by Matteo Fumagalli, Italian-qualified lawyer with experience in contract law and in domestic and cross-border litigation and arbitration, primarily in civil, commercial, corporate and energy law disputes. Matteo's LinkedIn profile: Matteo Fumagalli | LinkedIn

Introduction

In the aftermath of the withdrawal of the United Kingdom from the European Union in 2020 and the enhancement of sanctions imposed on Russian individuals and entities, anti-suit (“ASI”) and anti-arbitration (“AAI”) injunctions are once again in the spotlight.

ASI and AAI are typically issued by a court (or an arbitral tribunal) in a given jurisdiction to restrain parties from commencing or continuing court or arbitral proceedings brought in another jurisdiction. These measures, originally developed in common law countries, address international lis pendens in parallel proceedings between the same parties before different courts or tribunals, thereby preventing conflicting decisions and res judicata issues.

In civil law systems, ASI are generally unavailable and refused to be enforced, as they are perceived to be in contrast with the State’s sovereignty where their effects are sought.[1] As a result, civil law courts typically refuse their recognition and enforcement. At the same time, those injunctions have been gaining traction elsewhere: UK courts are no longer bound by the case-law of the European Court of Justice (“ECJ”), which has traditionally refused ASI within the European Union. Moreover, Russian courts have recently issued ASI on multiple occasions to prevent arbitral awards from EU seated arbitrations over sanctioned Russian parties.[2]

These shifts force the parties into a daunting dilemma. They can either comply with the ASI (or AAI), thereby avoiding the risk of paying any damages for non-compliance (but sacrificing their jurisdiction - or arbitration - agreement), or disregard the injunction. In the latter scenario, parties risk remaining stranded in sandbanks that might hinder the enforcement of the judgement obtained, unless they submit to one of the islands of enforceability that competing jurisdictions are carving out.

ASI and AAI Within the EU Jurisdictional Framework: The Role of State Courts

The case law of the ECJ, which has exclusive jurisdiction to interpret EU law, is pivotal to understand how ASI and AAI are treated by the courts of such states (most of which are civil law countries). Notably, the ECJ has traditionally concluded that ASI are inconsistent with the principles embedded in the European Union regulations addressing civil procedural matters (and, specifically, in 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters - “1968 Brussels Convention” -, Regulation (EC) no. 44/2001 - “Brussels I Regulation” - and the subsequent Regulation (EU) no. 1215/2012 - “Recast Regulation”).

In particular, the ECJ has consistently established that ASI are in breach of the following principles:

1. Kompetenz-Kompetenz – According to the well-known Turner v Grovit case, decided under the 1968 Brussels Convention, ASI would prevent the courts of other EU Member States from independently assessing their jurisdiction: "(…) a prohibition imposed by a court, backed by a penalty, restraining a party from commencing or continuing proceedings before a foreign court undermines the latter court's jurisdiction to determine the dispute."[3]

2. Mutual trust – In the subsequent West Tankers case, the ECJ established, under the Brussels I Regulation, and applying the principle already stated by the Turner v Grovit case, that the pacta sunt servanda principle - embedded in the parties' obligation to comply with their jurisdiction agreement - should not outweigh the principle of mutual trust between EU Member States' courts and the correspondent right to access justice.[4] Specifically: "[…] in obstructing the court of another Member State in the exercise of the powers conferred on it by Regulation No 44/2001, namely to decide […] whether that regulation is applicable, such an anti-suit injunction also runs counter to the trust which the Member States accord to one another’s legal systems and judicial institutions and on which the system of jurisdiction under Regulation No 44/2001 is based […]".

Upon the passing of the Recast Regulation, ASI may be considered unnecessary, as Article 29 and Article 31, para 2 of said regulation already address issues of simultaneous proceedings - hence, lis pendens - in different jurisdictions of the EU Member States. In fact, the former provision requires any second seized court to stay proceedings until the first court decides on its jurisdiction, while the latter provision mandates a stay when a court is seized according to a jurisdiction clause until the first court denies its jurisdiction. Whether or not this renders ASI redundant, the general prohibition on their issuance remains intact: later cases, such as Nori Holdings[5] - decided by the English and Wales High Court - confirmed that the West Tankers principle survived the enactment of the Recast Regulation.

These conclusions would not be different if EU State courts were to issue AAI. The latter measures are criticized for undermining the efficacy of the international arbitration system and, more specifically, of the sanctity of arbitration agreements.

When considering an AAI, courts should assess the arbitration agreement's existence, validity and, ultimately, its enforceability. Indeed, AAI inherently conflict with the Kompetenz-Kompetenz principle, which empowers arbitral tribunals to determine their own jurisdiction, including the arbitrability of the dispute at hand, thereby undermining the parties’ agreement and thus the pacta sunt servanda principle.

 The principles of mutual trust and Kompetenz-Kompetenz, however, presupposes a system of reciprocal judicial cooperation that is now under strain. As the following sections illustrate, the erosion of that system - driven by Brexit and the reform of the Russian Arbitration Procedure Code ("RAPC") - is precisely what has enabled the emergence of competing islands of enforceability.

ASI Rendered by Arbitral Tribunals: Changing the Order of the Operands Does not Change the Result

ASI issued by arbitral tribunals, like ASI issued by State courts, are unlikely to be recognized and enforced in EU Member States, though for different reasons.

There are no issues of consistency of these measures with the European Regulations, as already clarified by the 2015 Gazprom case,[6] (settled by the ECJ according to the then applicable - Brussels I Regulation), but this does not render them freely enforceable: they face distinct, and equally significant, obstacles under the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards (“NY Convention”). Specifically, the ECJ maintained that: (i) arbitration falls outside the scope of the Brussels I Regulation, hence the principle of mutual trust had not been infringed, having been the injunction awarded by an arbitral tribunal and not by a State court, and (ii) the enforcement of injunctions issued by arbitral tribunals shall be regulated by national arbitration legislations, and by the NY Convention, if applicable.

Such a decision was later crystallized in the Recast Regulation, whose Recital no. 12 and Article 73, para. 2 respectively clarify that arbitration falls outside the scope of such regulation and that the applicability of the NY Convention shall not be impaired by the Recast Regulation.

Under the NY Convention, however, ASI issued by arbitral tribunals might not be enforceable across-borders for two reasons. 

First, to be enforceable, the arbitral award should be final and binding, meaning it settles the dispute over the parties’ substantive rights. However, arbitral awards containing ASI do not meet this requirement, as they aim at preserving the effectiveness of the arbitration agreement which, in turn, defers to arbitration disputes concerning the parties’ substantive rights. 

Second, ASI issued by arbitral tribunals may be refused recognition and enforcement in EU Member States under Article V(2)(b) of the NY Convention on grounds of public policy. In fact, as set out above, the ECJ has considered ASI as violating the principle of mutual trust between EU courts, which is a fundamental principle in the EU law, ultimately falling into EU Member States’ public policy.

Injunctions Coming from English and Russian State Courts: Competing Jurisdiction in the Current Geopolitical Situation

As previously noted, ECJ case law prevents EU State courts from recognizing and enforcing ASI and AAI. 

Post-Brexit, however, these measures issued by English courts are once again in the spotlight since English courts are no longer bound by the Recast Regulation and by the principle of mutual trust between EU State courts. The treatment of injunctions issued by English courts vis-à-vis proceedings in EU State courts creates a critical dilemma: as already noted, litigants must choose between complying with the ASI (or AAI) to avoid potential liability for damages (at the cost of their jurisdictional - or arbitration - agreement), or defying the injunction and facing significant hurdles when attempting to enforce a resulting judgement.

A parallel, enforcement dilemma arises from ASI and AAI rendered by Russian courts.

In 2020, with a view to protect Russian parties from potential impartial treatment in foreign proceedings,[7] Russia passed a reform of the RAPC. The newly reformed RAPC now grants Russian courts exclusive jurisdiction over disputes involving sanctioned Russian entities or whose subject matter is affected by sanctions. Under this framework, parties can seek injunctions against foreign proceedings. Non-compliance with such injunctions render foreign awards unenforceable in Russia and allows such parties to claim damages.

The above RAPC provisions may be in disregard of Article II(3) of the NY Convention, of which Russia is a contracting State, which mandates that courts of contracting States refer parties to arbitration when an existing arbitration agreement is in place. 

Nevertheless, in February 2023,[8] June 2023[9] and March 2024,[10] the Russian lower courts granted three AAI in favour of Russian sanctioned companies, prohibiting proceedings seated in Stockholm and Paris. Although the fate of the targeted arbitration proceedings remains unknown, these injunctions illustrate the consistent way Russian courts implement the RAPC.

The EU's response has been normative. In June 2024 the Council of the European Union (“EU Council”) amended Article 5ab of the (EU) Regulation 833/2014 (14th EU sanction package).[11] Such amendment empowers the EU Council to list companies or individuals that have commenced proceedings before Russian courts in conformity with Article 248 RAPC (hence with the aim to obtain an anti-suit injunction) in Annex XLIII of the aforementioned regulation,  and to prohibit "any direct or indirect transaction" with such listed companies or individuals. This wording provides that payments to said individuals are banned, potentially deterring recognition and enforcement in the EU of Russian ASI. Multinational companies having branches or business in Russia would, however, remain exposed to risks, as the enforcement of such injunctions would not be affected by the EU sanction package.

The well-known RusChem cases involving a Russian joint venture (“RusChemAlliance”) and three German banks (Deutsche Bank AG, Commerzbank AG and UniCredit Bank GmbH – the “Banks”) exemplifies this tangible risk. The dispute arose when RusChemAlliance terminated an engineering contract with a German constructor, triggering enforcement of on-demand bond guarantees issued by the German banks before the Arbitral Court of Saint Petersburg and Leningrad Oblast. These guarantees, governed by English law, contained an ICC Paris arbitration clause.

RusChemAlliance pursued its claims against the Russian branches of the banks before Russian courts, prompting English courts (no longer bound by the principles upheld by the ECJ) to issue ASI as separately requested by the Banks,[12] consistent with the pro-arbitration approach of English courts.

Even though the rationale behind the English courts’ decisions to grant the injunctions cannot be fully elaborated here, it is noteworthy that the English courts asserted their jurisdiction - despite the arbitration clause included in the guarantees - and reasoned that although French law (the applicable law, Paris being the seat of arbitration) does not permit ASI, French courts would not regard these injunctions as an interference with their jurisdiction.

The ASI granted by English courts proved, however, to have limited effect. In spring 2024 the Saint Petersburg and Leningrad Oblast Arbitral Court[13] granted RusChemAlliance with three AAI against the Banks, authorizing the former to seize over USD 700 million in assets held by the Russian Banks’ subsidiaries should they fail to comply with the AAI. This imminent threat of asset loss led the Banks to ultimately seek to discharge or discontinue their respective ASI, with the England and Wales Court of Appeal varying the ASI granted to UniCredit (removing its injunctive relief while retaining declaratory relief) after the Russian court imposed a penalty of approximately €250 million for non-compliance[14] (a coercive outcome made possible by the Banks’ substantial operation exposure in Russia, in stark contrast to RusChemAlliance's absence of assets in the UK).

Conclusions

The increased usage of ASI and AAI, boosted by the RAPC reform, highlights a delicate tension between three approaches. Firstly, the pro-arbitration stance followed by English courts, freed from the constraints of the EU legal framework post-Brexit. Secondly, the refusal of EU State courts to issue, recognize and enforce ASI and AAI, grounded in the principles of mutual trust and Kompetenz-Kompetenz. Thirdly, the assertive jurisdictional expansion of Russian Courts, which has created significant pressure for the parties to either accept Russian jurisdiction or risk obtaining a foreign judgement that Russian courts will refuse to recognise. What emerges from this landscape is a fragmented archipelago of enforceability: competing jurisdictions surrounded by juridical shoals that may render any alternative enforcement route effectively unnavigable.

[1] Stolzenberg v Daimler Chrysler Canada [2005] ILPr 24; Re the Enforcement of an English Anti-Suit Injunction [1997] ILPr 320 (Oberlandesgericht Düsseldorf); Philip Alexander Securities & Futures Ltd v Bamberger [1997] ILPr 73). See also T. Raphael, The Anti-Suit Injunction, Oxford University Press, 2019, 82; A. Briggs, ‘Anti-Suit Injunctions and European Ideals’ (2004) 120 LQR 529; E. Gaillard, “Il est interdit d’interdire: Réflexions sur l’utilisation des Anti-Suit Injunctions dans l’arbitrage commercial international” (2004) Rev Arb 47; L. Radicati di Brozolo, ‘Arbitration and the Revised Brussels I Regulation: Seeds of Home Country Control and of Harmonisation’ (2011) 7 J Priv Intl L 423, 430–32.

[2] Tjumeń Arbitral Court, 20 February 2023, case no. A70-26488/2022; Moscow Arbitral Court, 15 June 2023, case no. A40-94700/23-3-745; Saint Petersburg and Leningrad Oblast Arbitral Court, 15 March 2024, case no. А56-16212/2024; Saint Petersburg and Leningrad Oblast Arbitral Court, 16 May 2024, no. A56-60809/2023; Saint Petersburg and Leningrad Oblast Arbitral Court, 17 May 2024, no. А56-61398/2023; Saint Petersburg and Leningrad Oblast Arbitral Court, 12 July 2024, no. A56-74595/2023).

[3] Judg. 27 April 2004, C-159/02, Gregory Paul Turner v Felix Fareed Ismail Grovit, Harada Ltd and Changepoint SA.

[4] Judg. 10 February 2009, C-185/07, Allianz SpA and Generali Assicurazioni Generali SpA v West Tankers Inc.

[5] Nori Holdings Ltd & Ors v Public Joint-Stock Company 'Bank Otkritie Financial Corporation' [2018] EWHC 1343.

[6] Judg. 13 May 2015, C-536/13, Gazprom OAO v Lietuvos Respublika.

[7] Supreme Court of Russia, 9 December 2021, case no. 309-ЭС21-6955 (1-3).

[8] Tjumeń Arbitral Court, 20 February 2023, case no. A70-26488/2022.

[9] Moscow Arbitral Court, 15 June 2023, case no. A40-94700/23-3-745.

[10] Saint Petersburg and Leningrad Oblast Arbitral Court, 15 March 2024, case no. А56-16212/2024.

[11] Council Regulation (EU) No 833/2014 of 31 July 2014.

[12] Deutsche Bank AG v RusChemAlliance LLC [2023] EWCA Civ 1144 (11 October 2023); Commerzbank AG v RusChemAlliance LLC [2023] EWHC 2510 (31 August 2023); UniCredit Bank GmbH v RusChem [2024] UKSC 30 (18 September 2024).

[13] Decisions respectively on 16 May 2024 (case no. A56-60809/2023), 17 May 2024 (case no. А56-61398/2023), and on 12 July 2024 (case no. A56-74595/2023).

[14] UniCredit Bank GmbH v RusChem [2024] EWCA Civ 99 (11 February 2025).