JP Morgan Securities Plc & Ors v VTB Bank PJSC

Factual and Procedural Background

This is an anonymized summary of an appeal decided by an appellate court addressing whether the court may grant anti-suit injunctions to restrain foreign proceedings as vexatious and oppressive.

Following an international invasion in 2022, sanctions were imposed on the Appellant. Two Respondents (Company A and Company B) invoked contractual rights to close out positions and accounts held for the Appellant in the jurisdiction, producing frozen balances (including US$81,333,185.01 held by Company A under a Client Agreement and precious metals held by Company B under an Unallocated Metals Account Agreement ("the UMAA")).

The relevant product contracts were governed by English law and contained London arbitration clauses; there were also broader Terms of Business revised in 2017 ("the 2017 Terms") that on their face allowed affiliates to invoke arbitration rights.

On 7 October 2024 the Appellant commenced two sets of proceedings in a domestic court of a foreign state against Company A, Company B and other members of the same corporate group (including Company D, a company incorporated in that foreign state). The foreign claims were framed as tortious claims under that state's law and invoked local statutory provisions asserting exclusive jurisdiction and group-wide liability in response to sanctions.

Company A and Company B issued parallel English proceedings seeking declaratory relief and anti-suit injunctions; interim anti-suit injunctions were granted and continued to final hearing. After hearing, Judge Foxton declared the arbitration agreements valid and granted final injunctions restraining the Appellant from pursuing the foreign proceedings (or enforcing any foreign judgment), having found that the foreign claims (including a later ISDA-related claim) were pursued in breach of the arbitration clauses or were otherwise vexatious and oppressive. The Appellant appealed; permission to appeal was granted in part.

The appellate court heard argument and announced that the appeal would be dismissed.

Legal Issues Presented

1. Whether the court has power to grant anti-suit injunctions to restrain foreign proceedings on the basis that those proceedings are vexatious and oppressive.
2. Whether non-signatory affiliates of the Respondents (members of the same corporate group) are contractually entitled to invoke the LCIA arbitration clause in the 2017 Terms.
3. Whether the foreign tort claims against a group affiliate incorporated in the foreign state (Company D) were vexatious and oppressive such as to justify anti-suit relief.
4. Whether, even if the contractual and vexation/oppression findings were correct, the Judge should have exercised his discretion not to grant injunctions restraining the foreign proceedings.

Arguments of the Parties

Appellant's Arguments

• The Judge erred in treating the English court's "sufficient interest" as coterminous with, and dispositive of, the comity inquiry; "sufficient interest" should be necessary but not sufficient.
• The claims against affiliates in the foreign state were tortious claims under foreign law and not contractual breaches of English arbitration clauses, so the description of them as "circumventing" arbitration was flawed.
• The 2017 Terms could not be read to allow non-parties to specific product contracts to invoke arbitration in respect of disputes governed by those specific contracts, because clause 1.3 gave priority to product contracts where there was conflict.
• Even if the Judge was wrong on the above, he should have declined to exercise his discretion to grant injunctions.

Respondents' Arguments

• The Judge correctly found the arbitration agreements to be valid and binding and that the 2017 Terms permitted affiliates to enforce arbitration rights.
• The foreign proceedings were being used to circumvent English law dispute resolution provisions and the English sanctions regime and were therefore vexatious and oppressive.
• The appellate court need not consider additional matters raised in the Respondents' Notice for the purposes of deciding the appeal.

Table of Precedents Cited

Court's Reasoning and Analysis

The appellate panel (Judge Phillips, Judge Lewison and Judge Henderson) reviewed the Judge Foxton's findings and reasoning and concluded as follows, based exclusively on the material in the opinion:

1. Contract interpretation: The Judge's detailed analysis of the UMAA, the Client Agreement and the ISDA Master Agreement established that the specific product agreements were governed by English law and their arbitration clauses covered the tortious claims pursued in the foreign proceedings; clause drafting oddities did not undermine those conclusions. The 2017 Terms expressly allowed "Affiliates" to enforce provisions conferring benefits on them. The court held there was no conflict between the 2017 Terms and the product contracts and that they could be given effect together, so affiliates could invoke the LCIA arbitration clause in the 2017 Terms.
2. Sufficient interest and comity: The court explained that "sufficient interest" is the lens through which comity is assessed—both concepts form parts of the same enquiry as to whether interference with foreign process is justified. Authorities (including Airbus) show that sufficient connection with the English forum is required to justify anti-suit relief despite comity concerns.
3. Vexation and oppression analysis: Applying the SAS principles and related authorities, the Judge held that the foreign proceedings were being used to circumvent English dispute resolution provisions, applicable English law and the English sanctions regime. The foreign statutory and judicial framework applied retrospective and group-wide liability rules that displaced contractual privity and corporate personality (described as an "unnatural law"), aimed specifically at evading English law and London arbitration clauses. Those matters, together, established a sufficient interest of the English court and justified relief on vexation/oppression grounds.
4. Application to affiliates in the foreign state (Company D): Because the 2017 Terms gave affiliates a right to arbitrate "any dispute" arising in relation to the relationship, affiliates (other than Company D which did not invoke the clause) could rely on those terms; the claims against Company D in the foreign court were part of the same circumvention and thus could be restrained as vexatious and oppressive.
5. Discretion: Having found entitlement to relief on contractual and vexation/oppression grounds, the Judge's exercise of discretion to grant injunctions was upheld; the appellate court found no error in his approach or conclusion and rejected the Appellant's arguments that the injunctions should have been refused in the exercise of discretion.

Holding and Implications

DISMISSED — the appeal was dismissed.

Consequences: The appellate court affirmed the orders below: the arbitration agreements were valid and affiliates were entitled to invoke the LCIA arbitration clause in the 2017 Terms, and final anti-suit injunctions restraining the Appellant from pursuing the specified foreign proceedings (including against the affiliate incorporated in the foreign state) were appropriate on the grounds that those proceedings were vexatious and oppressive. The decision upheld the Judge's exercise of discretion. The opinion does not announce that it sets a new legal precedent beyond applying and endorsing existing authorities and principles cited in the judgment.