On 3 April 2025 the Court of Appeal in Renaissance Securities (Cyprus) Limited v ILLC Chlodwig Enterprises and ors [2025] EWCA Civ 369 dismissed an appeal against the refusal to grant an anti-suit injunction (ASI) against two Russian companies (A and P).
The judgment considers (i) the circumstances in which an ASI may be granted to restrain claims against affiliated third-parties and (ii) the obligation of full disclosure by an ASI applicant.
Facts
A and P, the Respondents, entered investment and services agreements (ISAs) with the Appellant, RenSec. Under the ISAs 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 or damages. A and P also brought Russian delict (tort) claims against companies said to be affiliates of RenSec (the RenSec Russian Entities or RREs) seeking damages equivalent to the value of those assets (the RRE Claims).
RenSec obtained ASIs restraining the Russian claims against RenSec on the basis that they breached the Arbitration Agreements.
RenSec also applied for ASIs against the RRE Claims.
First Instance
At first instance, RenSec’s primary argument was that the RRE 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 argued the RRE 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 seeking an ASI in relation to the RRE Claims because RenSec was exposed to claims by the RREs if they proceeded and were successful.
The Judge, HHJ Pelling KC, dismissed RenSec’s application. He did so on the basis that (i) properly construed, the ISAs did not cover the RRE 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 the RRE Claims could be brought.
The appeal
Arguments
On appeal RenSec argued that the Arbitration Agreement contained an implied negative promise not to bring claims against third parties for which RenSec might be held jointly or severally liable outside arbitration. The effect of such an implied promise would have been to prevent any such claims being brought at all because 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, on fresh evidence adduced since the first instance decision, two of the three RREs had been sold and RenSec had refused to provide copies of the relevant sale and purchase agreements (SPAs) that would reveal whether they protected RenSec from contribution liability. A and P therefore argued that RenSec no longer had a legitimate interest in seeking an ASI.
Finding
The Court of Appeal held at [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 [2016] AC 742.
On the non-contractual basis, the Court held at [51] that the jurisdiction to grant an ASI is not conditional on there being an alternative forum in which the foreign claim may be brought. The Court acknowledged at [55-56] that there was “some force” in the submission that the RRE Claims were vexatious or oppressive because they appeared to be designed to circumvent and undermine the effect of the Arbitration Agreements and sanctions [55-60].
However, the Court nevertheless concluded (unanimously at [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 and the court had not been given the full factual background against which to exercise its discretion.
In so concluding, the Court relied on the comments of Lord Bingham in Donahue v Armco Inc, at para 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 restating the law on the contractual and non-contractual bases for the grant of an ASI, the judgment provides (i) a useful reminder of the importance of demonstrating a legitimate interest in seeking an ASI against third party claims and (ii) a forceful reminder of the consequences of a lack of candour when pursuing an ASI, particularly given the comity considerations at play in such applications.
The obiter remarks of the Court in relation to the interaction between affiliate claims and sanctions evasion may have wider-reaching consequences for sanctions-related litigation.
Douglas James acted for A and P at first instance and on appeal, led by Rupert D’Cruz KC (Littleton Chambers) and instructed by the Enyo Law team of Konrad Rodgers, Matthew Marshall and Roshan Laidlay (instructed by Kirill Trukhanov of Trubor Law, Moscow).
