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Part 2: Unicredit – Governing Law and Appropriate Forum

The Court of Appeal’s decision in Unicredit provided clafication that English Courts may be able to provide Anti Suit Injunction (“ASI”) relief even where the arbitration does not have an English seat, when the Court is satisfied that it has personal jurisdiction over the defendant.

The courts should also be the proper forum for the claim. However, provided these two requirements are satisfied, it is clear that the English Courts will take a robust and proactive role in upholding the negative promise contained in arbitration agreements not to litigate in another jurisdiction.

Unicredit: The Background

The Unicredit case arose out of materially the same facts as Commerzbank and SQD/Deutsche Bank (which are set out in Part 1 of this series). Unicredit had also provided bonds, on behalf of Linde, to RusChemAlliance (“RCA”). The bonds provided for English governing law and ICC arbitration agreement, seated in Paris. A dispute arose concerning payment under the bond and RCA issued proceedings in Russia, in breach of the arbitration agreement, citing Article 248.1 of the new Arbitrazh Code and seeking payment of €443m.

First Instance Decision

At first instance, Teare J held that the English Court did not have jurisdiction to grant a final ASI in favour of Unicredit – firstly, because the arbitration agreement was not governed by English law, but by French law as the seat of the arbitration, and secondly, because the English court was not the appropriate forum, since Unicredit could seek substantial justice via arbitration in France.

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Kit Smith (Managing Associate) is a member of Keidan Harrison’s Dispute Resolution team.