Vexatious or oppressive? Testing sanctions risk as a factor for an anti-suit injunction

Parties are increasingly seeking anti-suit injunctions (ASIs) from English courts to restrain Russian proceedings. Does the risk of breaching sanctions make foreign litigation 'vexatious or oppressive' for the purposes of an ASI? The recent decision in FH Holding Moscow Ltd. v. AO UniCredit Bank and another [2025] EWHC 3111 (Comm) offers guidance.

The facts

Fashion House Holding Moscow Ltd (FH), a Cypriot company operating in Russia, borrowed funds in 2018 from UniCredit S.p.A. (S.p.A.), an Italian bank, and AO UniCredit Bank (AO), its Russian subsidiary.

The financing was documented under a set of agreements with different governing laws and dispute resolution clauses. While there was a veritable suite of interlinking financial agreements, two documents were critical to FH’s ASI application:

A facility agreement (FA) between FH, S.p.A. and AO, providing Euro and rouble facilities and defining events of default. The FA was governed by English law and contained a Vienna-seated arbitration clause under the Vienna International Arbitral Centre (VIAC) rules. The FA also included a standard sanctions clause, restricting use of proceeds in breach of sanctions.
A mortgage agreement between FH and AO, creating security over Moscow real estate to secure the FA. The mortgage agreement was governed by Russian law and contained an exclusive jurisdiction clause for the Commercial Court of Moscow. It permitted AO to enforce in the Russian courts immediately upon an event of default without requiring any prior action by AO before doing so.

In March 2025, AO began foreclosure in the Commercial Court of Moscow, alleging an event of default under the FA. FH denied default and contested that the dispute fell instead within the Vienna-seated arbitration clause under the FA; it then applied to the English courts for an ASI restraining AO and S.p.A. from pursuing the Moscow proceedings.

The ASI framework: contractual and non-contractual

ASI relief is granted where it is ‘just and convenient’ and the ‘ends of justice so require,’: either on a contractual basis, or on a non-contractual basis where the foreign proceedings are ‘vexatious or oppressive.’

In determining the ‘ends of justice,’ the threefold test from Carron Iron Co Proprietors v Maclaren [1855] 5 HLC 416 has been applied to non-contractual applications:

the English courts are the natural forum for the dispute;
the proceedings to be restrained are vexatious, oppressive or unconscionable; and
it is in the interests of justice to grant an ASI because the foreign proceedings are contrary to equity and good conscience.

Courts tend to avoid defining ‘vexatious or oppressive’ exhaustively. In some cases, a foreign court’s actions may be so extreme that the respect normally owed under comity is not required (Airbus Industrie GIE v Patel and Others [1999] 1 A.C. 119). Regardless, an applicant must first establish that the English court has a connection to the dispute.

Decision

FH advanced both a contractual case and, in the alternative, a vexatious/oppressive case against the backdrop of EU sanctions on Russia.

1) The contractual basis

The issue was whether an event of default occurred and which dispute resolution clause applied.

Where finance and security documents contain potentially inconsistent jurisdiction clauses, English law seeks to give effect to both. Here, the Court found that the dispute over whether an event of default had occurred fell within both jurisdiction clauses; the mortgage agreement permitted enforcement immediately after an event of default, with any disputes (including whether a default had occurred) being resolved by the Commercial Court of Moscow. The foreclosure proceedings therefore did not breach the FA’s VIAC arbitration agreement, so there was no contractual basis for an ASI.

2) The non-contractual basis: ‘vexatious or oppressive’?

FH argued that allowing the Moscow court to order foreclosure could compel it to participate in a blind auction. On FH’s case, this would place it in an impossible position: as a Cypriot company bound by EU sanctions law, the chances of an EU-sanctioned entity being involved in the sale would be very high given the number of EU-designated Russian banks.

Granting an ASI on the non-contractual ground was required under English ‘justice’, FH contended, because UK public policy supports the EU’s sanctions regime against Russia, which effectively mirrors the UK’s own framework.

The English court, however, stressed that outside the contractual basis, ASIs are granted only with great caution. Comity is key, and as confirmed in JP Morgan Securities PLC & others v VTB Bank PJSC [2025] EWHC 1368 (Comm), the English court must have a ‘sufficient interest’ to restrain foreign proceedings.

The judge described the English court’s legitimate interest as 'tenuous', anchored in the FA’s English governing law. The stronger the connection with the foreign court, the weaker the case for intervention; here, the UK public policy of supporting EU sanctions against Russia could not conjure a sufficient interest when none otherwise existed. Moreover, the risk that FH would be compelled to breach EU sanctions was a mere hypothetical. Foreclosure proceedings did not, of themselves, trigger a sanctions breach. Any breach (and any breach of the sanctions clause therein) would depend on subsequent steps, such as an auction and sale, and on decisions by AO or Russian authorities. There was no certainty that any such breach would occur.

Conclusion: a theoretical sanctions risk bears limited weight

The judge considered that the mere existence of a sanctions risk did not create a sufficient English interest where the underlying dispute was overwhelmingly foreign, particularly in circumstances where that risk was remote and contingent.

This approach contrasts with a series of recent cases in which English courts have granted ASIs to restrain Russian proceedings brought in breach of dispute resolution clauses, in the context of Russian countermeasures conferring exclusive jurisdiction on Russian courts over disputes involving sanctioned persons. Those decisions typically addressed attempts to bypass UK/EU sanctions. FH’s case, in contrast, was premised on a hypothetical future breach. Against this background, recent cases show a clear willingness in the English courts to grant ASIs and anti enforcement injunctions on non contractual grounds where (i) there is a sufficient English nexus and (ii) foreign proceedings are deployed to evade, rather than merely risk breaching, UK/EU sanctions. JP Morgan v VTB Bank illustrates that such conduct supplies a ‘sufficient interest’ and confirms that sanctions are a relevant, albeit non-determinative factor in in assessing whether proceedings are vexatious or oppressive, as they engage public policy.

Whether applicants for ASIs who can demonstrate both a sanctions risk and a strong English connection will succeed remains to be tested. This feeds into a broader debate about the proper role of the English courts in sanctions related matters, particularly where Russian courts seek to assume control. In any event, FH Holding makes clear that to bring an appropriate non contractual case for an ASI, applicants should first establish a strong English nexus; a concrete, imminent sanctions risk can then support that application on vexatious/oppressive grounds.

With thanks to Rosie Mennis for her contributions to this article.

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