THE AUTHOR:
Serena Lee, Barrister at Five Paper
The law in England regarding when a party to an arbitration agreement can obtain an anti-suit injunction restraining its counterparty from suing its (non-party) affiliate in another forum is uncertain. The Court of Appeal’s decision in Renaissance Securities (Cyprus) Limited v ILLC Chlodwig Enterprises (“Renaissance”) [2025] EWCA Civ 369, 3 April 2025, has further complicated matters.
The Context
Anti-suit injunctions are granted by the English courts:
- To enforce the negative contractual duty under an arbitration or jurisdiction agreement not to litigate a dispute falling within its scope in another forum (the “Contractual Ground”);
- To enforce a ‘quasi-contractual’ analogue of that duty (see here); or
- In response to conduct regarded as ‘vexatious and oppressive’ (the “V&O Ground”).
There is limited guidance on when an arbitration agreement should be construed to prohibit a party from suing its counterparty’s affiliate, thereby enabling relief to be obtained on the Contractual Ground. The decided cases have largely involved jurisdiction clauses, but it has been assumed, without much analysis, that the same principles apply to arbitration agreements: Cupreus Sarl v. Whiteshell Group [2023] EWHC 3449 (Comm).
In the leading case before Renaissance, Clearlake Shipping v Xiang Da Marine [2019] EWHC 2284 (Comm), the High Court had to confront two conflicting authorities. Lord Scott, in Donohue v Armco [2001] UKHL 64, said obiter (paras 60-62) that jurisdiction clauses should normally be interpreted to encompass tort claims for which a non-party was alleged to be jointly liable with a party. Subsequently, in Cavendish v Ghossoub [2017] EWHC 2401 (Comm), it was held (paras 69-84) that a jurisdiction clause should presumptively be construed only to cover claims between the parties to it, and Lord Scott’s dictum was not followed. Burrows QC (then a deputy High Court judge) in Clearlake sought to reconcile both propositions by reasoning that they were both valid, and all depended on construing the clause in context (para 24). The resulting position was uncertain.
The Facts
The injunction claimant, Renaissance Securities (“C”), entered into six investment service agreements (“ISAs”) with six Russian companies (“Ds”) respectively. Pursuant to the ISAs, C held assets owned by Ds (the “Assets”). Each ISA was governed by English law and contained arbitration agreements providing for LCIA arbitration seated in London (the “AAs”).
A dispute arose between the parties when Ds directed C to return the Assets, but C refused on the ground that it considered Ds to be subject to UK and US sanctions. Ds brought claims in Russia against C for breach of contract. C then successfully applied to the English courts for an anti-suit injunction restraining Ds from continuing those proceedings.
Subsequently, two of the Ds (“Rs”) brought delict claims in Russia against three corporate affiliates of C (the “Affiliates”), contending that the Affiliates were jointly and severally liable for C’s breaches of the ISAs by virtue of their affiliation with C (the “Delict Claims”). C applied to the English courts to amend the anti-suit injunction to restrain Rs from pursuing the Delict Claims, invoking both the Contractual and the V&O Ground. C argued that Rs’ bringing of the Delict Claims:
- Constituted breaches of the AAs; and
- Alternatively, were ‘vexatious and oppressive’, having been brought to circumvent the AAs, the original injunction, and UK sanctions laws.
At first instance, the High Court refused relief. Rejecting the Contractual Ground, HHJ Pelling KC reasoned that the AAs could not be construed to prohibit Rs from suing the Affiliates, because (inter alia) the AAs required “the Parties” – defined as C and Rs – to negotiate prior to arbitration, stated that any award was binding between “the Parties”, and the ISAs excluded third party rights. On the V&O Ground, the judge held that Rs’ conduct was not ‘vexatious and oppressive’ because there was no alternative forum for the Delict Claims.
The Court of Appeal’s Decision and Reasoning
By the time of the appeal, two of the Affiliates had been sold by C, and the third Affiliate denied being affiliated with C. Rs contended on appeal that there was no risk of C being held liable for the Delict Claims in the Russian proceedings. C argued in response that it still faced the risk of joint or contributory liability, but refused to adduce the contracts for the sale of the two Affiliates, despite there being an order permitting C to file further evidence.
The Court of Appeal dismissed the appeal. Addressing the Contractual Ground, Singh LJ held that:
- C’s position required the implication of a term into the AAs prohibiting Ds from bringing the Delict Claims against the Affiliates; and
- No such term could be implied under the usual tests in Marks and Spencer v BNP Paribas [2015] UKSC 7. According to Singh LJ, it was discernible that the parties simply did not cater for that eventuality, and a court could not “rewrite” their contract with hindsight (paras 44-48).
On the V&O Ground, Singh LJ held the High Court had erred in conceiving that an alternative forum for Rs’ claims had to exist before anti-suit relief was available. Nevertheless, and whilst an injunction could “in principle” be issued where a party’s actions compromised the “integrity of the arbitral process”, relief could not appropriately be granted because the “evidential picture” was “far from clear” (para 71). The sale agreements, which C had failed to adduce, were needed for the Court properly to assess whether C was at risk of being made liable, as they might have made provision for liabilities arising from the Delict Claims (paras 68-72).
In a separate judgment, Males LJ agreed that C’s refusal to adduce the sale agreements ipso facto justified denying relief, remarking that the Court was “invited to grant an anti-suit injunction while being deliberately kept in the dark” (para 75). Males LJ noted that, although there was a “powerful case” that Rs’ pursuit of the Delict Claims was ‘vexatious and oppressive’, the answer might still depend on “information […] withheld from [the] court” (para 76).
Addressing the Construction Ground obiter, Males LJ observed that it was “at least arguable” that a term could be implied into the AAs precluding Rs from bringing “artificial” claims against an affiliate “whose only purpose is to circumvent the obligation to arbitrate”. Nevertheless, the judge chose to reserve the point for decision in a case “where it will be decisive” (paras 77-78).
The third judge, Phillips LJ, reasoned that it was unnecessary to determine the substantive issues, since C’s refusal to provide material evidence justified denying relief (para 79).
Analysis
The Court of Appeal’s judgment is noteworthy in three respects.
First, Renaissance is the first time that an appellate court has had the opportunity to address the correctness of Clearlake. Nevertheless, whilst Singh LJ cited the relevant passages in Clearlake in passing (paras 21-22), it remains unclear to what extent the Court regarded its guidance – particularly its apparent endorsement of Lord Scott’s dictum in Donohue – to be applicable to arbitration agreements. That represents a missed opportunity. The Court should have clarified that Lord Scott’s dictum – that parties normally intend for non-party joint tortfeasors also to be sued in the selected forum, lest “forum-fragmentation” should occur – is inapposite for arbitration agreements, because non-parties cannot normally be pursued in arbitration. It is strongly arguable that only Ghossoub should apply.
Second, the difference between Singh and Males LJJ’s reasoning on whether an ‘anti-abuse’ term could be implied into the arbitration agreements will have to be resolved in a subsequent case. There is some force in Males LJ’s observation that a term prohibiting Rs from bringing an “artificial” claim to circumvent the AAs could arguably be implied on business efficacy grounds. Courts are known to imply terms preventing a party from defeating the intended purpose of a contractual mechanism (e.g. Tesco Stores Ltd v USDAW [2024] UKSC 28,para 43-45). It would also be consistent with the policy of English law to deduce that the parties intended that their arbitration agreement should not be “significantly undermine[d]” (cf. Enka v Chubb [2020] UKSC 38). Lest it be objected that this jeopardises the consensual nature of arbitration, an ‘anti-abuse’ term will not result in third parties being bound or entitled to arbitrate, as Males LJ recognised (para 78). It simply prohibits parties from litigating “artificial” claims against non-parties, without creating rights or duties for non-parties.
Third, it might be surmised from Singh and Males LJJ’s remarks on the strength of C’s position that, had C adduced sufficient evidence, the Court would have granted the injunction on the V&O Ground (see paras 55 and 76). Such a conclusion would have been orthodox. “[P]rocedural manoeuvre[s] designed to evade” a jurisdiction clause were held to be ‘vexatious and oppressive’ in Clearlake (para 34(ii); compare Asiana Airlines v Gate Gourmet Korea Co Ltd [2024] SGCA(I) 8, para 77). The same should apply for arbitration agreements (cf. Giorgio Armani SpA v Elan Clothes Co Ltd [2019] HKCFI 2983, para 33).
ABOUT THE AUTHOR
Serena Lee is a barrister at Five Paperchambers in London. Prior to transferring to the Bar (England & Wales), Serena was an associate at a US law firm from 2019 to 2023, where she specialised in investment treaty and commercial arbitration. Serena has a professional interest in international arbitration and has written about international arbitration-related topics for journals such as the ICSID Review, Arbitration International, the Journal of International Dispute Settlement, and the Lloyd’s Maritime and Commercial Law Quarterly.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
