UK Supreme Court grants anti-suit injunction and re-affirms Enka upholding parties’ agreement to arbitrate

In a unanimous decision demonstrating the English court’s willingness to uphold an agreement to arbitrate, the UK Supreme Court has  continued an anti-suit injunction (ASI) preventing parallel proceedings taking place in Russia in contravention of the parties arbitration agreement. The judgment, in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30,  follows the Supreme Court decision in Enka v Chubb as to the method for determination of the governing law of an arbitration agreement.   

The judgment upholds the decision of the Court of Appeal, that the appellant RusChemAlliance LLC (RusChem) must cease court proceedings in Russia against the respondent, UniCredit Bank GmbH (“UniCredit”), in circumstances where the parties have agreed, in a contract governed by English law, that any disputes between them shall be settled by arbitration in Paris.  

The background

RusChem had agreed to a series of contracts with various German companies (the Contractors) relating to the construction of gas processing plants in Russia. The Contractors’ performance was guaranteed by performance bonds (the Bonds) issued by UniCredit, an international bank based in Milan, which (along with all non-contractual and other obligations arising out of or in connection with the Bonds) were governed by English law. Following the imposition of EU sanctions after Russia’s invasion of Ukraine, the Contractors ceased work, and RusChem terminated the contracts and made a demand under the Bonds, which was refused by UniCredit.

In spite of the fact that the underlying Bonds were governed by English law and provided for Paris as the seat of arbitration (although crucially they did not specify the governing law of the arbitration agreement), RusChem referred the dispute to the Russian courts.  Article 248 of the Russian Arbitrazh Procedural Code confers exclusive jurisdiction on Russian Arbitrazh Courts over disputes between Russian and foreign persons arising from foreign sanctions and treats an agreement providing for arbitration of such a dispute outside the territory of the Russian Federation as inoperable.  

In turn, UniCredit  applied to the Arbitrazh Court to dismiss RusChem’s claim on the ground that the parties had agreed that all disputes arising out of the Bonds were to be settled by arbitration in Paris under the rules of the ICC and also issued proceedings in the English Commercial Court for an ASI.  Interestingly, the Russian Judge agreed to stay the Russian proceedings until the outcome of the English proceedings were determined. 

The English proceedings 

In the Commercial Court UniCredit relied on the principles laid out in Enka v Chubb, where the Supreme Court held that where…