Unicredit Bank GmbH v Ruschemalliance LLC

Factual and Procedural Background

Company A, a German bank, applied under CPR Part 3.1(7) and the court's inherent jurisdiction to revoke or vary a final anti-suit injunction previously granted against Company B, a Russian corporation. The injunction was initially granted by the Court of Appeal on 29 January 2024 and upheld by the UK Supreme Court on 23 April 2024. Company B supports the application to revoke or vary the injunction.

The dispute concerns four performance bonds and three advance payment bonds governed by English law, with arbitration clauses providing for Paris arbitration. The Court of Appeal had restrained Company B from pursuing claims under the bonds in Russian or other courts outside arbitration, ordered Company B to discontinue Russian proceedings, and restrained enforcement of any Russian court rulings regarding the bonds.

Following the UK Supreme Court order, Company B ceased using English solicitors and obtained a ruling from a Russian court prohibiting Company A from initiating or continuing proceedings outside Russia and imposing a penalty of €250 million if Company A failed to comply. This ruling remains under appeal but has assumed legal force in Russia.

The underlying commercial dispute arose because Company A failed to pay under the bonds when demanded by Company B. Company B had contracted with German contractors for large-scale projects in Russia, some liabilities of which were guaranteed by the bonds. Due to EU sanctions following geopolitical events, the contractors claimed inability to perform contracts or return advances. Company A invoked sanctions as a reason for non-payment.

Company A initiated English proceedings to restrain Russian court claims by Company B and obtained an interim injunction. After a jurisdictional challenge, the Court of Appeal granted a final anti-suit injunction in favor of Company A. The UK Supreme Court confirmed the English court’s jurisdiction over Company A’s claims.

Company A now seeks to revoke or vary the injunction due to Company B’s disregard of the English court orders and changes in Russian law reflected in the Russian court ruling. Company A argues that contempt proceedings would be ineffective as Company B has no assets or officers outside Russia and fears penalties imposed by the Russian court if it does not comply with the ruling.

Related proceedings involve similar injunctions against other German banks, with some having discontinued their English claims. The court agreed to hear the application due to its importance and similarity to other cases.

Legal Issues Presented

1. Whether Company A is at risk of being forced to pay a penalty under the Russian court ruling.
2. Whether the English court has power to revoke or vary a final anti-suit injunction order.
3. Whether Company A has been coerced into making this application and if that affects the court’s discretion.
4. Whether there are English public policy reasons for refusing the application and the weight of such reasons.
5. Whether the application should be allowed and, if so, whether to revoke or vary the Court of Appeal’s injunction order.

Arguments of the Parties

Appellant's Arguments (Company A)

• Company A submits there is a real risk of being held in breach of the Russian ruling, with potentially severe financial penalties.
• Contends that the court has power under CPR Part 3.1(7) to revoke or vary the final injunction in changed circumstances.
• Argues that coercion by the Russian court does not weigh heavily against the application since Company A acts in its own commercial interests.
• Maintains that English public policy considerations do not strongly oppose revocation or variation of the injunction.
• Seeks revocation of the injunctive parts of the order while retaining declaratory jurisdictional findings.

Respondent's Arguments (Company B)

• Supports Company A’s application to revoke or vary the injunction.
• Has obtained a Russian court ruling prohibiting Company A from pursuing foreign proceedings and imposing penalties for non-compliance.
• Has refused to comply with English court injunctions, asserting jurisdictional rights under Russian law.

Advocate to the Court

• Submitted that the Russian court ruling does not necessarily impose penalties unless Company A fails to apply to this English court to revoke the injunction.
• Highlighted that coercion exists but is difficult to assess in this commercial context and does not strongly affect the court’s discretion.
• Noted that public policy interests in enforcing international arbitration agreements (New York Convention) are important but do not prevent variation of the injunction here.
• Observed that UK sanctions do not prevent the court from granting the application.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Terry v. BCS Corporate Acceptances [2018] EWCA Civ 2422	Rarity of revoking or varying final orders under CPR 3.1(7) due to importance of finality	Recognized that circumstances to vary final orders are very rare but not impossible
AIC Ltd v. Federal Airports Authority of Nigeria [2022] UKSC 16	Finality principle in reopening appeals; tests under CPR Parts 52.30 and 3.1(7)	Confirmed that reopening final orders requires exceptional circumstances and no alternative remedy
Vodafone Group plc v. IPCom GmbH & Co KG [2023] EWCA Civ 113	Limits on discharging final sealed orders under CPR 3.1(7), with possible exception for continuing orders like injunctions	Supported view that final anti-suit injunctions may be varied or discharged in exceptional cases
R (on the application of Gregory) v. City University [2016] EWCA Civ 898	Requirements for reopening Court of Appeal orders under CPR Part 52.30	Indicated that reopening final orders requires necessity to avoid real injustice and exceptional circumstances
SA v. FA [2017] EWHC 1731 (Fam)	Setting aside consent orders on grounds of duress	Referenced to illustrate that coercion as a factor is generally limited and context-specific
Re Cabot Financial (UK) Ltd [2021] EWHC 789 (Ch)	Possibility of varying injunctions following changed circumstances	Supported analogy that final injunctions can be varied if circumstances change
Madison CF UK v. Various [2018] EWHC 2786 (Ch)	Similar to Re Cabot Financial regarding variation of injunctions	Provided additional support for court’s power to vary injunctions

Court's Reasoning and Analysis

The court first examined whether Company A faced a real risk of penalty under the Russian ruling. It concluded that while the Russian court requires Company A to take all measures within its control to cancel the English injunction, the risk of penalty depends on Company A’s conduct and how the Russian court interprets that conduct. This risk, though real, is not determinative but is a relevant factor.

Regarding the court’s power to revoke or vary a final anti-suit injunction, the court recognized the importance of finality but found that CPR Part 3.1(7) expressly permits variation or revocation of orders. The court noted that final anti-suit injunctions, especially in jurisdictional disputes, are unique and that commercial parties should be able to seek variation in changed circumstances. The court relied on authorities confirming that reopening final orders is exceptional but possible, particularly in cases involving continuing orders like injunctions.

On coercion, the court acknowledged that Company A was under commercial pressure due to the Russian ruling but found no precedent where such coercion barred the court from granting relief. Company A is a sophisticated commercial entity acting in its own interests, so coercion did not weigh heavily against the application.

The court considered English public policy concerns, including the potential pressure from a foreign court, compliance with the New York Convention, UK sanctions, and Company B’s contempt of English court orders. It concluded that the Russian ruling was an in personam order not directed at the English court and that accession to the application would not condone a breach of international law. UK sanctions did not prohibit the relief sought, and although Company B’s refusal to comply with English orders was disapproved, it did not justify refusal of the application.

Balancing these factors, the court found that Company A’s commercial interests, the limited weight of coercion, and the modest public policy concerns favored granting the application. It decided to vary the Court of Appeal’s order by discharging the injunctive parts while retaining the declaratory jurisdictional findings.

Holding and Implications

The court’s final decision was to ALLOW the application by Company A and to VARY the Court of Appeal’s order by discharging the injunctive parts related to the anti-suit injunction, while preserving the declaratory parts affirming the English court’s jurisdiction.

The direct effect is that Company A is no longer restrained by the English court injunction from pursuing claims under the bonds outside English courts, reflecting changed circumstances and Company B’s disregard of the injunction. No new precedent was set beyond confirming the court’s power to vary or revoke final anti-suit injunctions in appropriate cases. The ruling preserves the principle of finality but recognizes flexibility in exceptional commercial jurisdictional disputes.