VTB Bank (PJSC) v Mejlumyan

An anti-suit injunction in support of arbitration is discretionary. Where the court is satisfied, on the interlocutory material, that there is a high degree of probability of a binding and applicable arbitration agreement, foreign proceedings brought in breach of it should ordinarily be restrained unless strong reasons justify refusal. The court must consider the full factual matrix fairly, including delay and submission to the foreign jurisdiction. A defendant’s serious illness may justify adjournment where it has materially impaired the defendant’s ability to give instructions. Pending the substantive hearing, the court may grant carefully tailored temporary relief to preserve the position, provided that the procedure is not used to evade the duty of full and frank disclosure applicable to anti-suit applications.

VTB Bank sought an anti-suit injunction restraining Mr Mejlumyan from pursuing termination proceedings in Armenia. VTB relied on an arbitration clause in a share pledge agreement providing for LCIA arbitration seated in London. Mr Mejlumyan applied to adjourn the inter partes hearing because Covid-19-related illness had impaired his ability to participate and instruct his lawyers, and because further evidence, including evidence of Armenian law, was required.

The court had to decide whether to proceed on the merits, adjourn the hearing, and, if adjourned, grant temporary relief to hold the ring pending the restored hearing.

1. Adjournment. The application to adjourn was granted. Although there was some force in VTB’s criticism of the timing of the application and the proposed expert evidence, the credible medical evidence showed that Mr Mejlumyan’s illness had impeded his ability to give effective instructions. It would therefore be unfair to proceed on the merits without allowing further time.
2. Arbitration agreement. For present purposes, it was not disputed that the termination proceedings fell within the arbitration clause in the ACP pledge. The court therefore proceeded on the basis that there was a binding and applicable arbitration agreement and that the Armenian proceedings had been brought in breach of it.
3. Temporary relief. Anti-suit relief is discretionary. The court adopted the principles stated in Emmott v Michael Wilson & Partners [2018] 1 Lloyd’s Rep. 299 and Donohue v Armco Inc [2002] 1 Lloyd’s Rep. 425. The ordinary approach is to restrain proceedings brought in breach of an applicable arbitration agreement unless strong reasons exist not to do so, but there are no inflexible rules governing the discretion.
4. The court accepted the importance of placing the full factual position fairly before the court, whether an anti-suit application is made inter partes or effectively without notice. A claimant must not evade the duty of full and frank disclosure by seeking temporary relief at an adjourned hearing. That concern did not arise here. The court had power to make an order effectively on a without-notice basis, tailored to preserve the position and protecting Mr Mejlumyan’s ability to appeal any adverse Armenian jurisdiction decision.
5. The proper course was therefore to adjourn the substantive anti-suit hearing and grant temporary relief to hold the ring, with the inter partes hearing to take place as soon as reasonably possible after 12 April 2021. Issues of delay and submission to the Armenian jurisdiction were left open for that hearing.

This was a first-instance decision. Earlier procedural directions in the same proceedings were made by Foxton J on 22 February and 17 March 2021. The substantive inter partes anti-suit injunction hearing was adjourned.