Of Conflicting Laws and Recognition: Unicredit Bank GmbH v Ruschemalliance LLC

In Unicredit Bank GmbH v Ruschemalliance LLC decided that the commercial court had jurisdiction to grant an anti-suit injunction to restrain litigation in the Russian Federation where a contract was governed by English law with a provision for arbitration in Paris.

Facts

The case arose because the Respondent in the appeal Ruschemalliance LLC (RCA) was pursuing claims for payment in the Arbitrazh Court in St Petersburg and Leningrad Region under certain on demand bonds issued by the Unicredit Bank (UB) irrespective of the existence of the arbitration clauses in the bonds. The Commercial Court decided against UB because the arbitration agreement was not governed only by English law, but by French law as the seat of the arbitration was Paris and therefore the English court was not the appropriate forum. The problem here was that the arbitral proceedings under the ICC rules in France would be ineffective since there was nothing to stop the Russian court proceeding since French courts had no process of anti-suit injunctions. In England the High Court has such power.