The Supreme Court (SC) has laid to rest the issue of whether it is possible for the English court to grant anti-suit injunctions (ASIs) in support of foreign seated arbitrations. 

In UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, the SC upheld the Court of Appeal’s (CoA) decision, on which we have previously commented, confirming that ASIs are available to support foreign arbitrations. The SC’s decision was announced in April this year, but the judgment has only recently been published. 

The SC’s decision

The SC was asked to decide whether the arbitration agreement between UniCredit and RCA was governed by French or English law, and whether the English courts are the proper place for UniCredit’s claim for an ASI against RCA. 

The SC upheld the CoA’s decision. 

1. Governing law 

The question of whether the parties have agreed on a choice of law to govern an arbitration agreement is determined by reference to both the arbitration agreement and the contract containing it as a whole. It is determined by applying English law on contractual interpretation, given that England is the forum in which the application for an ASI has been made. 

Applying Enka, the SC concluded that the parties had chosen English law to govern the arbitration agreement. The arbitration agreement was a clause in a contract governed by English law. There was nothing in the contract to indicate that the arbitration agreement was exempted from that choice. The choice of a different country for the seat of the arbitration does not (without more) justify a departure from the presumption that it is therefore governed by English law. 

The SC also addressed its previous statement in Enka that where the law of the seat would treat the arbitration agreement as also governed by that country’s law, this may negate the presumption that the law of contract governs the arbitration agreement⁴. In Unicredit, Lord Leggatt emphasised that this was permissive only (“may” negate, not “will” negate) and that parties should be careful to understand the underlying reasoning behind it (and indeed behind all judicial statements). He further considered that this factor – that an intention that the arbitration agreement should be governed by the law that a court of the seat would regard as the governing law - would not be a reasonable intention to attribute to the contracting parties unless there are express words to that effect. The SC therefore indicated that in future this particular factor in Enka should be disregarded.  

    2. Forum 

To answer the question whether England was the proper place to bring the claim for an ASI, both parties had submitted arguments on the assumption that the forum non conveniens test as set out in Spiliada⁵ applies. 

However, the SC found that this is not correct. The Spiliada principle applies to determining whether England is the appropriate forum for the trial of the case. But in this instance (a) neither party’s position was that England is the appropriate forum for trial of the substantive dispute; and (b) the parties have contractually agreed to refer the dispute to arbitration. The English court is therefore not concerned with whether England is the forum conveniens but only with whether to enforce the parties’ agreement. 

Thus the question is not whether the English court is the most suitable forum – indeed, that would wrongly presuppose that there can be only one suitable forum to prevent a party from breaking its contract - it is simply whether the intervention of the English court is consistent with comity. That requires the English court to have a sufficient interest in, or connection with, the subject matter of the case. 

There are two points to bear in mind. Firstly, it cannot be an objection that the court from which the ASI is sought lacks a sufficient interest because it is not the appropriate forum to resolve the substantive dispute. Injunctions to enforce arbitration agreements would always need to be granted by a court, and a court can never be either the natural or the agreed forum to resolve a substantive dispute the parties agreed to resolve by arbitration. Hence no one court can be more convenient than another on this basis.

Secondly, when the obligation to refer the dispute to arbitration is the subject of international agreement between the relevant states (in this case the New York Convention), comity has little role to play. Both Russia and France are signatories to the New York Convention and so there can be no violation of comity in the English court granting an ASI. In addition, on the evidence before it, the SC considered that the French court could have no objection to an English court taking steps to enforce the arbitration agreement and would have no objection to an ASI. 

In summary, the requirement that England be “the proper place in which to bring this claim”⁶ should be understood against the background of a presumption that England is the proper place in which to seek an ASI unless the fact that the arbitration has a foreign seat makes it inappropriate to do so. 

The SC also agreed with the CoA that substantial justice could not be obtained in the arbitration by obtaining an injunction from a tribunal. Fundamentally, any award made by an arbitral tribunal has no coercive force: it is not backed by powers to enforce performance that might be available to a court (primarily contempt of court). Any relief sought by UniCredit in the arbitration would be ineffectual in preventing RCA from breaching its agreement to arbitrate. In addition, it was “unattractive” for RCA to contend that substantial justice could be obtained in the arbitration whilst arguing in Russian proceedings that the arbitration agreement is invalid and unenforceable. 

The SC dismissed the appeal in its entirety and granted final relief, including an ASI requiring RCA to discontinue proceedings in Russia. 

What next?

Given the divergent approaches taken at various stages in the applications for ASIs brought by UniCredit, DB and Commerzbank, the SC’s decision brings finality in confirming that the English court can grant ASIs in support of foreign seated arbitrations. This decision underlines the pro-arbitration approach of the English court and offers a strong indication that where there is sufficient connection to the English court, for example through an English law governed arbitration agreement or personal jurisdiction over one of the parties, the English court will intervene to hold parties to their contractual bargain to arbitrate. 

The new government has confirmed that it intends to proceed with reform of the Arbitration Act 1996 (the Act) by passing a new arbitration bill in the 2024-25 parliamentary session. One proposed amendment to the Act is that an arbitration agreement will be governed by the law of the seat unless the parties expressly agree otherwise. The SC has noted that it is not clear what the word “expressly” necessarily adds to the word “agree” and that this change itself would not alter the position in Enka. However, the proposed amendment also includes a provision that a governing law clause that applies to a contract, of which the arbitration agreement forms a part, does not constitute express agreement that the governing law also applies to the arbitration agreement. This may remove one form of “sufficient connection” to England as a jurisdiction for the purpose of obtaining an ASI in support of foreign seated arbitrations.

Nevertheless, the SC’s decision in UniCredit demonstrates that where the English court is satisfied that there is sufficient connection to England, it will assist foreign arbitrations by granting ASIs where appropriate. The reforms to be introduced by the bill are a further reminder that parties should pay close attention to the drafting of arbitration clauses and, to the extent that they may wish to seek relief from the English court in support of an arbitration to be seated in another jurisdiction, they will need to engage with and address the governing law of the arbitration agreement separately to the governing law provision for the remainder of the contract.
 

¹Deutsche Bank AG v RusChemAlliance LLC [2023] EWCA Civ 1144
²Commerzbank AG v RusChemAlliance LLC [2023] EWHC 2510 (Comm)
³Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38
⁴Enka at [170(vi)(a)]
⁵Spiliada Maritime Corpn v Cansulex Ltd [1987] 1 AC 460
⁶Civil Procedure Rule 6.37(3)