In February, UniCredit Bank GmbH ("UniCredit") returned to the English courts to ask for an anti-suit injunction, granted at its own application against RusChemAlliance LLC ("RusChem"), to be varied or discharged. This was prompted by RusChem's actions following the anti-suit injunction, as it obtained a ruling from the St Petersburg court that obliged UniCredit to take all measures within its control to cancel the effect of the English anti-suit injunction or face a penalty of €250 million. In such circumstances, the English court found that it had sufficient power to vary its own final order.
The High Court was faced with three further applications in April from applicants in similar positions to UniCredit, dealt with collectively in Bayerische Landesbank & Others v RusChemAlliance LLC ("Bayerische"). The applicants (Bayerische Landesbank, Landesbank Baden-Württemberg and Commerzbank AG) each obtained anti-suit relief against RusChem and then subsequently applied for such relief to be revoked after being subject to a Russian court order, obliging them to take all measures within their control to cancel the effect of the anti-suit relief or face significant financial penalties.
The High Court followed the approach of the Court of Appeal. As a result, Mr Justice Foxton found there to be no difficulty with the court "immediately revoking the final injunctive relief which the claimants obtained and revoking those orders properly consequential on the granting of the injunctions".
Revoking declarations
In UniCredit v RusChem, UniCredit obtained injunctive relief and three declarations: that the arbitration agreements in question were governed by English law, that the English courts had jurisdiction to determine the claim for injunctive relief, and that the commencement and pursuit of the Russian proceedings constituted and/or constitutes breaches of the arbitration agreements under English law. The applicants in Bayerische obtained the same declarations at first instance.
The Court of Appeal held it had power to revoke the final injunctive relief obtained by UniCredit and to revoke the declarations. However, it decided it was not appropriate to exercise its power to cancel the declarations. The Court of Appeal held that the English court did have jurisdiction to determine what it determined, and consequently its final orders reflecting the decision must stand. It therefore only revoked the injunctive parts of the relief.
The applicants in Bayerische also applied to revoke their injunctive relief, plus the declarations and costs orders made against RusChem. In considering its power to grant this application, the High Court concluded that the Court of Appeal's decision in relation to revoking declarations involved an exercise of discretion and the court did have jurisdiction to revoke all aspects of UniCredit's relief.
However, the High Court was not convinced by any of the arguments made to distinguish Bayerische from the Court of Appeal's decision. Mr Justice Foxton acknowledged "the very real risk if sufficient efforts are not made to revoke the declarations of very significant penalties to the claimants". However, he was also satisfied that this was a feature in UniCredit's case.
The reluctance of both courts to revoke the declarations stems from the consideration of whether the matters were of obvious and direct relevance to the court itself, and not simply to the parties. The declarations were concerned with the position in the past when the English court orders were made and, in the High Court's view, "cannot, in reality, be revoked any more than a bell can be unrung". In reality, the English court in Bayerische did determine at a prior point in time that it had jurisdiction to make an order it made. Mr Justice Foxton distinguished this from orders for injunctive or financial relief, which are of primary concern to the parties and can be impacted by a material change of circumstance. The High Court was satisfied that the declaration relating to the whether there was and continues to be a breach of contract through the pursuit of Russian proceedings was "forward-looking" in a way that the declarations on the court's jurisdiction to make an order in the past was not. Therefore, the events occurring since the declaration (namely, the applicants being subject to the order of the Russian court), amounted to a material change of circumstance that made it appropriate to revoke that declaration.
Similarly, the High Court revoked the costs orders against RusChem, as they "have a forward-looking effect in that they create obligations capable of ongoing enforcement in the future. They are orders that operate exclusively in the claimants' favour, and unlike the declarations about jurisdiction do not intimately concern the court and its power to act".
Finally, the applicants applied for permission to appeal the High Court's order, in keeping with their effort to make every attempt to set aside every part of the orders made by the English court. Mr Justice Foxton refused to grant permission to appeal, finding that there was not a serious issue to be tried or some other reason permitting an appeal. However, the applicants have each now appealed to the Court of Appeal.
Mr Justice Foxton suggested that the position of the applicants may be improved by giving undertakings to be recorded in an order of the English court that they will not seek to rely on the declarations in any way.
Conclusion
Both the Court of Appeal and High Court's decisions show that the courts are willing to exercise a degree of flexibility when asked to revoke anti-suit relief following a party's change of circumstance. However, this flexibility seemingly does not extend to revoking declarations concerned with the court's own powers and jurisdiction. The High Court was unwilling to do so, despite the real risk that, if sufficient efforts were not made by the applicants to revoke the declarations, they may face significant penalties. Mr Justice Foxton expressed his hope that "the Russian courts will understand in the spirit of comity that those declarations are simply the English court recording its view of its jurisdiction applying its law at a particular point in time in the past". It remains to be seen whether the current status of the revocations will be sufficient to release the applicants from the threat of financial penalties.
