International arbitration: Court of Appeal interprets competing dispute resolution provisions

FH Holding Moscow Ltd -v- AO UniCredit Bank & another [2026] EWCA Civ 468

In this case, the Commercial Court held that Moscow Court proceedings intended to enforce against assets provided as security under a mortgage agreement governed by Russian law did not breach an arbitration provision in the related English law facility agreement: ASI declined in Moscow proceedings | Hill Dickinson.

The Court of Appeal has now upheld that decision and agreed with the Commercial Court that it was not just and convenient to grant an anti-suit injunction (ASI) in respect of the Moscow Court proceedings.

In doing so, the Court of Appeal highlighted that it had been required to apply English law principles to decide an issue that depended on interpreting a Russian law contract including a Russian law jurisdiction clause and an arbitration agreement governed by Austrian law.

In the Court of Appeal’s view, the Moscow Court was better placed to construe the mortgage agreement and its jurisdiction clause according to Russian law. The Court of Appeal also seemed unconvinced that the English Court should grant a remedy as serious as an ASI in relation to an Austrian law arbitration agreement merely because the underlying facility agreement was governed by English law.

The background facts

The underlying dispute arose out of a facility agreement entered into between FH Moscow Holding Ltd (FHM), a company operating in Russia, was borrower and UniCredit SpA (SPA), an Italian bank, and AO UniCredit Bank (AO), a Russian bank, as lenders (Facility Agreement). SPA was AO’s parent company. The Facility Agreement provided for a Euro facility lent by SPA and a rouble facility lent by AO.

The Facility Agreement was governed by English law and provided for disputes to be resolved under the Rules of Arbitration (Vienna Rules) of the Vienna International Arbitral Centre (VIAC) of the Austrian Federal Economic Chamber. The arbitration seat was Vienna, Austria.

In a related mortgage agreement (Mortgage Agreement) between FHM as mortgagor and AO as mortgagee, FHM provided real estate assets based in or around Moscow as security for the loans provided under the facilities in the Facility Agreement. The Mortgage Agreement was governed by Russian law and provided for disputes to be resolved in the Commercial Court of Moscow.

Following the Russian invasion of Ukraine in 2022 and international sanctions against Russia, Russia implemented countersanctions. As a result, FHM alleged it became illegal for it to pay the Euro debt to SPA. The parties disagreed on whether there was an Event of Default under the Facility Agreement.

In March 2025, AO filed a claim in the Arbitrazh Court of the Moscow Region (Moscow Court) seeking foreclosure of the secured assets. The claim was that FHM had failed to make a payment, so that an Event of Default under the Facility Agreement had occurred, entitling AO to enforce its security.

FHM applied to challenge the jurisdiction of the Moscow Court, arguing that the issue whether there had been an Event of Default was subject to VIAC arbitration. However, no arbitration proceedings were commenced by either party.

Subsequently, FHM joined SPA to the Moscow proceedings as a third party whose interests might be affected by the court judgment. SPA itself has made no claim in the Moscow Court proceedings, but FHM contended that in commencing those proceedings, AO was acting in accordance with directions given by its parent company, SPA, and that this amounted to a breach of the arbitration clause in the Facility Agreement by SPA as well as by AO.

FHM subsequently applied to the English Court for an ASI against both banks on the basis that there had been a breach of the arbitration agreement, further or alternatively that the Moscow Court proceedings were vexatious and oppressive.

The Commercial Court decision

The Court dismissed the application for an ASI. It was not persuaded that there was a high degree of probability that the Moscow Court proceedings breached the arbitration agreement in the Facility Agreement. It was also inappropriate for the ASI to be granted on the basis that the Moscow Court proceedings were vexatious and oppressive.

The Court also granted SPA summary judgment because it was not a party to the Moscow Court proceedings and had no independent claims in those proceedings. The Court further found that it had no jurisdiction over AO, among other things because the arbitration agreement was governed by Austrian law.

FHM appealed on the breach of arbitration agreement issue. Before the appeal was heard, the Moscow Court found in favour of AO that it was not obliged to obtain a VIAC arbitration award in its favour before it could enforce against FHM’s assets under the Mortgage Agreement. However, it dismissed AO’s claim on a technical basis. Nonetheless, this did not make the English appeal academic because AO had the option to appeal that decision or to commence new enforcement proceedings under the Mortgage Agreement. FHM also appealed on the jurisdiction issues.

The Court of Appeal decision

The Court of Appeal dismissed the appeal.

The question whether the Moscow Court proceedings were brought in breach of the arbitration clause in the Facility Agreement was potentially decisive. If there was no breach, the claim for an ASI failed.

The Court stated that, as a matter of language, a dispute about whether there had been an Event of Default was capable of falling within both the arbitration clause in the Facility Agreement and the jurisdiction clause in the Mortgage Agreement. These could, therefore, be regarded as competing dispute resolution clauses.

In such cases, the starting presumption was that competing jurisdiction clauses were to be interpreted on the basis that each dealt exclusively with its own subject matter and they were not overlapping. However, the language and surrounding circumstances might make it clear that a dispute fell within the ambit of both clauses. In that event, the result might be that either clause could apply, rather than one clause to the exclusion of the other.

The Commercial Court judge had rightly interpreted the two competing dispute resolution clauses in the context of the Facility and Mortgage Agreements and in light of the transaction as a whole. He had decided that the dispute about whether an Event of Default had occurred fell within the scope of the Mortgage Agreement jurisdiction clause, as well as the Facility Agreement arbitration agreement.

The fact that the Mortgage Agreement imported definitions and terms from the Facility Agreement did not undermine that point: rather, it was consistent with the view that some disputes under the Facility Agreement might also be disputes under the Mortgage Agreement. The judge did not think it could be said that the dispute fell more naturally within the Facility Agreement arbitration agreement than the Mortgage Agreement jurisdiction clause. The Mortgage Agreement operated in a specific subset of circumstances where there was a dispute over an alleged Event of Default. He concluded that it was not highly probable that the Moscow court proceedings breached the arbitration agreement.

The Court of Appeal agreed with this analysis. It also highlighted that the Moscow Court had already interpreted the Mortgage Agreement under Russian law and found in favour of AO on the issue. It was inappropriate for the English Court to decide that the Moscow Court was wrong, as FHM expected it to do.

The Court of Appeal acknowledged that there might have to be Moscow Court proceedings as well as arbitration in Vienna, but fragmented proceedings were unavoidable.

The Court of Appeal also referred to FHM’s argument that the English Court did have jurisdiction over AO in this case because the claim for the ASI was “in respect of” the English law Facility Agreement, even if the arbitration agreement was governed by Austrian law.

The Court of Appeal did not need to decide the point and chose not to do so. However, it did state that the words 'in respect of' have generally been regarded as extremely wide words for the purpose of establishing a sufficient connection to the jurisdiction, and there appeared to be no reason in principle why a claim could not be 'in respect of' more than one contract. However, the result in a case such as this one would be the English Court having jurisdiction where the real connection with this jurisdiction was minimal.

Comment

The Court of Appeal seemed very conscious of the fact that the issues in this case did not have anything to do with English law or the English Court. Whether AO was entitled to levy execution without first obtaining an award in Vienna was an issue for the Moscow Court to determine. It was an issue which depended on interpreting what the Mortgage Agreement provided regarding the circumstances in which the security might be enforced and about the jurisdiction of the Moscow Court, both of which were matters of Russian law.

The dispute highlights the importance of drafting dispute resolution provisions with the utmost precision and understanding the interplay of dispute resolution provisions across related contracts, particularly where there may be potentially competing provisions in a series of related contracts.

For advice on international arbitration and complex cross border dispute resolution, explore our International Arbitration practice and see how our team supports businesses and financial institutions in navigating overlapping jurisdiction clauses, sanctions related risks and multi forum disputes with confidence.