Cases where a third party seeks to enforce a contractual right which is subject to an arbitration agreement
Cases where a third party seeks to enforce a contractual right which is subject to an arbitration agreement
A related issue to that which arises in the present case is where a third party seeks to assert what the English court regards in substance as an attempt to enforce a right arising under a contract between two other parties, otherwise than in accordance with the dispute resolution provision for which the parties have stipulated in that contract. It is not necessary to review the extensive case law on this subject, but there are a number of features of the court’s approach which are of interest. For reasons of familiarity only, I have drawn on my summary of the judgments of other judges in QBE Europe SA/NV v Generali Espana de Segurosy Reasaguros [2022] EWHC 2062 (Comm):
The English court has chosen not to treat applications for anti-suit relief in these circumstances as turning on the general jurisdiction to grant relief where the proceedings to be injuncted are vexatious and oppressive ([13]).
The English court applies the same decision-making framework as for “wholly contractual” anti-suit injunctions, in effect according the right not to be sued for the enforcement of a contractual right otherwise than in accordance with the dispute resolution procedure conditioning that right the same status as a promise by a contracting party only to bring proceedings in the agreed forum ([16]-[20]).
For the purposes of exercising its jurisdiction to grant anti-suit relief, the court will classify the right asserted in the non-contractual forum by reference to English conflict of law principles, looking at the position as a matter of substance. The characterisation of the right as a matter of the relevant foreign law is not determinative ([23]-[27]). This is consistent with the approach adopted generally when determining whether foreign law claims fall within a jurisdiction of arbitration clause: Nori Holding Ltd v PJSC Bank Otkritie Financial Corpn [2018] EWHC 1343 (Comm), [63].
The decision to treat anti-suit injunctions in these circumstances in the same way as “wholly contractual” anti-suit injunctions, rather than relying on the “vexatious and oppressive” basis, can be significant for a number of reasons:
Establishing that the foreign proceedings are vexatious and oppressive has been held to involve “a more onerous and more nuanced test” (Times Trading Corp v National Bank of Fujairah [2020] EWHC 1078 (Comm), [42]), with issues of comity weighing more heavily against granting relief (SAS Institute Inc v World Programming Ltd [2020] EWCA Civ 599, [91]).
There may be more difficulty in establishing the court’s jurisdiction, the view having been expressed that one of contractual gateways is available in a “conditional benefit” cases (QBE, [22]). By contrast, it has been held (by reference to an older version of the service out gateways) that there is no gateway for vexatious and oppressive anti-suit injunctions (Navig8 Pte Ltd v Al-Riyadh Co for Vegetable Oil Industry [2013] EWHC 328 (Comm)).
Finally, depending on where the law ends up in this area after the hearing in the Supreme Court, it is possible that the correct classification may affect the court’s ability to award relief by way of equitable compensation (cf Kingdom of Spain v The London Steam-Ship Owners’ Mutual Insurance Association Limited [2024] EWCA Civ 1536).
- Heading
- A INTRODUCTION
- The parties
- The evidence
- The UMAA
- The Client Agreement
- The ISDA Master Agreement
- The Terms
- The Correspondent Bank Account
- C THE BACKGROUND
- Proceedings in the Russian courts
- D THE “WHOLLY CONTRACTUAL” ANTI-SUIT CLAIMS
- The UMAA and the Client Agreement
- The 2017 Terms
- Which of the JPM Entities are entitled to enforce the 2017 Terms Arbitration Agreement?
- What is the effect of the contractual hierarchy provisions on the status of the 2017 Terms Arbitration Agreement in relation to the various claims brought by VTB?
- The ISDA Master Agreement
- E THE APPLICATION BY A CONTRACTING PARTY TO RESTRAIN CLAIMS AGAINST NON-CONTRACTING PARTIES AS A MATTER OF CONTRACT
- Contractual promises not to sue third parties
- Cases where a third party seeks to enforce a contractual right which is subject to an arbitration agreement
- The special status of arbitration agreements under English law
- The authorities
- The construction argument
- An implied term
- F THE APPLICATION TO RESTRAIN CLAIMS ON THE “VEXATIOUS AND OPPRESSIVE” BASIS
- The UMAA and Client Agreement Claims
- The ISDA Claim
- G SHOULD THE COURT REFUSE TO MAKE THE INJUNCTION IN THE EXERCISE OF ITS DISCRETION?
- H THE CLAIM FOR AN ANTI-ENFORCEMENT INJUNCTION
- I VTB’S CHALLENGE TO JURISDICTION
- Forum non conveniens
- Alternative service
- Conclusions
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