On 3 April 2025 the Court of Appeal in Renaissance Securities (Cyprus) Limited v ILLC Chlodwig Enterprises and Others dismissed an appeal against the refusal to grant an anti-suit injunction (ASI) against two Russian companies (A and P).
A and P were represented at first instance and on appeal by Rupert D’Cruz KC of Littleton Chambers, leading Douglas James of 4 New Square; and the Enyo Law team of Konrad Rodgers, Matthew Marshall and Roshan Laidlay, instructed by Trubor Law, Moscow (led by Kirill Trukhanov).
The judgment considers: (i) the circumstances in which an ASI may be granted to restrain claims against affiliated third-parties; (ii) the need to demonstrate a legitimate interest in restraining claims against third parties; and (iii) the obligation to provide full disclosure when seeking an ASI.
Facts
A and P entered investment and services agreements (ISAs) with the Appellant, Rensec, under which Rensec agreed to manage assets of A and P. The ISAs are governed by English law and contain LCIA arbitration agreements (the Arbitration Agreements).
A and P sought the return of those assets. RenSec declined on the basis that doing so would breach US, EU and (potentially) UK sanctions.
A and P brought claims in Russia in contract against RenSec seeking the return of those assets. A and P also brought Russian delict claims against companies said to be affiliates of Rensec (the Rensec Affiliates/ Rensec Affiliate Claims) seeking damages equivalent to the value of those assets.
RenSec had (unopposed) obtained ASIs restraining the Russian claims against RenSec on the basis that they breached the Arbitration Agreements.
RenSec then applied for a further ASI in relation to the RenSec Affiliate Claims.
First Instance
At first instance, RenSec’s primary argument was that the RenSec Affiliate Claims should be restrained on a contractual basis – that the Arbitration Agreements, properly construed, covered those claims (as well as claims against RenSec).
Alternatively, RenSec also argued that the Russian Affiliate Claims should be restrained on the basis that they were vexatious or oppressive because they were brought to evade the operation of sanctions and were a collateral attack on RenSec’s rights under the Arbitration Agreements. RenSec further argued that it had a legitimate interest in restraining RenSec Affiliate Claims because it was exposed to a contribution claim by the RenSec Affiliates if those claims succeeded.
The Judge dismissed the application on the basis that: (i) properly construed, the ISAs did not cover the RenSec Affiliate Claims; and (ii) there was no basis for granting an ASI on vexatious or oppressive grounds if (as was common ground) there was no other jurisdiction in which they could be brought.
The appeal
Arguments
On appeal RenSec argued that the Arbitration Agreements contained an implied negative promise not to bring claims outside arbitration against third parties which might expose RenSec to contribution liabilities. The effect of such an implied promise would have been to prevent any such claims being brought at all since they could not even be brought in arbitration, given that the third parties would not be parties to the Arbitration Agreements.
A and P contended that an additional reason for refusing the ASI was that since the first instance decision the RenSec Affilliates had been sold; and RenSec has refused to provide copies of the relevant sale and purchase agreements (SPAs) that would reveal whether they contained exclusion clauses protecting RenSec from contribution liability in relation to the RenSec Affiliates Claims. In these circumstances, A and P argued, RenSec had failed to demonstrate a legitimate interest in seeking an ASI against those claims.
Decision
On the contractual point, The Court of Appeal held [42-48] that the implied negative promise contended by RenSec did not meet the test for implied terms set out in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2015] UKSC 72; [2016] AC 742, at paras 14-32 (Lord Neuberger PSC)
On vexatious or oppressive, the Court [51] held that the jurisdiction to grant an ASI is not conditional on there being an alternative forum in which the foreign claim may be brought; and acknowledged [55-56] that there was “some force” in the submission that the RenSec Affiliate Claims were vexatious and oppressive because they appeared designed to circumvent the effect of the Arbitration Agreements; and to overcome the UK sanctions regime.
However, the Court nevertheless concluded [67-72, 75 and 79] that it was not appropriate to grant an ASI because in the absence of the SPAs it was not clear that RenSec had a legitimate interest to protect in seeking one.
In so concluding, the Court relied on the comments of Lord Bingham in Donahue v Armco Inc, at paragraph 16 that:
“The grant of an anti-suit injunction, as of any other injunction, involves an exercise of discretion by the court. To exercise its discretion reliably and rationally, the court must have the fullest possible knowledge and understanding of all the circumstances relevant to the litigation and the parties to it. This is particularly true of an anti-suit injunction because, as explained below, the likely effect of an injunction on proceedings in the foreign and the domestic forum and on parties not bound by the injunction may be matters very material to the decision whether an injunction should be granted or not.” (emphasis added)
Summary
As well as summarising the law on the contractual and non-contractual bases for granting an ASI, the judgment provides a useful reminder of: (i) the importance of demonstrating a legitimate interest in seeking an ASI against third party claims; and (ii) the consequences of a lack of candour when applying for an ASI, particularly given the comity considerations at play in such applications.
The obiter remarks of the Court on the interaction between affiliate claims and sanctions evasion may have wider-reaching consequences for sanctions-related disputes.
