Three German banks have asked the UK courts to undo anti-suit injunctions that they obtained against RusChemAlliance, in order to avoid hefty fines from the Russian Courts. The fines that each bank faced were:
- Landesbank Baden-Württemberg: €52 million
- Commerzbank: €95 million
- DeutscheBank: €240 million
- UniCredit: €250 million
- Bayerische Landesbank: €270 million
The Russian court granted anti-suit injunctions (ASIs) to RusChemAlliance against the banks, the conditions of which were that the banks had to take all available measures to cancel the effect of the English ASIs. If the banks failed or refused, the fines would be imposed.
The Commercial Court agreed to revoke the final injunctive relief against RusChemAlliance, at the behest of the parties. It followed a decision earlier in the year from the Court of Appeal, in which the court lifted the ASI obtained by UniCredit (in similar circumstances). Read our briefing on that (international-arbitration) decision here.
DeutscheBank has also successfully applied to have its ASI discharged.
Brief background to the ASIs
The anti-suit injunctions were sought to restrain what were alleged to be breaches of arbitration agreements between each of the banks and RusChemAlliance, requiring disputes relating to certain performance bonds to be resolved by arbitration in Paris.
RusChemAlliace had commenced proceedings in Russia, and the banks alleged that this amounted to a breach of the arbitration agreements.
On 13 and 16 January 2025 the Russian Arbitrazh Court made anti-suit injunctions against the banks. Among the measures ordered to be taken were that the banks take all measures within their control, including filing an application for revocation and other applications, aimed at cancelling the effect of the UK ASIs.
In delivering his judgment, Foxton J said that there was “no difficulty” with the UK court immediately revoking the final injunctive relief. He accepted that there was a very real risk of significant financial penalties to the banks if sufficient efforts to revoke the declarations were not made.
Jurisdiction issue
However, Foxton J refused to reverse the court’s ruling that it had jurisdiction to issue the ASIs.
Those declarations on jurisdiction were concerned with the position in the past when the English court orders were made. He said that “they are matters that cannot, in reality, be revoked any more than a bell can be unrung.”
Instead, he pointed out that it was open to the banks to give an undertaking that they will not seek to rely on the declarations in any way.
Comment
This complex legal landscape arises in the context of Russian aggression in Ukraine, and the subsequent consequences on the energy sector.
The Russian legislature has adopted Article 248 of the Russian Commercial (Arbitrazh) Procedure Code which grants exclusive jurisdiction to the Russian commercial courts for disputes involving sanctioned persons or entities. This has the power to undermine arbitration agreements or jurisdiction clauses in other agreements. We unpack the impact of Article 248 in our sanctions article on the subject, here.[1]
The fines in these cases show the extent to which the Russian courts will go to enforce these measures and protect their national interests.
While the English courts have jurisdiction to grant ASIs, in the face of the commercial reality of enormous fines, the parties are entitled to seek to revoke those ASIs.
Read the Commercial Court’s decision here.
For more information on anti-suit injunctions generally, please read our in-depth guide.
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