Commerzbank AG v RusChemAlliance LLC

An interim anti-suit injunction may be granted to restrain foreign proceedings brought in breach of an arbitration agreement governed by English law where the court has personal jurisdiction over the defendant, the application is prompt, and the agreement and its scope are established with a high degree of probability.

A foreign seat is not, without more, an exceptional circumstance preventing relief. The court must consider whether England and Wales is the proper forum and whether any conflict with the law or courts of the seat makes relief unjust or inconvenient. The injunction is directed to the defendant personally and protects the negative promise not to litigate elsewhere.

Commerzbank issued an on-demand performance bond in favour of RusChemAlliance LLC. The bond was governed by English law and required disputes to be resolved by ICC arbitration seated in Paris.

After Commerzbank declined payment, citing sanctions, RusChem commenced proceedings in Russia seeking payment under the bond. Commerzbank applied without notice for an interim anti-suit injunction under Senior Courts Act 1981, section 37(1), relying on the arbitration agreement.

The central issues were whether the English court had personal jurisdiction, whether England and Wales was the proper forum, and whether the Paris seat or the position under French law constituted exceptional circumstances against granting relief.

1. Relief granted. The court granted an interim anti-suit injunction restraining RusChem from pursuing the Russian proceedings and made an order for alternative service by email.
2. Arbitration agreement. Commerzbank established to a high degree of probability that the bond and arbitration agreement existed, were governed by English law so far as the English court was concerned, and covered the dispute. The Russian proceedings breached the arbitration agreement. The application was made promptly and Commerzbank had not submitted to the Russian jurisdiction.
3. Jurisdiction and forum. The court had personal jurisdiction under CPR 6.36 and 6.37. England and Wales was the proper forum because the bond and arbitration agreement were governed by English law, English law supplied the relevant anti-suit remedy, and neither Russia nor France offered an appropriate alternative remedy.
4. Foreign seat. Under the principles in The Angelic Grace, an injunction will ordinarily be granted where the arbitration agreement is established and no exceptional circumstances exist. A Paris seat was not itself an exceptional circumstance. The court rejected any requirement for mutuality between jurisdiction over the substantive dispute and jurisdiction to grant interim relief.
5. French law. The court accepted Professor Audit’s evidence that French courts lacked jurisdiction to grant the relevant pre-arbitration interim relief and were not fundamentally hostile to anti-suit injunctions. There was therefore no sufficient clash or conflict with French law or the French courts.
6. SQD. Bright J’s decision in SQD v QYP was distinguished. The evidence on French law was materially fuller and different, and the court was not bound by the earlier first-instance findings on foreign law.
7. Statutory basis. The jurisdiction arose under section 37(1) of the Senior Courts Act 1981, not section 44 of the Arbitration Act 1996. The conditions applicable to section 44 were not imported into section 37.

First-instance decision. The judgment records that permission to appeal had been given in SQD v QYP, but this application was determined independently on the evidence before the court.