[2025] EWHC 1368 (Comm)

The first case of which I am aware which addressed the Third Party Claim Obligation is Credit Suisse First Boston (Europe) Ltd v MLC (Bermuda) Ltd [1999] 1 All ER 37. Rix J rejected the suggestion that a conventionally worded EJC prevented one party to it from suing the other’s affiliate in New York, stating at 252a that:

“… it seems to me to be far-fetched to regard 'any disputes' as covering disputes between MLC and any one other than MLC's contract partner under the purchase agreements, namely CS Europe. Clause 5.2 is part of a bilateral agreement between a seller and a buyer, and the disputes to which such an agreement may give rise are prima facie bilateral disputes. Indeed, it is I would have thought axiomatic that, at any rate in the absence of plain language to the contrary, a contract seeks neither to benefit nor to prejudice non-parties: even where such plain language is used, it is black-letter law that the non-party can himself neither take the benefit nor suffer the burden of the contract. In the present case there is nothing in the language of cl. 5.2 to suggest that it is intended to have an ambit beyond the parties to the purchase agreements themselves. While it is true that the agreements mention CS affiliates, there is nothing in the express language of cl. 5.2 to suggest that the clause is intended to bind MLC as to where it is entitled to sue such affiliates….”

However, the contrary argument gained significant support from Lord Scott (but only from Lord Scott) in Donohue v Armco Inc [2001] UKHL 64, [60]. In that case, there were New York proceedings brought by a number of claimants against a number of defendants in relation to a transaction. Some of the claimants and some of the defendants, including Mr Donohue, were parties to an EJC in the transaction documents. Lord Bingham at [30] did not see any basis on which New York proceedings against non-party defendants could be restrained. However, Lord Scott at [60]-[61] said the following:

“There is a point of construction of the exclusive jurisdiction clause that it is convenient to deal with at this point. It is accepted that the clause is not restricted to contractual claims. A claim for damages for, for example, fraudulent misrepresentation inducing an agreement containing an exclusive jurisdiction clause in the same form as that with which this case is concerned would, as a matter of ordinary language, be a claim in tort that arose ‘out of or in connection with’ the agreement. If the alleged fraudulent misrepresentation had been made by two individuals jointly, of whom one was and the other was not a party to the agreement, the claim would still be of the same character, although only the party to the agreement would be entitled to the benefit of the exclusive jurisdiction clause. The commencement of the claim against the two alleged tortfeasors elsewhere than in England would represent a breach of the clause. The defendant tortfeasor who was a party to the agreement would, absent strong reasons to the contrary, be entitled to an injunction restraining the continuance of the foreign proceedings. He would be entitled to an injunction restraining the continuance of the proceedings not only against himself but also against his co-defendant. The exclusive jurisdiction clause is expressed to cover ‘any dispute which may arise out of or in connection with’ the agreement. It is not limited to ‘any claim against’ the party to the agreement. To give the clause that limited construction would very substantially reduce the protection afforded by the clause to the party to the agreement. The non-party, if he remained alone as a defendant in the foreign proceedings, would be entitled to claim from his co-tortfeasor a contribution to any damages awarded. He could join the co-tortfeasor, the party entitled to the protection of the exclusive jurisdiction clause, in third party proceedings for that purpose. The position would be no different if the claim were to be commenced in the foreign court with only the tortfeasor who was not a party to the exclusive jurisdiction clause as a defendant. He would be able, and well advised, to commence third party proceedings against his co-tortfeasor, the party to the exclusive jurisdiction clause.

... In my opinion, an exclusive jurisdiction clause in the wide terms of that with which this case is concerned is broken if any proceedings within the scope of the clause are commenced in a foreign jurisdiction, whether or not the person entitled to the protection of the clause is joined as defendant to the proceedings. An injunction restraining the continuance of the proceedings would not, of course, be granted unless the party seeking the injunction, being someone entitled to the benefit of the clause, had a sufficient interest in obtaining the injunction. It would, I think, be necessary for him to show that the claim being prosecuted in the foreign jurisdiction was one which, if it succeeded, would involve him in some consequential liability. It would certainly, in my opinion, suffice to show that if the claim succeeded he would incur a liability as a joint tortfeasor to contribute to the damages awarded by the foreign court.”

(emphasis in italics added, emphasis in bold in original).

This was a jurisdiction rather than arbitration case (cf [105]-[107]), but even in this context the italicised statement is highly contentious so far as the “non-party” defendant is concerned, certainly in its absolute form. While the “indirect liability” argument has real force in the course of a settlement agreement intended to draw a line under a dispute (cf [102]-[103] above), it is far less compelling in the context of an agreed forum clause. In any event, there is clearly no similar rule in relation to arbitration (see [107]-[109]). The issue was not, apparently, the subject of oral or written argument in the case (Morgan Stanley & Co International Plc v China Haishen Juice Holdings Co Ltd [2009] EWHC 2409 (Comm), [30]).

The issue appears next to have come before Norris J in Winnetka Trading Corp v Julius Baer International Ltd [2008] EWHC 3146 (Ch), in which proceedings were brought in this jurisdiction against the second defendant and its agent who had rendered the contractual performance on its behalf, in circumstances in which there was an EJC in favour of the courts of Guernsey as between the claimant and the second defendant. Norris J was asked to stay the proceedings against the first defendant. At [28], he said that “this is a point which has greatly troubled me, but I am persuaded that the answer is to be found in” Lord Scott’s judgment, in circumstances in which the second defendant would face an indemnity claim from the first defendant if it was liable.

In Morgan Stanley & Co International Plc v China Haishen Juice Holdings Co Ltd [2009] EWHC 2409 (Comm), proceedings were brought against the claimant and an affiliate in China when there was an English EJC between the claimant and the defendant. Teare J rejected the contention that the wide wording of the EJC (in terms of the required nexus between the claim and the contract) had the effect that the defendant had promised not to sue third parties in respect of disputes which met the required nexus. In reaching that conclusion he relied (as Mr Fenwick KC does here) on provisions addressing the issue of third party rights (which gave affiliates the right to enforce terms expressly granted to them on giving prior notice), stating that “the fact that the parties dealt expressly with Third Party Rights but did not expressly deal with claims against third parties supports the suggestion that the parties were not addressing claims against third parties in clause 13.” He also relied on the fact that there was no provision for affiliates to appoint a process agent (in contrast to the provision made for service on agents appointed by the signatories).

The Third Party Claim Obligation issue received detailed consideration in a judgment of Laurence Rabinowitz KC in Team Y&R Holdings Hong Kong Ltd v Ghossoub [2017] EWHC 2401 (Comm). An agreement for the sale and purchase of shares in a Hong Kong company included an English EJC. This was also the case for an associated employment contract. An unfair prejudice petition to the Hong Kong court was brought in respect of the affairs of the company, the factual basis of which included a significant number of matters which amounted to breaches of the two contracts, but the Hong Kong proceedings included a number of respondents who were not parties to either contract. Mr Laurence Rabinowtiz KC reviewed the various authorities I have referred to, and summarised the principles he extracted from them at [82]:

“(1)

Whether an exclusive jurisdiction clause should be understood to oblige a contractual party to bring claims relating to the contract in the chosen forum even if the claim is one against a non-contracting party, requires a consideration of the contract as a whole including not just the language used in the exclusive jurisdiction clause but also all other terms in the contract that may shed light on what the parties are likely to have intended.

(2)

The principle that rational businessmen are likely to have intended that all disputes arising out of or connected with the relationship into which they had entered would be decided by the same court cannot apply with the same force when considering claims brought by or against non-contracting third parties. More particularly, whist it is well established that the language of an exclusive jurisdiction clause is to be interpreted in a wide and generous manner, the starting position in considering whether disputes involving a non-contracting third party might come within the scope of the clause must be that, absent plain language to the contrary, the contracting parties are likely to have intended neither to benefit nor prejudice non-contracting third parties.

(3)

Where it is clear from the express terms that the contracting parties have turned their minds to the position of third parties and more particularly whether such third parties are to benefit or bear the burden of rights and obligations agreed between the contracting parties, the absence of any express language in the exclusive jurisdiction clause that provides for the application of that term in relation to claims brought by or against third parties may be an indication that the clause was not intended either to benefit or prejudice such third parties.

(4)

Where the exclusive jurisdiction clause is silent on the question, the fact that any provision in the contract dealing with third parties indicates an intention that third parties should not acquire rights as against the contracting parties by virtue of the contract, may be a further indication that the clause was not intended either to benefit or prejudice such third parties.

(5)

Where a particular interpretation of the exclusive jurisdiction clause produces a material contractual imbalance because for example it results in one party to a dispute relating to the contract being subjected to an obligation to bring proceedings in the chosen jurisdiction in circumstances where the other party to the dispute is not similarly obliged, or where that interpretation would require a claim against a non-contracting third party to be brought in the agreed jurisdiction even where the chosen forum may not actually have jurisdiction over such a claim against that party, this too may be an indication that the clause was not intended to so apply because such a result is unlikely to be what the contracting parties as rational businessmen would have agreed.

(6)

The fact that there is nothing in the contract that might indicate a rational limit in terms of the identity of non-contracting third parties whose rights and interests might be affected by the application of an exclusive jurisdiction clause might provide a further indication that the clause was only intended to affect the rights and interests of the contracting parties.

(7)

It follows that where contracting parties intend that any claim relating to the contract be subject to the exclusive jurisdiction clause even where it is one brought by or against a non-contracting party, clear words should be used expressly setting out this intention, the parties to be affected and, if relevant, the manner in which submission of any non-contracting parties to the jurisdiction of the chosen court is to be ensured.”

In Dell Emerging Markets (EMEA) Ltd v IB Maroc.com SA [2017] EHWC 2397 (Comm), Teare J considered whether an EJC in an international distributor agreement (“IDA”) between Dell UK and IB Maroc extended to claims against Dell UK’s affiliates. Clause 27 provided that claims brought by IB Maroc against “Dell or any of its affiliates” had to be brought within one year. Clause 2.5 contemplated affiliates of Dell UK supplying products under the IDA. The operation of the 1999 Act was excluded. IB Maroc sued Dell UK and Dell Maroc in Casablanca. An issue arose as to whether Dell UK was entitled to an injunction preventing IB Maroc from suing Dell Maroc. Teare J held that Dell UK was entitled to such an injunction, placing particular reliance on clause 27. As an EJC case, it was possible for IBM Maroc to sue Dell Maroc in the agreed forum.

The Third Party Claim Obligation was next considered in Clearlake Shipping Pte Ltd v Xiang Da Marine Pte Ltd [2019] EWHC 2284 (Comm), a decision of Mr Andrew Burrows QC. Head and sub-voyage charterparties provided (in relevant respects) for the exclusive jurisdiction of the English court (but, notably, for LMAA arbitration for small claims), and those provisions were incorporated into the bills of lading. There were also letters of indemnity intended to allow for the delivery of cargo without production of the bills which also contained English EJCs. The head owner was sued in Singapore, and sought to bring a third party claim against its charterer (Clearlake) and the sub-charterer (Gunvor) who sought anti-suit injunctions to restrain those claims, initially on the “wholly contractual” and “quasi-contractual” bases respectively (the latter description, for understandable reasons, not meeting with the judge’s approval: [25]). By the time of the hearing before the judge, injunctions were sought on the “wholly contractual” and “vexatious and oppressive” bases.

At [20] the Judge said:

“… [T]here is a further aspect of the law before me that is not so straightforward (although it was the application of the relevant legal principles, rather than the principles themselves, that appeared to divide the parties). This is the extent to which an exclusive jurisdiction clause in a contract (between A and B) can be enforced (by B against A) by an anti-suit injunction so as to prevent tort proceedings against a third party (i.e. by A against C) (assuming that, subject to this third party point, the tort proceedings would otherwise by covered by the jurisdiction clause).”

After referring to Lord Scott’s judgment in Donohue and to Team Y&R Holdings, at [23] the Judge offered his own summary of the law as follows:

“(i)

It is a matter for the interpretation of the jurisdiction clause whether the clause extends to cover the tort proceedings against the third party. Applying the general law of contract, the correct approach to that question of interpretation requires the application of the modern contextual and objective approach. One must ask what the clause, viewed in the light of the whole contract, would mean to a reasonable person having all the relevant background knowledge reasonably available to the parties at the time the contract was made (excluding the previous negotiations of the parties and their declarations of subjective intent). Business common sense and the purpose of the term (which appear to be very similar ideas) may also be relevant …

(ii)

If, as a matter of interpretation, the jurisdiction clause does extend to cover the tort proceedings against the third party, the contractual basis for an anti-suit injunction applies so that, as regards an application by the contracting party (B), the injunction will be granted unless there are strong reasons not to do so.

(iii)

Applying privity of contract, only the contracting party (B) and not the third party (C) can enforce the jurisdiction clause (against A) by an anti-suit injunction on the contractual basis (unless an exception to privity of contract applies). But the jurisdiction clause may be a relevant factor in granting the third party (C) an anti-suit injunction on the alternative basis that the foreign proceedings are vexatious or oppressive. (It is also presumably possible in certain circumstances that the jurisdiction clause, even though not contractually enforceable by the contracting party (B) in favour of the third party (C), may be a relevant factor in granting the contracting party (B) an anti-suit injunction against the other contracting party (A) on the basis that the foreign proceedings are vexatious or oppressive.)”.

At [24], he stated:

“Absent express words as to the jurisdiction clause extending to claims against non-parties, the starting point in interpreting a jurisdiction clause (covering, let us say, 'all disputes arising out of the contract') will be that only the parties to the contract are covered. But I also agree with Lord Scott in the Donohue case that, where one has an alleged joint tort committed in relation to a contract by a contracting party and a non-contracting party, the objective interpretation of the jurisdiction clause (covering all disputes 'arising out of the contract') will tend to include a tort claim against the non-party because this will help to prevent forum-fragmentation on essentially the same issues.”

I have referred to my difficulty with Lord Scott’s “joint tortfeasor” analysis at [115] above. Those difficulties are reinforced in Clearlake by the fact that, for claims below a certain value, the parties had agreed to LMAA arbitration, where forum fragmentation is inevitable. In an obiter passage, the Judge considered whether Clearlake was entitled to an interim injunction to prevent Gunvor being sued. He did not express a concluded view, but at [36]-[37] stated:

“This raises the interesting question of interpretation discussed in paragraphs 20 to 24 above. The exclusive jurisdiction clause is in the Clearlake charter … The question is whether the reference in the exclusive jurisdiction clause to disputes arising out of the charter, on its correct interpretation, can apply to the claims by Xiang Da against Gunvor for tortious misrepresentation …

I have set out, in paragraph 23 above, the correct approach to this question of interpreting the jurisdiction clause in the Clearlake charter. In this case, the application of that law (i.e. the question of contractual interpretation raised) does not admit of an easy answer. At root, one is asking whether Clearlake and Xiang Da objectively intended that Xiang Da’s tortious misrepresentation claims against Gunvor should be covered by that jurisdiction clause. The starting point in answering that is that, not least because there is no express reference to Gunvor, the clause does not extend to cover (tort) claims against Gunvor. But as against that there are the following five factors:

(i)

The misrepresentation claims against Gunvor may be said to constitute ‘a dispute arising out of this charter’. The alleged misrepresentations arose in relation to the performance of the Clearlake charter.

(ii)

There is nothing in the Clearlake charterparty expressly indicating that the jurisdiction clause should not apply in relation to Xiang Da’s tort claims against Gunvor.

(iii)

There is a close relationship between Clearlake and Gunvor. Both are part of the Gunvor Group and Clearlake is the chartering arm of the group. In that role, it had a long-term contract of affreightment with Gunvor and it was pursuant to that contract that the Gunvor sub-charter was entered into.

(iv)

It is clear that, had Clearlake been sued by Xiang Da for the tort of misrepresentation in relation to the Clearlake charter, that would have been caught by the exclusive jurisdiction clause. Similarly, had Xiang Da sued both Clearlake and Gunvor for the (same) misrepresentations, it would appear that the jurisdiction clause would have applied not only as regards Clearlake but also as regards Gunvor. If that is correct, it is not clear that it can make a significant difference that Xiang Da has chosen to sue only Gunvor for misrepresentation and not Clearlake.

(v)

Clearlake has an interest in the proceedings by Xiang Da against Gunvor. This is because, for at least two reasons, there is potential prejudice to Clearlake if the claim by Xiang Da against Gunvor goes ahead in Singapore. First, if Gunvor is found liable to Xiang Da, there is a realistic prospect of Gunvor having a contribution (or indemnity) claim against Clearlake as a joint and several tortfeasor. It is therefore of importance to Clearlake that the English courts make the determination of Gunvor’s tort liability to Xiang Da. Secondly, I have decided on issue (1) above (see paragraphs 27-32) that Xiang Da’s claims against Clearlake based on the re-documentation letter of indemnity should be heard in England not Singapore. There is a close link between those claims and the tort claim brought by Xiang Da against Gunvor and it is in the interests of Clearlake to avoid forum-fragmentation (and the waste of resources involved) by having all third party proceedings (by Xiang Da against Clearlake and Gunvor) heard in the same jurisdiction (i.e. England).”

Even leaving aside the LMAA complication, the attempt to construe the words “the High Court in London shall have exclusive jurisdiction over any dispute which may arise out of this Charter” as including a negative covenant not to sue third parties in certain circumstances in any other fora by any conventional process of contractual interpretation seems distinctly heroic. That does not preclude that outcome being reached by an unconventional process of construction, reflecting the particular policy issues at play (cf [112] above).

The first case to address the Third Party Claim Obligation in an avowedly arbitral context appears to have been EuroChem North-West-2 v Tecnimont [2023] EWCA Civ 688. EuroChem had engaged Tecnimont as contractors, with Tecnimont procuring the issue of performance bonds by banks in EuroChem’s favour. The works contract between EuroChem and Tecnimont had an ICC arbitration clause, the bonds English EJCs. EuroChem obtained anti-suit relief to prohibit Tecnimont commencing proceedings in Spain and Italy with a view to preventing the banks paying on the bonds, on the basis that it breached the EJC or the ICC arbitration clauses. The claim in relation to the EJC was rejected on the basis that Tecnimont was not a party to the bonds ([2022] EHWC 2444 (Comm), [13]) but it was held that the relevant proceedings had been brought in breach of the arbitration agreement, and injunctive relief granted on that basis. One of the reasons why payment had not been made under the bonds as it should have been was that an Italian court in separate proceedings had held that an Italian EuroChem subsidiary was controlled by sanctioned persons. The Italian subsidiary applied to the Italian court to set that finding aside, and Tecnimont applied to intervene in the proceedings to oppose that application. The issue then arose as to whether that application was a breach of the anti-suit injunction.

The Court of Appeal, by a majority, upheld the first instance judge’s conclusion that it was. That judgment was premised on the interpretation of the court’s order, but the Court considered (obiter) whether the intervention also breached the London arbitration agreement. Carr LJ addressed this issue at [60]-[64]:

“ … EuroChem NW and Tecnimont agreed to refer to arbitration ‘[a]ny Dispute arising between [EuroChem NW] and [Tecnimont] in relation to this Contract or in any way connected therewith’. ‘Dispute’ was defined as ‘any question, dispute or difference arising out of or in connection with this Contract including any dispute as to its existence, validity, interpretation, performance, breach or termination or the consequences of its nullity (each a ‘Dispute’)’. The clauses are thus drafted very broadly, and in any event are to be construed widely.

It is common ground that any cause of action between EuroChem NW and the Appellants concerning the enforceability of the Bonds falls within the scope of the London arbitration clauses (to which EuroChem NW and Tecnimont were bound). It appeared during the course of the appeal hearing also to be common ground that the ownership/control issue (centrally) in dispute between Tecnimont and EuroChem NW in the Arbitration and Bank Proceedings was also (centrally) in dispute between Tecnimont and EuroChem Agro in the Italian Proceedings.

The definition of ‘Dispute’ makes it clear that a ‘Dispute’ is not limited to separate formal proceedings or claims, but extends to mere questions or differences between the parties. The ownership/control issue is such a question or difference. Its outcome concerns, amongst other things, whether the Banks are liable to pay under the Bonds. Put simply, the ‘Dispute’ arises between EuroChem NW and Tecnimont in relation to or in connection with the Contracts. The fact that EuroChem NW was not party to the Italian Proceedings does not mean that EuroChem NW and Tecnimont are not to be taken as having agreed that the ownership/control issue (which relates to EuroChem AG and its subsidiaries) was to be litigated only in accordance with the London arbitration clauses, and not otherwise.

…

The conclusion sits entirely comfortably with the notion that these commercial parties would not have intended the same issue to be litigated here and abroad in different tribunals. As the Judge put it at [43], such proliferation of proceedings would be inimical to Tecnimont's agreement to resolve its disputes with EuroChem NW solely by means of London arbitration. It is to be remembered that the sole reason provided for Tecnimont's participation in the Italian Proceedings was its involvement in the Arbitration and Bank Proceedings. At the fundamental core, Tecnimont was seeking to litigate in Italy the very issue that it had agreed with EuroChem NW to address exclusively in London arbitration proceedings.”

Lewison LJ agreed with that judgment, but with some circumspection, stating at [127]:

“On the second of these questions there is, I accept, more room for doubt. Although the ownership/control issue is the same in the Italian proceedings as in the Arbitration Proceedings, it could be said that in the Arbitration Proceedings the issue arises as between Tecnimont and EuroChem NW, whereas in the Italian Proceedings it arises as between Tecnimont and EuroChem Agro. Tecnimont agreed to arbitrate its disputes with EuroChem NW. It made no such agreement in respect of its disputes with EuroChem Agro. But that very strict interpretation of the arbitration agreement ignores the underlying reality. There is no evidence that Tecnimont has any real dispute with EuroChem Agro. Its position in the Italian proceedings is no more than a cover or façade for the real dispute which is between it and EuroChem NW. The Italian Proceedings are no more than a vehicle by which it hopes to engage in a proxy war with EuroChem NW. In my judgment the scope of the ASI was justified.”

The reasons for his conclusion have echoes of the types of consideration frequently invoked in applications for anti-suit injunctions on vexatious and oppressive grounds.

The concern which Lewison LJ referred to is considerably reinforced by the subsequent decision of the Supreme Court in Mozambique v Credit Suisse International [2023] EWCA UKSC 32 when considering whether a stay should be granted under s.9 of the Arbitration Act 1996 in relation to one of the issues in that complex litigation on the basis that it was a matter which the parties had agreed to arbitrate. At [75], Lord Hodge said “if the ‘matter’ is not an essential element of the claim or of a relevant defence to that claim, it is not a matter in respect of which the legal proceedings are brought”, which requires “something more than a mere issue or question that might fall for decision in the court proceedings or in the arbitral proceedings.” At [79]-[80], the Supreme Court approved Blair J’s judgment in ACP v Sacyr SA [2017] EWHC 2228 (Comm) that the question of whether the principal debtor was liable to the creditor, which arose both in the arbitration between them under the construction contract and in proceedings by the creditor against the bank under a guarantee, was not the same “matter” and the parties had not agreed it would only be determined in arbitration, including as between the creditor and the bank. In my view, the Supreme Court’s judgment has significant implications for the reasoning in Tecnimont, at least in its broader formulation.

That brings me, finally, to Renaissance Securities (Cyprus) v Chlodwig Enterprises [2024] EWHC 2843 (Comm) and on appeal [2025] EWCA Civ 369. The case has many similarities with the present case. The defendant sued the claimant in Russia for the return of assets held by the claimant under certain investment service agreements. The claimant had refused to return those assets on the basis that the defendant was sanctioned. In addition to suing the claimant in Russia, the defendant also sued various affiliates of the claimant on the basis of what HHJ Pelling KC described as Russian law “delictal claims for damages based on contract claims that the Second and Sixth Defendants have against Renaissance” (Com Ct [1]). The investment agreements with the claimant contained LCIA arbitration agreements. It is apparent from the first instance judgment that, as here, the Russian claims involved treating the claimant and the affiliates as a single entity liable for each other’s debts, with reference to Article 180 of the Russian Civil Code. At [34]-[39], the Judge undertook a close textual analysis of the arbitration agreement and the surrounding contract, placing particular reliance on the exclusion of rights under the 1999 Act, and concluded that the arbitration agreement did not involve a Third Party Claim Obligation.

In the appeal against that decision, the thrust of Mr Gilmore’s argument for the appellant was that the effect of the LCIA arbitration agreement was not to require the defendant to arbitrate against the affiliates, but to preclude the defendant from suing them for joint and several liability elsewhere than in arbitration. The argument was based on an obligation said to arise as an implied term of the arbitration agreement.

Singh LJ was not persuaded, noting at [44]

“ The fundamental difficulty in the way of this line of argument, in my view, is that it requires the court to imply a negative obligation into the terms of the agreements which is simply not there. It may well be that, considered with hindsight, it would have been preferable (certainly from the Appellant's point of view) if the parties had agreed to include such a term in their agreement but the fundamental problem is that they did not. As is well-established, the function of the court is to construe the agreement which the parties have in fact reached rather than to impose an agreement upon them which it might have been better, particularly with hindsight, for them to reach.”

Singh LJ then went on to address the possibility of anti-suit relief on the vexatious and oppressive basis, a subject with which I deal below.

Males LJ addressed the issue at [77]-[78], stating:

“Although the Respondents characterise those proceedings as involving an independent claim between Russian companies under Russian tort laws, closer examination suggests that this characterisation is at best incomplete. The supposedly wrongful conduct on which the Russian claims are founded appears to be the failure of the companies within the Renaissance group to procure the transfer of the assets held by the Appellant to a Russian entity within the group which would not be subject to western (including UK) sanctions. But the Appellant could not have effected such a transfer without breaching those sanctions. In other words, the Respondents' essential complaint is that the Appellant failed to act in a way which would itself have involved a breach of sanctions (i.e. would have been illegal under English law), and that this somehow gives rise to joint and several liability on the part of other companies within the group.

This may be a valid claim under Russian law. I am prepared to assume that it is. But its artificiality, viewed as a matter of English law, which is the law applicable to the relationship between the parties, is obvious. Its only purpose is to circumvent the parties' arbitration clause. It seems to me to be at least arguable in these rather distinctive circumstances that it is necessary for business efficacy, and is so obvious that it goes without saying, to imply a term that the Respondents would not circumvent the arbitration clause in this way. The Judge concluded at para 40 that the arbitration clause does not apply to claims against either party by a non-party. But the issue here is whether the clauses apply to artificial claims against one party's affiliate by the other party, whose only purpose is to circumvent the obligation to arbitrate. That is a rather different issue. However, as resolution of this issue cannot affect my decision that no injunction should be granted for the reason already stated, I would prefer to leave this point open for decision, if it arises, in a case where it will be decisive.”

Phillps LJ preferred not to express a view in circumstances, particularly given the unsatisfactory state of the evidence before the court ([79]).