FH Holding Moscow Limited v AO Unicredit Bank & Anor

An anti-suit injunction will be granted to restrain foreign proceedings only where the contractual or non-contractual basis for relief is established and the injunction is just and convenient.

Where related contracts contain potentially competing dispute-resolution clauses, they must be interpreted together and commercially. A clause governing security enforcement may permit the foreign court to determine whether an event of default has occurred, even though the underlying facility agreement contains an arbitration clause.

Non-contractual relief requires particular caution because of comity. The English court must have a sufficient interest or connection with the dispute. An English governing law clause and an English branch of one party may be insufficient where the proceedings concern foreign property, a foreign-law security agreement and a foreign jurisdiction clause.

FH Holding Moscow Limited sought an anti-suit injunction under Senior Courts Act 1981, section 37, restraining AO Unicredit Bank and Unicredit S.p.A. from pursuing Russian foreclosure proceedings concerning Russian real property.

The facility agreement was governed by English law and contained a VIAC arbitration clause. The related mortgage agreement was governed by Russian law and required disputes to be brought before the Commercial Court of Moscow. The claimant alleged that the Russian proceedings raised disputes reserved to arbitration and were vexatious or oppressive because of sanctions risks.

AO challenged the English court’s jurisdiction. SPA sought summary judgment. The central issues were whether the Russian proceedings breached the arbitration agreement, whether non-contractual relief was justified, and whether the English court had jurisdiction over either defendant.

1. Anti-suit injunction on contractual grounds. Related agreements forming part of one transaction had to be interpreted together. The Facility Agreement and Mortgage Agreement showed that disputes about whether an Event of Default had occurred, and the amount due, could arise under both agreements. Clauses 9.1.1 to 9.1.3 of the Mortgage Agreement contemplated immediate judicial enforcement after an Event of Default, with disputes resolved in the Moscow proceedings under clause 21. The arbitration agreement was therefore not rendered substantially nugatory, since other disputes under the facilities could still be arbitrated. The claimant had not shown the required high probability or high degree of assurance that the Moscow proceedings breached the arbitration agreement.
2. Vexation and oppression. Relief on this non-contractual basis required great caution because of comity and a sufficient English interest in the matter. The dispute concerned Russian foreclosure proceedings, Russian property, a Russian-law mortgage and a Russian jurisdiction clause. The English connections were limited to the English governing law of the Facility Agreement and SPA’s English branch. Those links were insufficient. The possible future sanctions risks and the claimant’s commercial difficulties did not justify interference with the Russian proceedings.
3. Claim against SPA. SPA was only a third party in the Russian proceedings. AO, as Security Agent, had its own direct claim and was contractually entitled to conduct the enforcement. There was no sufficient basis for an injunction against SPA, and summary judgment was granted.
4. Jurisdiction over AO. The necessary and proper party gateway failed because there was no real issue between the claimant and SPA which it was reasonable for the English court to try. The claim for an anti-suit injunction was founded on the arbitration agreement, whose governing law was accepted to be Austrian law. The separability principle prevented reliance on the English governing law of the Facility Agreement to establish jurisdiction under the contract gateway.
5. The anti-suit injunction was refused, SPA obtained summary judgment, and AO’s jurisdiction challenge succeeded. Permission to serve out was set aside.