Fortenova Grupa D.D. v LLC Shushary Holding & Ors
[2023] EWHC 1165 (Ch)
LLC Eurochem North-West-2 v Société Générale SA & Ors
3 November 2023
[2023] EWHC 2720 (Comm)
High Court
A company sued two banks to get money from bonds. The banks said paying would break sanctions rules. The judge said there wasn't a good legal reason to force the banks to pay the money now, so the company lost.
Key Facts
- •LLC EuroChem North-West-2 (Claimant) seeks payment of EUR 137,159,881.61 from Société Générale (SG) and EUR 75,285,299.85 from ING Bank, pursuant to on-demand bonds.
- •The bonds were procured to support contracts for a fertiliser plant in Russia.
- •Payment was demanded in August 2022 but refused due to international sanctions against Andrey Melnichenko, associated with the EuroChem group.
- •A four-week trial is scheduled for no earlier than January 13, 2025.
- •Defendants argue lack of jurisdiction and that payment would breach sanctions.
- •Claimant bases application on CPR r. 25.1(1)(a), (c), (k), (l), inherent jurisdiction, and CPR r. 3.1(2)(m).
Legal Principles
Interim Payment Order (CPR 25.7)
CPR r. 25.7
Detention, Custody or Preservation of Relevant Property (CPR 25.1(1)(c))
CPR r. 25.1(1)(c)
Order for Payment or Securing of a Specified Fund (CPR 25.1(1)(l))
CPR r. 25.1(1)(l)
Interim Injunction (CPR 25.1(1)(a))
CPR r. 25.1(1)(a)
Inherent Jurisdiction
CPR 25.1(3) and CPR r. 3.1(2)(m)
Ralli Brothers principle
Ralli Brothers v Compania Naviera Sota y Aznar [1920] 2 KB 287
Sanctions
EU and UK sanctions against Andrey Melnichenko
American Cyanamid Principles
Not explicitly stated but referenced in the context of interim injunctions
Outcomes
Application denied.
The court found that none of the CPR rules or its inherent jurisdiction supported the claimant's request for payment into court or a frozen account. The court considered that an interim payment was not justified, the funds were not 'relevant property', and there was no specified fund. Further, an interim injunction wasn't warranted due to the adequacy of damages as a remedy. The potential prejudice to defendants outweighs any benefit to the claimant.
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