Renaissance Securities (Cyprus) Limited v ILLC Chlodwig Enterprises & Ors

An anti-suit injunction restraining claims against a third party may be granted on a contractual basis only if the arbitration agreement, properly construed, extends to those claims. The starting point is that an arbitration agreement applies between its contracting parties. Clear contractual language is required before it extends to claims by or against non-parties. The court must consider the agreement as a whole, the contract’s context and the background reasonably available when it was made. Claims against a non-party may also be restrained as vexatious or oppressive, but the applicant must establish a clearly more appropriate alternative forum and that an injunction is required in the interests of justice, having regard to comity. Requiring a non-party to arbitrate against its will, particularly in a foreign-seated arbitration, demands caution.

Renaissance held assets belonging to the defendants under investment service agreements containing English governing-law and LCIA arbitration clauses. The defendants commenced proceedings in Russia against Renaissance after the assets were frozen because of sanctions concerns. They later brought or sought to bring related delictual claims against Russian entities within the Renaissance group, claiming sums equivalent to the frozen assets.

Renaissance applied to vary existing anti-suit and anti-anti-suit orders so as to require withdrawal of the claims against those entities. The defendants sought clarification that the existing orders concerned only claims against Renaissance. The issues were whether Renaissance had breached its full and frank or fair presentation duties, whether the arbitration clauses extended to claims against non-parties, and whether the claims were otherwise vexatious or oppressive.

1. Existing orders. The orders made by Dias J and continued by Butcher J and Henshaw J were directed to claims by the defendants against Renaissance. They did not extend, without amendment, to freestanding claims against affiliated entities. Renaissance had not breached its duties of full and frank disclosure or fair presentation, because the relevant relief had not previously been sought.
2. Contractual basis. The court adopted the approach in Clearlake Shipping Pte Limited v Ziang Da Marine Patient E Limited [2019] EWHC 2284 (Comm). Whether an arbitration clause extends to tort claims against a third party is a matter of contractual construction. The agreement must be read as a whole, in its contractual context, and against the background reasonably available when it was made. If the clause extends to the claims, an injunction ordinarily follows unless strong reasons exist.
3. The ISA’s references to disputes between the parties, negotiations between the parties, awards binding between both parties, the defined term “you”, the exclusion of third-party rights and express treatment of third parties elsewhere showed that clause 43.2 applied only to disputes between Renaissance and the relevant defendant. It did not cover claims by either party against a non-party.
4. Greater caution was required in construing an arbitration agreement to compel a non-party to arbitrate against its will, particularly where the arbitration was foreign-seated and the non-party’s access to its own state courts might be excluded. Comity was also especially important where claims were brought by and against parties located in the same foreign jurisdiction.
5. Vexation and oppression. The alternative basis required consideration of whether England was clearly the more appropriate forum and whether an injunction was necessary in the interests of justice, taking comity into account. The claim against the Russian entities had no available alternative arbitral jurisdiction because the arbitration agreements did not bind them, and their consent given after the agreements were made was irrelevant. The alternative ground therefore failed.
6. The applications to interpret the existing orders as covering the claims against the Russian entities, and to extend those orders by amendment, were rejected. Permission to appeal was refused because the proposed appeal had no realistic prospect of success on the arguments advanced. The defendants were successful overall and recovered their costs, subject to a 25 per cent reduction reflecting their unsuccessful challenge based on full and frank disclosure and fair presentation.

First-instance decision. No prior appellate decision is stated in the judgment.