The recent decision of the Court of Appeal (the Court) in Deutsche Bank v Ruschemalliance LLC [2023] EWCA Civ 1144 (Deutsche Bank) confirms the strong interest in favour of granting anti-suit relief to hold parties to their arbitration agreements, even where the seat of arbitration is in a jurisdiction that does not itself provide for anti-suit injunctions (ASIs). In this case, anti-suit relief against proceedings issued in Russia was granted in circumstances where the relevant contract contained an agreement to arbitrate disputes in Paris. The Court considered that England was the proper forum for the anti-suit application, and that an anti-suit injunction was appropriate, because French courts do not grant ASIs.
The case is timely as it comes against the backdrop of a number of disputes about forum and choice of law in the wake of the Russian invasion of Ukraine. Agreements have increasingly broken down following implementation of US and European sanctions. There have been a number of consequential disputes over where to litigate – in Russia (as the Russian entity may prefer) or according to the contract’s specified forum. Paris is one of the most popular ‘neutral’ forums for dispute resolution, including in contracts with Russian counterparties. However, if the counterparty insists on litigating elsewhere, and French courts cannot award anti-suit relief, is the applicant essentially left without recourse?
In an earlier decision, G v R [2023] EWHC 2365 (Comm), essentially the opposite conclusion (i.e. no anti-suit relief should be granted) was reached on broadly similar facts. A contract contained an English governing law clause, along with an agreement to arbitrate disputes in Paris by International Chamber of Commerce rules. The fact that an English court, but not French court, could award anti-suit relief, did not mean that England was the only forum where ‘substantial justice could be done’, since the applicant would still, under French law, have the remedy of damages for breach of the arbitration agreement. The court said: “it is said that the English court has its own juridical interests to protect, namely that those who contract should be held to their bargains. That is true but it does not follow that substantial justice cannot be done in the arbitration in France. Were the claimants to seek to enforce their rights by arbitration in Paris, the arbitration tribunal would also seek to enforce the parties’ bargain”.
Deutsche Bank now demonstrates that this is not the position under English law – England may indeed qualify as the proper forum on the basis that it is a jurisdiction that accommodates anti-suit relief where the arbitration agreement is seated in a jurisdiction that does not – in such circumstances, the aim of ensuring substantial justice may mean that England is the proper forum for the very reason that it offers more advantageous relief, even if, at an ‘intuitive’ level, it would seem that this runs against the parties’ choice to seat the arbitration in a jurisdiction that is not so accommodating.
At first instance, Bright J referred to a number of authorities which called for “utmost caution” and that the “court should be very cautious” in granting anti-suit relief in support of a foreign arbitration. Indeed, the case at hand seemed to illustrate why: the applicant was not making an application for anti-suit relief in Paris, the jurisdiction selected in the contract as the seat of arbitration, but in England. “Rather to [the Judge’s] surprise”, the evidence did not even initially explain why the application was being made in England rather than France.
However, once obtained, the evidence showed that it was not possible to obtain an anti-suit injunction in France; the power to order such relief was simply not available under French civil procedure. Not only that, the absence of such remedy was no mere omission, but (in the view of Bright J) reflected a “philosophical objection” to ASIs which were a tool that French law “does not like”. This was critical to the first instance court’s decision to refuse anti-suit relief.
On appeal, the appellant applied to admit certain additional evidence on French law, which emphasised that French law does recognise anti-suit injunctions granted in other jurisdictions provided such relief is: (i) not contrary to international public policy; (ii) issued by a foreign court with sufficient links to the case; and (iii) acquired without fraud. Indeed, in a decision of the Cour de Cassation, the court recognized an injunction granted by a US court in furtherance of a contractual provision stipulating jurisdiction in Georgia. Such evidence suggested that there was not outright hostility towards anti-suit injunctions in France. Accordingly, the Court held that the third ground of appeal was made out (i.e. that the application was not contrary to public policy).
The Court therefore considered afresh whether England was the proper place. The Court agreed that at “first blush” it might be thought that the proper place to deal with a claim for an ASI would be the court of the seat. However, the question of “proper place” invited consideration of the Spiliada principle, that the task of the Court is to “identify the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice”. The Court ruled that the “forum in which the claim for an interim ASI can be suitably tried for the interests of all the parties and fort he ends of justice is the English court, on the simple basis that such a claim cannot be given effect to in France”. In English law, there is a strong interest in seeing parties adhere to the agreements they have struck and a substantial body of authority shows that the English Courts will grant an ASI to enforce an arbitration agreement unless there is good reason not to. The Court therefore granted the interim injunction.
Conclusion
Deutsche Bank confirms that the English Courts will grant anti-suit relief in support of an arbitration abroad, certainly in a case where the seat of the arbitration does not itself provide courts with power to do so themselves. This is a timely decision that settles the law after inconsistent decisions at first instance and moreover, one that provides clarity to a number of similar disputes where forum and the appropriateness of injunctive relief are in doubt against the backdrop of a fractured geopolitical environment.
Nevertheless, the Court of Appeal noted that it was not deciding what might have happened had French law evinced hostility towards ASIs, leaving that question for another day. It is also unclear what decision would follow if the seat of arbitration itself provides for anti-suit relief: on the one hand, an injunction from an English Court may not be contrary to public policy in that jurisdiction, but on the other hand, there might be a case that such relief should be left to the foreign courts to decide (since they have the power to award it). Perhaps, in light of such outstanding questions, the prudent course is to not only select English law as governing the arbitration agreement, but also England as the seat of the arbitration.
