Key takeaways
Compliance with an order of an arbitral tribunal acting within its powers
This will always be considered necessary for the proper and expeditious conduct of the arbitration, pursuant to s.40(2)(a) of the Arbitration Act 1996.
Anti-suit relief ordered by a tribunal to restrain foreign court proceedings brought in breach of an arbitration agreement
This is capable of being necessary for the proper and expeditious conduct of an arbitration.
English Court’s powers in support of arbitration
The Court will not hesitate to use the powers available to it to ensure that parties keep to a freely negotiated arbitration agreement.
LLC Eurochem North-West-2 -v- Tecnimont SpA & another [2025] EWCA Civ 5
The Court of Appeal has dismissed an appeal that sought to challenge the English Court’s power under s.42 of the Arbitration Act 1996 (the Act) to enforce peremptory orders of an ICC arbitral tribunal. It held that the Commercial Court judge had been correct in his construction of the relevant provisions of the Act.
For a detailed discussion of the Commercial Court decision, please see: Court orders defaulting party to comply with arbitral tribunal’s peremptory orders.
The Court of Appeal concluded that the interim anti-suit relief ordered by the Tribunal was necessary for the proper and expeditious conduct of the arbitration and the Court was entitled to make an order to enforce the Tribunal’s order.
The decision is in line with the English Court’s established policy of supporting arbitration and not hesitating to seek to restrain foreign court proceedings brought in breach of an agreement to arbitrate.
The background dispute
In brief, LLC EuroChem North-West-2 (NW2), a Russian company, engaged MTR Russia LLC (MTR) and Tecnimont S.p.A (Tecnimont) - the Italian majority owner of MTR – as contractors to build a urea and ammonia fertiliser plant in Russia.
The relevant contracts were governed by English law and provided for any disputes between the parties to be referred to ICC arbitration in London.
MTR and Tecnimont (the Contractors) subsequently contended that they were prevented by EU economic sanctions from performing the contracts and suspended them. NW2 denied the validity of the Contractors’ suspended performance and terminated the contracts.
Arbitration and court proceedings
The Contractors referred the dispute to ICC arbitration. NW2 brought a counterclaim in the arbitration for over Euros 1 billion in damages for breach of contract and repayment of advance payments made in respect of the project. Subsequently, however, NW2 (and its immediate Russian parent company MCC) chose to commence Russian court proceedings, seeking among other things to prevent the Contractors from pursuing the ICC arbitration and also to obtain interim measures against the Contractors’ assets in Russia.
The ICC arbitral tribunal (Tribunal) issued a number of procedural orders which NW2 did not comply with. The Tribunal then issued peremptory orders (POs) which were also not complied with by NW2. One of the POs (PO18) had required NW2 to withdraw the Russian court proceedings against the Contractors which essentially replicated the balance of NW2's counterclaim in the arbitration. PO18 was effectively an interim anti-suit injunction.
The Contractors issued an arbitration claim form and applied to the Court under s.42 of the Act, seeking an order from the Court requiring NW2 to comply with PO18. The Commercial Court granted an anti-suit injunction in the form which the Tribunal had peremptorily ordered, pursuant to s.42. However, it also granted leave to appeal on a limited point identified.
NW2 did not comply with the anti-suit injunction order and applied for a stay of execution. The Contractors opposed the stay application which was subsequently dismissed. On the same day, the Moscow Arbitrazh Court handed down judgment in favour of NW2 against the Contractors awarding damages in the amount of approximately US$ 2.19 billion. Thereafter, NW2 filed a notice of appeal and sought a stay of the anti-suit injunction order pending the appeal. The stay application was refused on the grounds that NW2 had made clear that it would not comply with the anti-suit injunction order.
The Court ordered an expedited hearing of the appeal to be listed on 18 December 2025. On 10 December 2025, the St Petersburg Arbitrazh Court heard and granted NW2’s anti-arbitration applications against the Contractors. The Contractors said that if they failed to comply, they would be exposed to penalties of approximately Euros 860 million.
Ground of appeal
NW2’s sole ground of appeal was that, although it accepted that the Tribunal had power to make the original non-peremptory anti-suit orders, it did not think that the Court had the power to enforce peremptory orders for anti-suit relief under s. 42 of the Act.
It argued that s.42 was confined to orders that were "necessary for the proper and expeditious conduct of the arbitration proceedings" and that interim anti-suit relief did not fulfil this requirement. It submitted that orders under s.41 and s.42 of the Act were concerned with a party's conduct of the arbitral reference, as opposed to the pursuit of different proceedings in a different forum.
The relevant statutory provisions
S.40 of the Act deals with the general duty of the parties and provides:
“(1) The parties shall do all things necessary for the proper and expeditious conduct of the arbitral proceedings.
(2) This includes—
(a) complying without delay with any determination of the tribunal as to procedural or evidential matters, or with any order or directions of the tribunal…”
Section 41 deals with the tribunal’s powers in case of a party's default and provides as follows:
(1) The parties are free to agree on the powers of the tribunal in case of a party's failure to do something necessary for the proper and expeditious conduct of the arbitration.
(2) Unless otherwise agreed by the parties, the following provisions apply.
…
(5) If without showing sufficient cause a party fails to comply with any order or directions of the tribunal, the tribunal may make a peremptory order to the same effect, prescribing such time for compliance with it as the tribunal considers appropriate.
Section 41A deals with emergency arbitrators and provides among other things:
“(2) Unless otherwise agreed by the parties, if without showing sufficient cause a party fails to comply with any order or directions of the emergency arbitrator, the emergency arbitrator may make a peremptory order to the same effect, prescribing such time for compliance with it as the emergency arbitrator considers appropriate.”
Section 42 deals with the enforcement of peremptory orders of tribunal or emergency arbitrator. Among other things, it provides:
“(1) Unless otherwise agreed by the parties, the court may make an order requiring a party to comply with a peremptory order made by the tribunal or (as the case may be) the emergency arbitrator…”
The Court of Appeal decision
NW2's argument depended on establishing each of two propositions:
The tribunal has jurisdiction to make a peremptory order under s. 41(5) only if the failure to comply with a non-peremptory order or directions is a failure to do something which is necessary for the proper and expeditious conduct of the arbitration; and
compliance with orders or directions for anti-suit relief are not capable of being something necessary for the proper and expeditious conduct of the arbitration.
The Court of Appeal rejected both propositions.
As to (1), s. 41(5) was not so qualified but allowed a peremptory order to be made for any failure to comply with an order or directions of the tribunal, whether or not necessary for the proper and expeditious conduct of the arbitration, subject only to the possible qualification that the order or directions must be ones which the tribunal had power to make. In this case, it was common ground that the Tribunal had power under article 28 of the ICC Rules to make the non-peremptory orders in this case.
There was nothing in the wording of s. 41(5) of the Act which restricted the kind of non-peremptory orders or directions which might give rise to peremptory orders. On the contrary the subsection used the wide and unqualified words "any order or directions". The word "any" was of unlimited breadth and prima facie should be taken to mean what it said, subject only to the possible qualification that it be one the tribunal had power to make. It meant, in its colloquial and dictionary sense, "no matter which or what."
If there was any genuine ambiguity, this was resolved by s.41A, which permits an emergency arbitrator to grant such interim and conservatory measures and which does not expressly require these measures to be necessary for the proper and expeditious conduct of the arbitration. As the Contractors had submitted, it would make no commercial sense for the emergency arbitrator to have wider powers, enforceable by the Court, than a duly constituted tribunal.
As to (2), compliance with the non-peremptory orders for anti-suit relief which gave rise to the Tribunal’s peremptory orders, fell within the scope of something "necessary for the proper and expeditious conduct of the arbitration", both because
compliance with an order of the Tribunal acting within its powers was always something necessary for the proper and expeditious conduct of the arbitration as s. 40(2)(a) of the Act made clear; and
in any event, anti-suit relief of the kind granted in this case was capable of being necessary for the proper and expeditious conduct of the arbitration.
In the Court of Appeal’s view, requiring a party to comply with any and all orders of the tribunal which the tribunal had power to make gave effect to the principle of party autonomy, because each party had agreed to confer that power on the tribunal and had agreed that the reference should be governed by the supervisory law of the seat and therefore to the application of s. 40 of the Act.
Furthermore, anti-suit relief was capable of being necessary for the proper and expeditious conduct of the arbitration because it was designed to prevent or remedy anti-arbitration relief being sought or granted in the non-contractual forum. An anti-anti-arbitration measure of this nature was clearly concerned with the proper and expeditious conduct of the arbitration. The judge had made a finding of fact that the anti-suit relief sought in this case was necessary for the proper and expeditious conduct of the arbitration. NW2 had not sought to challenge the finding of fact but had only disputed it as a matter of law, an argument that the Court of Appeal rejected.
In view of these findings, the Court of Appeal did not need to consider whether the Court could have alternatively granted the anti-suit relief sought pursuant to s.37 Senior Courts Act 1981, which deals with the Court’s powers in relation to injunctions.
Comment
This decision is useful for confirming the scope of an arbitral tribunal’s powers to order anti-suit relief and the Court’s powers to enforce such relief.
