Loudmila Bourlakova & Ors v Oleg Bourlakov & Ors

An anti-suit injunction restraining foreign insolvency proceedings may be granted under section 37 of the Senior Courts Act 1981 where pursuit of those proceedings is unconscionable, including because it is vexatious or oppressive. The jurisdiction is exceptional and must be exercised with caution, having regard to comity and the possible injustice to both parties.

Parallel foreign proceedings are not automatically vexatious. Particular caution is required where the foreign process provides relief unavailable in England, including a foreign insolvency appointment. The court must assess the true nature and purpose of the foreign proceedings, any legitimate advantage to the applicant, the risk of inconsistent decisions, and the balance of justice. The application was refused because the foreign bankruptcy application was not shown to be vexatious or oppressive.

The claimants applied under section 37 of the Senior Courts Act 1981 for an anti-suit injunction restraining the seventh defendant from pursuing bankruptcy proceedings in Russia concerning the estate of the deceased first defendant.

The Russian application relied on an alleged €1.485 billion debt arising from an agreement said to acknowledge a business partnership. The same partnership and agreement featured in the English proceedings, in which England had previously been held to be the natural forum for the wider dispute. The central issue was whether the Russian bankruptcy application was sufficiently vexatious or oppressive to justify restraining it, particularly given the foreign insolvency remedy, the possibility of inconsistent decisions, and the existence of related proceedings in other jurisdictions.

1. Application refused. The claimants failed to establish that the Russian Bankruptcy Application was vexatious or oppressive.
2. Under section 37 of the Senior Courts Act 1981, the court may restrain foreign proceedings where their pursuit amounts to unconscionable conduct. The jurisdiction includes cases involving vexatious or oppressive proceedings, but it is exceptional and must be exercised with caution because of comity.
3. The fact that foreign proceedings concern an issue also raised in England does not itself establish vexation or oppression. Nor is parallel litigation automatically abusive merely because England is the natural forum or because proceedings are inconvenient.
4. Particular caution applies where the foreign proceedings provide relief unavailable in England. The Russian application sought the appointment of a bankruptcy administrator, a class remedy distinct from personal relief for payment of the alleged debt. It was therefore analogous to a single-forum case, even though the underlying debt and partnership issue were relevant to both proceedings.
5. The court considered the possibility of an issue estoppel, the undertaking not to rely on any such estoppel in England, the uncertainty concerning recognition and enforcement in Russia, and the existence of related Florida proceedings. Those matters substantially reduced the risk that the Russian proceedings would disrupt the English proceedings.
6. The alleged debt was difficult to reconcile with the partnership case, but it was not so obviously unarguable or hopeless that the English court should intervene on that basis. The evidence also supported a credible legitimate purpose for seeking a Russian insolvency appointment, and the independence of the proposed administrator reduced the force of concerns about asset control.
7. The court therefore concluded that the claimants had not demonstrated unconscionable conduct. No final or costs order of wider significance was recorded in the supplied judgment.