Recently, several anti-suit injunctions have been granted by the courts of England and Wales to restrain proceedings brought in Russia in breach of an arbitration agreement.
However, where the arbitration agreement isn’t governed by English law, the application faces an uphill battle. In FH Holding Moscow Limited v AO Unicredit Bank & Anor [2026] EWCA Civ 468 the application was dismissed at first instance, and the decision to dismiss was upheld by the Court of Appeal.
One of the reasons to refuse the ASI was that the arbitration agreement provided for arbitration in Vienna. While the underlying agreement was governed by English law, the effect of section 6A of the Arbitration Act 1996, inserted into the 1996 Act by the Arbitration Act 2025, is that this arbitration clause is governed by Austrian law, the law of the seat.
Background facts
UniCredit banks provided FH Holding Moscow Limited (FHM) with a loan facility. FHM used various fashion retail outlets in or near Moscow as security for the loans under a mortgage agreement.
UniCredit alleged that FHM defaulted on the loan, and so it brought proceedings in Russia to take possession of properties used as security.
FHM denied that they had defaulted on the loan, arguing that its payment obligations were suspended due to Russian law and Russian counter-sanctions which rendered repayment of the euro loan unlawful.
FHM applied to the courts of England and Wales for an anti-suit injunction to obstruct the Russian proceedings. The application was refused at first instance, and the Court of Appeal upheld that decision.
Mortgage Agreement and the Facilities Agreement
The Mortgage Agreement was subject to Russian law and jurisdiction.
The Facility Agreement was governed by English law, but it contained an arbitration clause, which provided for arbitration in Vienna. As such, the court held that the arbitration agreement is governed by Austrian and not English law.
Given that the arbitration clause with which the proceedings were concerned was not governed by English law, it was “a shaky foundation” for the grant of a remedy as serious as an anti-suit injunction.
Obligation to obtain an arbitral award
FHM said that UniCredit were obliged to obtain an award from an arbitral tribunal in Vienna declaring that an Event of Default had occurred. They said that failure to do this was a breach of the arbitration clause in the Facility Agreement.
The banks argued that the Mortgage Agreement allowed for immediate enforcement through the Russian courts, including resolving any dispute about default.
The dispute about the “Event of Default” fell within the ambit of both the Facility Agreement and the Mortgage Agreement. But when there are competing clauses, both clauses can apply and the court rejected the idea that the arbitration clause had exclusive priority.
In any event, the proposal of a two-stage process would be counter to commercial sense. Commercial parties seek swift enforcement, and requiring a prior arbitration to determine the Event of Default would undermine the commercial purpose of efficient resolution of disputes.
The Moscow proceedings were therefore not brought in breach of the arbitration clause in the Facility Agreement. If there was no breach, the claim for an anti-suit injunction had to fail.
Analysis
The court repeatedly stressed that the dispute had minimal connection to England. AO UniCredit is a Russian company, pursuing proceedings against a Russian property owner FHM, a Cypriot company tax resident that operates only in Russia.
Males J commented that “it is not easy to see why this issue has anything to do with English law or the English court.”
Clearly the courts of England and Wales are reluctant to intervene when there is insufficient connection to the jurisdiction.
The case also highlights a drafting gap which can easily slip through the net of commercial agreements. If the parties intend for disputes to be referred to arbitration, that must be clearly stated in the underlying agreement. Ideally all commercial agreements (as between the same parties at least) should contain consistent dispute resolution clauses to avoid confusion, or the potential for parallel proceedings.
