Bayerische Landesbank & Anor v Ruschemalliance LLC
[2024] EWHC 1822 (Comm)
Unicredit Bank GmbH v Ruschemalliance LLC
2 February 2024
[2024] EWCA Civ 64
Court of Appeal
Two companies had a contract with a clause saying any disputes must go to court in Paris. One company went to court in Russia instead, saying the Paris clause didn't count. The English court ruled that the Paris clause *did* count, and ordered the company to stop the Russia court case.
Key Facts
- •UniCredit Bank GmbH (UniCredit) issued on-demand bonds to RusChemAlliance LLC (RCA) guaranteeing performance under EPC contracts.
- •The bonds contained an arbitration clause specifying English law and ICC arbitration in Paris.
- •RCA, after contract termination, pursued claims under the bonds in the Russian Arbitrazh Court, arguing the arbitration clause was unenforceable under Russian law.
- •UniCredit sought an anti-suit injunction in the English court to restrain the Russian proceedings.
- •The High Court dismissed UniCredit's claim, holding the English court lacked jurisdiction.
- •UniCredit appealed.
Legal Principles
Determining the governing law of an arbitration agreement involves applying English common law conflict of laws principles.
Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38
Generally, a choice of governing law for the main contract will also apply to the arbitration agreement within that contract.
Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38
This general rule can be displaced if the law of the seat indicates that the arbitration agreement is governed by that law, or if there's a serious risk that applying the main contract's law would render the arbitration agreement ineffective.
Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38
The appropriate forum is where a case can be suitably tried for all parties' interests and justice.
Spiliada Maritime Corporation v Cansulex Ltd [1987] 1 AC 460
In determining the proper forum, consider connecting factors and the risk of justice being unobtainable.
Vedanta Resources Plc v Lungowe [2019] UKSC 20
Anti-suit injunctions are granted to prevent breaches of arbitration agreements unless there are strong reasons not to.
Nori Holding Ltd v Public Joint-Stock Company Bank Otkritie Financial Corporation [2018] EWHC 1343 (Comm)
Outcomes
Appeal allowed.
The Court of Appeal held that the arbitration agreement was governed by English law, not French law, and that England was the proper forum to grant an anti-suit injunction. The Russian proceedings were abusive given RCA's simultaneous assertion of Russian court jurisdiction and reliance on the possibility of French arbitration.
Mandatory final injunction granted.
The injunction restrained RCA from pursuing its claims in the Russian court and ordered it to terminate those proceedings. The court found that the risk of RCA obtaining an anti-suit injunction from the Russian court, coupled with the enforceability issues in Russia, meant that substantial justice could not be obtained in France.