction objection. The separate application by NIC for freezing relief in support of an arbitration was materially different from commencing substantive court proceedings in breach of an arbitration agreement.
5. Viewed individually and cumulatively, the objections disclosed no good reason to permit the breach of the arbitration agreement to continue. The injunction was granted as sought.