Bayerische Landesbank & Anor v Ruschemalliance LLC
[2024] EWHC 1822 (Comm)
Barclays Bank PLC v PJSC Sovcombank & Anor
26 March 2024
[2024] EWHC 834 (Comm)
High Court
A bank couldn't pay a Russian company due to sanctions, leading to a lawsuit in Russia. The contract said all disputes should be in England. The English court stopped the Russian lawsuit, saying the Russian case was unfair and that the agreement should be followed, even with sanctions. They also made it easier to notify the Russian company of the decision.
Key Facts
- •Barclays Bank PLC (Claimant) sought anti-suit and anti-enforcement orders against PJSC Sovcombank and LLC Sodeistvie Mezhdunarodnym Raschetam (Defendants), two Russian entities.
- •The dispute arose from a syndicated loan agreement where Barclays, as agent, owed Sovcombank US$139,000 in interest but couldn't pay due to sanctions.
- •The Loan Agreement contained an exclusive jurisdiction clause (Clause 45.1(a)) stipulating English courts' exclusive jurisdiction and a clause stating English courts were the most appropriate forum (Clause 45.1(b)).
- •Sovcombank commenced proceedings in Russia against Barclays, arguing jurisdiction based on Russian law allowing Russian entities to sue in Russia despite foreign sanctions.
- •Sovcombank allegedly assigned its rights under the Loan Agreement to the second defendant (SMR).
Legal Principles
A third party to whom rights are assigned that are derived from a contract containing exclusive jurisdiction and/or arbitration agreements is bound by those clauses.
The Jay Bola [1997] 2 Lloyd's Rep 279 and Royal Bank of Scotland Plc v Highland Financial Partners LP [2012] 2 CLC 109
For a contractually based anti-suit injunction, the court must be highly probable that an exclusive jurisdiction clause exists.
The Angelic Grace [1995] 1 Lloyd's Rep 87
Delay in bringing an application is only relevant to comity if foreign proceedings have substantively engaged with the issues.
The Angelic Grace [1995] 1 Lloyd's Rep 87
An anti-suit injunction can be granted on a non-contractual basis if the English court is the natural forum and the foreign proceedings are vexatious or oppressive.
Not explicitly cited but implied throughout sections 22-27
Service by alternative means can be authorized despite the Hague Service Convention if exceptional circumstances exist, such as a mandatory injunction enforceable by coercive means.
Axis Corporate Capital UK II Ltd v ABSA Group Ltd [2021] EWHC 225 (Comm)
Outcomes
Granted anti-suit and anti-enforcement orders against both defendants.
The court found a strong probability that the Loan Agreement's exclusive jurisdiction clause was valid, despite a potentially contradictory clause (Clause 45.2(c)), which it construed as erroneous.
Granted permission to serve proceedings out of the jurisdiction and by alternative means.
The court found a good arguable case, met the CPR Practice Direction 6B gateways, England was the most appropriate forum, and exceptional circumstances justified alternative service due to the mandatory nature of the injunctions.