Bayerische Landesbank & Anor v Ruschemalliance LLC

Where foreign proceedings breach an agreement to arbitrate, the court will generally grant an anti-suit injunction unless strong reasons justify refusal. The court may grant relief even though arbitral proceedings are not underway or contemplated. The court determines whether the arbitration agreement is binding and whether the foreign proceedings breach it. The injunction must also be just and convenient.

England may be the proper forum for anti-suit relief where the arbitration is seated abroad, particularly when the foreign seat cannot grant equivalent coercive relief or timely protection. Comity will ordinarily carry little weight in a contractual anti-suit case. Difficulties in enforcing the injunction, or the possibility that the defendant will disobey it, will rarely amount to a strong reason against relief.

The Banks sought final anti-suit and related relief against Ruschemalliance LLC in two substantially identical claims. The claims arose from Russian proceedings brought under bonds which were governed by English law and provided for ICC arbitration in Paris.

Interim anti-suit relief had been granted and continued pending the outcome of related jurisdictional litigation. The Supreme Court had dismissed Ruschemalliance’s jurisdictional appeal in UniCredit Bank GmbH v Ruschemalliance LLC, upholding final relief granted by the Court of Appeal. Ruschemalliance then ceased participating in the English proceedings while continuing the Russian claims and obtaining freezing orders there.

The central issues were jurisdiction, the proper forum, breach of the arbitration agreements, and whether strong reasons or other discretionary considerations made final anti-suit relief inappropriate.

1. Jurisdiction. Any jurisdictional challenge would have been hopeless in light of UniCredit Bank GmbH v Ruschemalliance LLC. The requirements of CPR 6.37(1)–(3) were satisfied. The arbitration agreements fell within PD6B para.3.1(6)(c), as claims concerning contracts governed by English law.
2. Governing law. The bonds’ express English-law clauses extended to the arbitration agreements. The materially identical provisions had been considered in UniCredit, applying Enka v Chubb. References to the Uniform Rules for Demand Guarantees did not displace that conclusion, because the bonds expressly provided otherwise within the meaning of article 34A.
3. Proper forum. England was the proper forum under CPR 6.37(1)(c). The claims sought coercive relief to enforce promises to arbitrate, and an anti-suit injunction was unavailable from the French curial courts. It was abusive for Ruschemalliance to rely on the availability of arbitration in France while pursuing the Russian proceedings on the basis that the arbitration agreements were unenforceable. The existence of an ICC arbitration did not alter the analysis.
4. Merits and discretion. Under section 37 of the Senior Courts Act 1981, where foreign proceedings breach a binding arbitration agreement, an anti-suit injunction will generally be granted unless strong reasons exist to refuse it. The promise to arbitrate included a promise not to litigate. The Russian proceedings and related freezing orders breached, or threatened further breaches of, the agreements.
5. The arguments previously advanced in UniCredit, concerning recognition in France, sanctions, and insufficient English connection, did not constitute strong reasons. Nor did the commencement of arbitration, possible disobedience, enforcement difficulties, comity, or delay. It was just and convenient to grant final anti-suit relief, which was likely to protect the Banks even if Ruschemalliance continued the Russian proceedings.

• Supreme Court: dismissed Ruschemalliance’s jurisdictional appeal in the related UniCredit proceedings on 23 April 2024 and upheld the declarations and final injunctive relief granted below. A written judgment was pending.
• Court of Appeal: granted final anti-suit relief in UniCredit Bank GmbH v Ruschemalliance LLC, [2024] EWCA Civ 64.
• High Court (Commercial Court): interim relief had been granted by Foxton J and continued by consent. The present court lifted the stay and granted final anti-suit relief.