In its recent judgment in
Background
RCA is a Russian entity which had entered into engineering, procurement and construction contracts with two German companies (
Following
RCA issued proceedings before the Russian arbitrazh (commercial) courts. It claimed that EU sanctions were contrary to public policy, and that the arbitration agreements were unenforceable, therefore requiring
In parallel, the Russian judge presiding over the Russian proceedings initially held that pursuant to the Arbitration Procedural Code of the
Decision of the Commercial Court
At first instance, the English Commercial Court held that it did not have jurisdiction to grant an anti-suit injunction to prevent proceedings from moving forward in
In particular, the Commercial Court acknowledged that the general rule of Enka v. Chubb2 would require that where the law applicable to the arbitration agreement is not specified, the governing law of the contract should apply (in this case, English law) - but this was displaced by a specific provision of the seat of the arbitration (French law). Specifically, French arbitration law determines that the law of the seat of the arbitration (
Alternatively, even if English law governed the arbitration clause, the judge considered whether
The Court of Appeal reversed the Commercial Court's decision and granted the anti-suit injunction in favour of
1. Jurisdiction of the court
The Court of Appeal noted that RCA was not domiciled in
- There is a serious issue to be tried on the merits.
- There is a good arguable case that the claim falls within one of the relevant gateways.
England andWales is "the proper place in which to bring the claim".3
The Court of Appeal found the first limb to be satisfied. For limbs 2 and 3,
2. Governing law of the arbitration agreement
The Court of Appeal considered that the applicable rule to determine the governing law of the arbitration agreement had been set in Enka v. Chubb, but it disagreed with the Commercial Court on the application of the exception related to a French-seated arbitration.
The Court of Appeal held that in order to displace the general rule in Enka, it would require a "sufficiently clear rule of the law of the seat". The provision relied upon in this instance was a principle derived from case law stating that the governing law of the arbitration agreement "depends on the parties' common intention". The Court of Appeal considered this not to be sufficient to satisfy this requirement. Furthermore, the
The Court of Appeal acknowledged that in the upcoming reform to the Arbitration Act, the law will codify the principle that unless otherwise expressly agreed, the law of the seat of the arbitration shall govern the arbitration agreement (and not, as in this case and Enka, the governing law of the underlying contract). However, it concluded that the general principle in Enka still prevails until the bill is passed into law - and therefore should be followed.
3. Appropriate forum to bring the claim
The Court of Appeal then considered whether
The Court of Appeal finally proceeded to state that the English court is the "only court available and able" to grant an anti-suit injunction since this is not possible in
4. Anti-suit injunctions in foreign-seated arbitrations
The Court of Appeal issued a final anti-suit injunction, given that the governing law of the underlying contract and the arbitration clause was English law. In doing so, it applied the principle derived from section 44 of the Arbitration Act 1996, a section which usually covers interim injunctions. The Court of Appeal agreed that whilst anti-suit injunctions arise from section 37 of the Senior Courts Act 1981, it saw no reason for these principles not to be applicable here. The Court of Appeal further considered that "the fact that the contract, including the agreement to arbitrate, is governed by English law, together with the policy of English law that those who agree to arbitrate should adhere to their bargain provides [the English courts with] a sufficient interest or connection in this case".
The Court of Appeal thereafter decided that the proceedings in the Russian arbitrazh court had been brought in breach of the arbitration agreements, and therefore it was just for a final anti-suit injunction to be granted, ultimately requiring the Russian proceedings to be terminated.
Key takeaway
The judgment confirms that English courts may be willing to grant anti-suit injunctions in support of foreign-seated arbitrations if they have personal jurisdiction over the parties and English law governs the arbitration clause. Therefore, the question of which law governs the arbitration agreement also will be relevant in connection with the issuance of anti-suit injunctions in support of arbitrations by English courts.
As it stands, absent the parties' inclusion of the governing law of the arbitration clause, the rule of Enka mandates that the applicable law is that of the governing law of the agreement. However, once reforms to the Arbitration Act are adopted by
Footnotes
1. [2024] EWCA Civ 64.
2.
3.
4. [2023] EWCA Civ 1144.
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