Deutsche Bank AG v Ruschemalliance LLC

The English court may restrain foreign proceedings brought in breach of an English-law arbitration agreement, although the arbitration has a foreign seat. England is the proper place for the claim where the court of the seat cannot grant equivalent relief, has no objection in principle to an English injunction and would recognise it.

An anti-suit injunction will usually enforce the parties’ negative contractual promise unless there is good reason to refuse relief. An anti-enforcement injunction may also be granted where discontinuance of the foreign proceedings would not reliably prevent judgment or execution.

A German bank issued an English-law advance payment guarantee to a Russian company. The guarantee required disputes to be resolved by ICC arbitration seated in Paris. After the bank refused a demand on sanctions grounds, the beneficiary commenced Russian proceedings and challenged the arbitration clause.

Bright J dismissed the bank’s without-notice application for anti-suit and anti-enforcement injunctions in [2023] EWHC 2145 (Comm). He considered England an improper forum because France was the arbitral seat and understood French law to object to foreign anti-suit injunctions.

The bank appealed and adduced further evidence that France could not itself grant such an injunction but would recognise an appropriately connected foreign injunction enforcing a contractual dispute-resolution agreement. The central issues were whether England was the proper place for the claim and whether the injunctions should be granted.

1. Appeal allowed. Permission to serve the claim outside the jurisdiction was granted, together with interim anti-suit and anti-enforcement injunctions. Snowden LJ and Falk LJ agreed with Nugee LJ.

2. The power to restrain foreign proceedings brought in breach of an arbitration agreement derives from section 37 of the Senior Courts Act 1981, rather than section 44 of the Arbitration Act 1996. The injunction enforces the negative contractual promise not to pursue foreign litigation, whether or not arbitral proceedings are pending or proposed.

3. Service outside the jurisdiction required a serious issue to be tried, a good arguable case within a jurisdictional gateway and satisfaction that England and Wales was the proper place for the claim. The first two requirements were established. The claim concerned an English-law contract and fell within the contractual gateway.

4. The proper forum is the forum in which the claim can suitably be tried in the interests of all parties and for the ends of justice. English law ordinarily enforces an arbitration agreement’s negative promise by injunction. The new French-law evidence showed that France lacked a domestic procedure for granting anti-suit relief, but did not object in principle to an English injunction enforcing a contractual forum agreement and would recognise such relief where the English court had sufficient connection with the dispute.

5. England was therefore the proper place. The practical choice was between an effective claim in England and no claim at all, rather than between competing forums capable of granting the relief. The Court left open the position if the courts of the foreign seat would regard an English injunction as inappropriate or unwelcome.

6. An anti-suit injunction ordinarily issues unless there is good reason to refuse it. No such reason remained once the mistaken understanding of French law was corrected. An anti-enforcement injunction was also justified because discontinuance of the Russian proceedings required the Russian court’s approval and judgment might otherwise be entered and enforced.

1. Court of Appeal (Civil Division): The court allowed the appeal in [2023] EWCA Civ 1144, granted permission to serve outside the jurisdiction and granted interim anti-suit and anti-enforcement injunctions.

2. Commercial Court: Bright J dismissed the without-notice application in [2023] EWHC 2145 (Comm), holding that England was not the proper forum and that the requested injunctions should not be granted.