Key takeaways
Court of Appeal narrows anti-suit injunction scope
Decision clarifies when English courts can limit foreign proceedings.
Balancing international comity with contractual rights
Courts balance respect for foreign jurisdictions with enforcing English law.
Precise jurisdiction clauses reduce litigation risk
Clear drafting helps avoid costly cross-border disputes.
UniCredit Bank GmbH -v- RusChemAlliance LLC [2025] EWCA Civ 99
This decision confirms that the English Court has an inherent jurisdiction to vary or revoke a final order for an anti-suit injunction (ASI).
In this case, the final ASI order had been granted by the Court of Appeal against a Russian corporation that had commenced proceedings in the Russian Arbitrazh Court of St Petersburg and Leningrad Region (St Petersburg Court) in breach of arbitration provisions in the relevant contracts.
The Supreme Court upheld the order granting the ASI. In an interesting twist, the applicant subsequently argued that the Court of Appeal’s order should be revoked due to a change of circumstances. Among other things, the applicant argued that following a ruling obtained by the respondent in Russia, the St Petersburg Court might impose substantial penalties on it if the Court of Appeal’s order remained in place.
The Court of Appeal varied the order so as to revoke the injunctive parts of it, leaving the declaratory parts as to the jurisdiction of the English Court, which formed the subject of the Supreme Court’s decision.
This decision deals with important points of principle and it is particularly noteworthy because there are a number of other similar cases where equivalent applications have been made. It illustrates the way in which, increasingly, Russian litigants are resorting to the Russian Arbitrazh courts notwithstanding foreign court jurisdiction and/or arbitration provisions in their contracts.
The background facts
UniCredit Bank GmbH (Unicredit), a German bank, and RusChemAlliance LLC (RCA), a Russian corporation, were parties to a number of performance bonds governed by English law and providing for arbitration in Paris. The bonds had been provided by UniCredit to RCA to guarantee the performance of contractors who had entered into underlying agreements with RCA for the construction of power plants in Russia.
Following the invasion of Ukraine, the German contractors contended that they could not continue to perform the contracts because of EU sanctions against Russia. When RCA made its demands under the bonds, UniCredit also maintained that it could not pay out under the bonds due to sanctions.
RCA commenced proceedings in the St Petersburg Court, pursuing their claims under the bonds. UniCredit obtained a without notice interim injunction from the English Court to restrain the Russian proceedings. This was eventually upheld on appeal to the Court of Appeal, who issued a final ASI. The Supreme Court subsequently upheld the final ASI and found that only the English Court had jurisdiction over the bond claims.
Following the Supreme Court decision, RCA obtained a ruling from the St Petersburg Court which:
Prohibited UniCredit from initiating arbitrations or court proceedings against RCA in respect of the bonds other than in the Russian courts;
Prohibited UniCredit from continuing any proceedings, or enforcing any judgments, in respect of the bonds except in the Russian courts;
Obliged UniCredit to take all measures within its control to cancel the effect of the Court of Appeal’s order within two weeks of the Russian court ruling; and
Threatened to impose a penalty on UniCredit of Euros 250 million, payable to RCA, if UniCredit did not comply with the ruling.
The St Petersburg Court ruling is under appeal but has assumed legal force in Russia.
The application
UniCredit sought to vary or revoke the Court of Appeal’s order on the grounds of change of circumstances, namely:
RCA’s refusal to respect the Court of Appeal order; and
Unprecedented changes in Russian law that led to the ruling.
UniCredit submitted that contempt proceedings against RCA were unlikely to have any practical effect because RCA had no assets outside Russia and its officers did not travel outside Russia. Furthermore, even if the Court refused UniCredit’s application, there was a possibility that the St Petersburg Court would decide that UniCredit had not pursued the application sufficiently vigorously and it might impose substantial financial penalties on UniCredit if the Court of Appeal order remained in place.
The application was heard in open court because it raised important questions as to whether the Court had power to revoke a final injunction and whether it should do so in circumstances where the penalty might be imposed by the St Petersburg Court appeared to be contrary to Russia’s obligations under the New York Convention.
Furthermore, there were connected proceedings. RCA had obtained similar anti-suit relief against other German banks in parallel proceedings concerning substantially similar bonds. Both those banks had obtained anti-suit injunctions from the English Court in similar terms to the Court of Appeal order. Therefore, the outcome of this application was relevant to those ongoing proceedings.
The relevant powers
In brief, the English Civil Procedure Rules (CPR) provide as follows:
Under CPR 3.1 (Court’s general powers of management), the Court has the power to vary or revoke a court order;
Under CPR 52.30 (reopening final determinations), it will only reopen a final determination in exceptional circumstances and in order to avoid real injustice and there is no effective alternative remedy;
Under CPR 38.2 (discontinuance of claims), a claimant must obtain the Court’s permission if it wishes to discontinue all or part of a claim in respect of which the Court has granted an interim injunction or in respect of which the claimant has given an undertaking.
The Court of Appeal decision
Firstly, the Court of Appeal found that there was a risk that, if it did not accede to UniCredit’s application, the St Petersburg Court would impose the financial penalty on UniCredit. It could not be predicted what view the Ste Petersburg Court would take as to whether UniCredit had taken all measures within its control to have the Court of Appeal order revoked.
Secondly, on the authorities and because of the unusual nature of a final ASI, there was a power to vary or revoke a final ASI in an appropriate case. Among other things, if final ASIs could not be discharged at all, it would create commercial uncertainty and confusion. The parties to this kind of litigation would not expect to be required to keep an ASI in place even after the jurisdictional dispute, or the litigation itself had been otherwise resolved.
Thirdly, while in one sense UniCredit had been coerced into making the application (which RCA supported), that was not a weighty factor to take into consideration in the unusual circumstances of this case.
Fourthly, while there were some public policy reasons for not acceding to the application, these were not sufficiently strong to militate against granting the application. Among other things, the Court would not be breaching sanctions by allowing the application. Furthermore, the Russian court ruling was not made against the English courts and did not operate against the English courts. It was an in personam order made against UniCredit. Finally, the fact that Russian laws appeared to conflict with English law in this matter was not a sufficiently strong public policy reason to refuse the application, which was in UniCredit’s commercial interests.
The Court decided to vary, not discharge, the Court of Appeal’s order by discharging the injunctive parts and retaining the declaratory parts which related to the English Court’s jurisdiction over the dispute.
Comment
The decision highlights that obtaining an ASI, whether interim or final, in an attempt to restrain foreign court proceedings brought in breach of an arbitration agreement does not necessarily mean that either the respondent or the foreign court will respect the ASI. Similarly, the threat of contempt proceedings may not always work. The ASI remains a useful tool but may not provide a complete solution particularly where sanctions and public policy in different jurisdictions come into play.
