[2025] EWHC 1368 (Comm)

Fecha: 05-Jun-2025

Proceedings in the Russian courts

Proceedings in the Russian courts

55.

On 17 April 2024, VTB issued proceedings in Russia against JPMCB and the various other JPM entities (including JPM Russia) in relation to the Correspondent Account, seeking freezing order relief pending the determination of the claim (“the Correspondent Account Claim”).

56.

In response, on 18 April 2024, JPMCB commenced proceedings against VTB in the New York courts seeking anti-suit relief in respect of the Correspondent Account Claim, which was granted on a temporary basis (“the New York Proceedings”).

57.

On 22 April 2024, VTB was granted freezing order relief in the Correspondent Account Claim. JPM Russia filed responses challenging that order.

58.

On 24 April 2024, VTB applied in the Russian courts for an anti-anti-suit injunction in respect of the New York Proceedings, which was granted on 25 April 2024.

59.

JPMCB sought to challenge the Correspondent Account Claim on jurisdictional grounds, and JPMCB, JPMS plc and JPM Russia all sought to challenge the freezing order relief granted in those proceedings (in particular so far as the freezing order appeared to apply to client money). The challenges concerning the freezing orders succeeded to a limited extent (the orders being clarified to ensure that they did not apply to assets being held on behalf of others). JPMCB and JPMS plc filed appeals in relation to other aspects of the challenge which were rejected on 24 June 2024.

60.

In the face of the anti-anti-suit injunction granted in the Correspondent Account Claim, on 9 July 2024, JPMCB applied to discontinue the New York Proceedings, which order was granted on 15 August 2024.

61.

During and after that period, JPMCB, JPMS plc and JPM Russia continued to file documents and applications in the Correspondent Account Claim including, in the case of JPM Russia, filing a defence on the merits, a counterclaim and seeking to join additional parties. JPM Russia’s counterclaim was dismissed on 14 August 2024. An appeal against that dismissal was rejected on 27 September 2024.

62.

At this point we reach the Russian court proceedings which are the subject of the applications made to this court. On 7 October 2024, VTB commenced two sets of proceedings in the Arbitrazh Court of St Petersburg and Leningrad Region against the nine JPM entities who are now parties to the Commercial Court proceedings.

63.

The first, claim A56-99151/2024, concerned the Client Agreement (“the Client Agreement Claim”):

The claim referred to the Client Agreement and to the transfer of the balance into a blocked account and stated “thus Defendant 1 unilaterally disposed of the Claimant’s property in the absence of any instructions from the Defendant.” It is alleged that JPMS plc “committed unlawful actions in respect of the Claimant’s property, including failing to transfer (retaining) the monies that were due”.

ii)

It is alleged that “the other co-defendants in turn have failed to act and have made no attempt to assist Defendant 1 in settling the debt”.

iii)

The articles of the Russian Civil Code relied upon are Articles 1064(1), 1080, 1082 and Article 15(1). They will be familiar to those who have been involved in Russian litigation in the Commercial Court. Article 1064 imposes liability of someone who causes harm to the person or property of another, and is clearly a liability in tort. As Hamblen J noted in OJSC VTB Bank v Parline Limited [2015] EWHC 1135 (Comm), [8], this article “provides a general basis of tortious liability for causing harm”. Article 1082 obliges the person who has caused harm to compensate for the losses caused. Article 15(1) provides for the payment of compensation for losses caused by invasions of legal rights more generally, including for breach of contract as well as in tort. Article 1080 provides for the joint and several liability of tortfeasors.

iv)

The claim against JPMS plc is pleaded as a tort claim, the substance of which is the failure to pay the balance due under the Client Agreement and the retention of the same.

The claim against the remaining JPM entities is as joint and several tortfeasors in that alleged wrong.

vi)

In addition to general provisions of the Russian Civil Code, the claim refers to various principles of law developed by the Russian courts in response to sanctions imposed on Russian entities and individuals by foreign states, referring to post-sanctions decisions involving Citibank, ING Bank NV and Nordea Bank which appear to involve the imposition of joint and several liability on all the companies in the same corporate group.

vii)

So far as JPMB Russia is concerned, reference is made to a principle of “de facto representation” which is once again said to permit the separate legal personality of companies in the same corporate group to be ignored. Reference is made to “an approach … developed in Russian jurisprudence whereby the actions of subsidiaries and indirect subsidiaries of a foreign group of companies are interpreted by the courts as an abuse of a legal entity’s formal independence”, such that all the companies in a single economic unit are liable. This refers to post-sanctions decisions of the Russian courts involving Google, Siemens, Citibank and Linde.

viii)

The claim asserts the application of Russian law on the basis that the harm alleged is said to have been suffered in the territory of the Russian Federation and because the application of foreign law would be contrary to Russian public policy.

ix)

Finally, jurisdiction was asserted on the basis of the now notorious Article 248.1 of the Arbitrazh Civil Code, which gives that court exclusive jurisdiction over disputes involving sanctioned Russian individuals or entities or which concern such sanctions, regardless of any choice-of-forum agreement.

The amount claimed is USD 81,333,185.01 – i.e. JPMS plc’s calculation of the net balance due to VTB under the Client Agreement having deducted the amount due from VTB under the ISDA Master Agreement.

64.

The second, claim A56-99242/2024, concerns the UMAA (“the UMAA Claim”):

It pleads the conclusion of the UMAA between VTB and JPMCB through its London branch, and the termination of the UMAA.

ii)

It pleads that the balance of the precious metal accounts had not been repaid to VTB, notwithstanding its demand.

iii)

It pleads that JPMCB’s failure to transfer the balance, and the failure of the other JPM entities to take measures to restore VTB’s rights, constituted an abuse of rights (a Russian law tort).

iv)

Claims are advanced on the basis of the same articles of the Russian Civil Code and the same Russian case law developments as in the Client Agreement Claim, and also under Article 10(1) (the tort of abuse of rights).

The applicable law and jurisdiction contentions were the same as those in the Client Agreement Claim.

65.

The Arbitrazh Court made freezing orders in the UMAA and Client Agreement Claims between 8 and 15 October 2024. Preliminary hearings in the two claims initially fixed for 8 and 27 November respectively were adjourned to 18 December and 15 January.

66.

On 11 October 2024, JPM Russia made a further attempt to appeal the order dismissing its counterclaim, by way of an appeal to the Court of Cassation. That appeal was rejected on 18 November 2024.

67.

On 24 October 2024, judgment on the merits was entered against the various JPM entities in the Correspondent Account Claim.

68.

On 25 November 2024, various of the JPM entities, including JPMCB, JPM Russia and JPMS plc, filed an appeal against that judgment.

69.

On 12 December 2024, JPMS plc and JPMCB as JPMCB London issued these proceedings and made without notice applications for anti-suit injunctions. The following day the Interim ASIs were granted by Andrew Baker J:

VTB was prohibited from taking any steps to pursue, prosecute or progress its claims against the various JPM entities in the Client Agreement and UMAA Claims.

ii)

VTB was prohibited from taking any step to pursue, prosecute or progress “any other proceedings in any court or tribunal concerning any dispute arising out of or in connection with” the Client Agreement and the UMAA “otherwise than through LCIA arbitration” in accordance with the terms of the CA and UMAA Arbitration Agreements.

iii)

VTB was prohibited from “seeking any interim or conservatory order or relief or remedy or measure” inconsistent with the relevant Arbitration Agreement or the Claimants’ steps to enforce that agreement.

70.

As a result of those injunctions, and to VTB’s credit, the preliminary hearing in the UMAA Claim was moved to 31 January 2025 (and later to 14 May 2025), and that in the Client Agreement Claim to 23 April 2025. The Interim ASIs were continued by Mr Justice Calver on 16 January 2025, who adjourned the return date to a final hearing.

71.

On 14 February 2025, JPMS plc and JPMCB applied to join the other JPM parties to the proceedings, which application was granted by Bright J on 19 February 2025.

72.

On 11 March 2025, VTB issued its jurisdiction challenge to the English proceedings. Mr Riem of VTB’s solicitors stated that “VTB does not dispute the calculation of the sums held on its behalf by JPMS and JPMCB”. At paragraph 8.2 of his first witness statement, Mr Riem stated “the Client Agreement was terminated, with underlying derivatives being closed out and the balance (amounting to USD 81,333,185.01 once set-offs were applied) … then being transferred to a blocked account.” Elsewhere, Mr Riem identified USD 81,333,185.01 as “the value of the Securities Account Balance”. Mr Riem also stated that “VTB does not dispute the calculation of the sums held on its behalf by” JPMS plc and JPMCB.

73.

On 14 March 2025, VTB issued a further claim in the Arbitrazh Court under claim A56-24289/2024 (“the ISDA Claim”). The claim referred to the ISDA Master Agreement and to the “Respondent’s failure to comply with the obligation to pay funds upon termination of transactions under the General Agreement”.

74.

The pleading referred to VTB’s notification of the early termination date under the ISDA Master Agreement, its calculation of the amounts due “in connection with” that early termination date of EUR 108,636,829.56 and alleged that Respondent 1 – JPMS plc – “failed to comply with Claimant’s claims, misappropriated the funds due to the Claimant, which caused VTB Bank losses.” The claims against the other JPM entities were, once again, on the basis that “the remaining Defendants, in turn, do not act and do not attempt to assist D1 in resolving the debt.” The legal and jurisdictional arguments were otherwise those advanced in the UMAA and Client Agreement Claims.