Key takeaways from the Supreme Court’s decision in UniCredit v RusChemAlliance

An array of anti-suit injunction cases has been flowing through the courts in recent times. This has been driven in part by Russian legislation which gives Russian courts the ability in certain cases to assert jurisdiction and issue its own anti-suit injunctions, even where parties have agreed on another forum in which to resolve their dispute. One such case is UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30, and the Supreme Court recently issued its widely anticipated judgment.

The case

In summary, the contractual documentation between the parties contained an English governing law clause and provided for ICC arbitration with a seat in Paris. Notwithstanding this, RusChemAlliance commenced proceedings in Russia. UniCredit applied for an anti-suit injunction to restrain these proceedings, which was rejected at first instance but granted by the Court of Appeal.

RusChemAlliance appealed to the Supreme Court, but the appeal was unsuccessful. The issue was whether the English court had jurisdiction to hear the claim for the anti-suit injunction. For that, UniCredit had to show that there was a gateway that entitled it to sue an overseas defendant and that England and Wales was the proper place in which to bring the claim.

The key takeaways

There are a number of key takeaways from the decision, some of which are outlined below:

• A key part of the dispute involved determining the governing law of the arbitration agreement. UniCredit asserted that English law applied and, therefore, that the dispute fell under the gateway for suing an overseas defendant in respect of a contract governed by English law. However, whilst there was an English governing law clause, RusChemAlliance argued that this did not extend to the arbitration agreement itself, not least in circumstances where the seat of the arbitration was different (here, France). The simplest way to avoid such disputes is for contracts to specify the law that governs the parties’ arbitration agreement. Unfortunately, as Lord Leggatt commented, it is rare for this to happen in practice.
• However, the extent to which this will be an issue in similar cases going forwards remains to be seen. Clause 1 of the Arbitration Bill 2024 seeks to introduce a new section to the Arbitration Act 1996 with retrospective effect. If enacted, the law applicable to an arbitration agreement will be the law that the parties expressly agree applies to the arbitration agreement or, where no such agreement is made, the law of the seat of the arbitration in question.
• In the meantime, the judgment provides guidance on the Supreme Court’s own decision in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38. The general rule is that a choice of law to govern a contract will generally be construed as applying to an arbitration agreement incorporated in the contract. The Supreme Court considered that the position would be unduly complicated if this could be displaced by an approach whereby the governing law of the arbitration agreement would be determined by reference to what the law of the courts of the seat of the arbitration would decide.
• As to the test for jurisdiction where a contractual forum had been agreed for disputes, the Spiliada test – whereby jurisdiction should not be exercised if there is another available forum with competent jurisdiction which is the appropriate forum for the matter – was inappropriate. The appropriate starting point for determining the proper place is that there should be a strong reason why the court should not exercise its jurisdiction to restrain a breach of the parties’ contractual bargain. As an anti-suit injunction would not be available in France and any measures within the arbitration would lack coercive power (unlike anti-suit injunctions by the court which can lead to fines and imprisonment for those in breach), that starting point was not displaced here.
• The decision emphasises the English court’s pro-arbitration approach and its willingness to uphold parties’ contractual bargains and restrain proceedings commenced in breach of such bargains. There will need to be a sufficient connection to the jurisdiction to justify intervention; however, the court left open the possibility that personal jurisdiction over the defendant may be enough, even if there is an overseas seat and governing law.