Yukos Capital Limited v The Russian Federation

Cause of action estoppel and issue estoppel are distinct. Cause of action estoppel requires an identical cause, including the right or remedy and facts on which it depends; an English immunity claim was not the same cause as Swiss set-aside proceedings. Issue estoppel based on a foreign judgment requires a competent court, a final and conclusive merits decision, identity of parties and identity of issue, subject to necessity and justice. It cannot extend to points that were never pleaded or argued, which may instead engage Henderson v Henderson abuse of process. A foreign judgment cannot have greater preclusive effect in England than at home. Because Swiss law gave no preclusive effect to the judgment’s reasoning, the Swiss decision could not create an English issue estoppel. Issue 1 was answered in the negative and the conditional issue did not arise.

The claimant obtained a Swiss-seated arbitral award against the Russian Federation under the Energy Charter Treaty 1994. It obtained an English recognition and enforcement order under section 101 of the Arbitration Act 1996. The defendant then sought state immunity under section 1(1) of the State Immunity Act 1978 and to set aside the enforcement order.

Waksman J directed three preliminary issues. The parties agreed that the Swiss set-aside judgment satisfied section 31 of the Civil Jurisdiction and Judgments Act 1982, and issue 3 was conditional on success on issue 1. The central question was whether the Swiss judgment created cause of action or issue estoppel preventing the defendant from denying written agreement to arbitrate. The court also determined admissibility of a Swiss-law expert report.

The court answered issue 1 in the negative. Issue 2 was answered affirmatively by agreement, and issue 3 therefore did not arise. The immunity application was not to be dismissed forthwith on the basis of the Swiss judgment.

1. Expert evidence. An omission of formal statements required by Part 35 of the Civil Procedure Rules did not make the expert report inadmissible as a matter of law. Admissibility remained discretionary. The court distinguished R (OAO the Good Law Project) v The Secretary of State for Health [2021] EWHC 2595 (TCC) and R (OAO MQ) v The Secretary of State for the Home Department [2023] EWHC 205 (Admin) because the omissions and procedural settings differed. Oral evidence had been tested in cross-examination, and the report could be corrected. The corrected report was admitted.
2. Cause of action estoppel. The doctrine requires an identical cause of action. The cause comprises the right or remedy and the factual basis on which it depends, as illustrated by Letang v Cooper [1964] 2 All ER 929, Arnold v National Westminster Bank [1991] 2 AC 93 and the other authorities cited. The Swiss proceedings sought to set aside the award under Article 190 of Swiss law, whereas the English proceedings concerned immunity under section 1(1) of the State Immunity Act 1978. The rights and remedies differed, so no cause of action estoppel arose. Hulley Enterprises v The Russian Federation [2025] EWCA Civ 108 concerned issue estoppel only and did not alter that conclusion.
3. Issue estoppel. The requirements for relying on a foreign judgment were a competent foreign court, a final and conclusive merits decision, identity of parties and identity of issue. Caution was required where foreign procedures made the issues difficult to identify. The decision relied on had to be necessary, and the doctrine had to work justice rather than injustice. These principles were drawn from The Good Challenger [2004] 1 Lloyd's Report 67 and Carl Zeiss v Rayner & Keeler Limited (No 2) [1967] 1 AC 853.
4. Scope of any estoppel. If available, issue estoppel could extend only to issues actually determined and necessary to the foreign decision. A ground held inadmissible was determined on that basis; an alternative discussion of its merits did not create a further estoppel. Issue estoppel also could not bar points that could have been, but were not, pleaded or argued. That was the distinct and more flexible field of abuse of process under Henderson v Henderson (1843) 3 Hare 100, which was reserved for trial.
5. Effect of Swiss law. Applying MAD Atelier International BV v Manès [2020] EWHC 1014 (Comm), a foreign judgment could not receive greater preclusive effect in England than in its home jurisdiction. The experts agreed that Swiss res judicata applied only to the operative part of the judgment and that its reasoning had no preclusive effect. The Swiss set-aside judgment therefore could not found an English issue estoppel. Issue 1 was consequently answered in the negative, and issue 3 did not arise.

Not stated in the judgment.