Tecnimont SpA & Anor v LLC Eurochem North-West-2 & Anor

Under section 42 of the Arbitration Act 1996, the court may enforce a tribunal’s peremptory order requiring a party to withdraw or stay foreign proceedings brought in breach of an arbitration agreement. Such an order concerns the proper and expeditious conduct of the arbitration because compliance with tribunal orders is itself necessary for that purpose.

The court should generally support, rather than frustrate, the arbitral process. The possibility of foreign civil or criminal sanctions, comity concerns, or imperfect enforcement will not ordinarily outweigh the interests of justice in securing compliance with the tribunal’s orders. Section 42 enforcement is distinct from a freestanding anti-suit injunction under section 37 of the Senior Courts Act 1981.

The claimants were parties to London-seated ICC arbitrations arising from contracts for the construction of a fertiliser plant in Russia. The first defendant commenced or pursued Russian proceedings concerning claims also advanced in the arbitration and sought Russian anti-arbitration and interim measures.

The arbitral tribunal found breaches of the arbitration agreements and made peremptory orders requiring the first defendant to withdraw or stay the Russian proceedings and applications. The first defendant failed to comply. With the tribunal’s permission, the claimants applied under section 42 of the Arbitration Act 1996 for enforcement. The central issues were whether the orders were valid peremptory interim measures, whether section 42 applied to anti-suit relief, and whether discretionary considerations justified refusing enforcement.

1. Application granted. The court ordered the first defendant to comply with the tribunal’s peremptory orders by withdrawing the second Russian action, withdrawing the Russian anti-arbitration applications, withdrawing the Russian interim measures application, and procuring the discharge of any relevant order.
2. The tribunal had power to make the orders. They were interim or conservatory measures under article 28.1 of the ICC Rules and section 39(1) of the Arbitration Act 1996. Their procedural and provisional character was shown by their being made before the final hearing, binding only during the arbitral proceedings, subject to amendment, and not constituting awards. The fact that withdrawal might have permanent effects under Russian procedural law did not alter their interim character.
3. The requirements of section 42 were satisfied. The claimants had permission from the tribunal, had exhausted the available arbitral process, and established that the first defendant had failed to comply within the prescribed time.
4. Section 41(5) was not confined to peremptory “unless” orders. Read with sections 40(1) and 40(2), it extended to failure to comply with any tribunal order where compliance was necessary for the proper and expeditious conduct of the arbitration. Orders restraining litigation of arbitral claims in foreign courts and applications to restrain the arbitration fell within that description.
5. The court’s discretion under section 42 should ordinarily support the tribunal and the proper functioning of the arbitral process. The asserted risk of Russian civil or criminal liability for the defendant’s directors was unsupported by a real evidential risk and, in any event, did not outweigh the interests of enforcing the arbitration agreements and tribunal orders. Nor did possible ineffectiveness or comity concerns justify refusal.
6. The reasoning in AES Ust-Kamenogorsk v Ust-Kamenogorsk JSC concerning a freestanding section 44 application was distinguishable. It was unnecessary to decide whether equivalent relief could also have been granted under section 37 of the Senior Courts Act 1981.

First-instance decision. No appellate history was stated in the judgment.