The new LCIA Rules do not preclude applications for anti-suit relief

Mace (Russia) Ltd v Retansel Enterprises Ltd & Anor, 28 April 2016 (unrep)

In this unreported Commercial Court decision last week, Phillips J granted the Claimant an anti-suit injunction to restrain the Defendant from proceeding with an arbitration in Russia in breach of a London arbitration clause.

The case is interesting for two points: the grant of an anti-suit injunction despite a material non-disclosure ex parte; and the decision that the new LCIA Rules do not preclude applications for anti-suite relief.

Ex parte injunction set aside but fresh injunction granted

The original ex parte injunction that the Claimant had obtained was set aside by Phillips J for material non-disclosure (i.e. a failure of the Claimant to comply with its duty of full and frank disclosure). The Claimant’s application had been partly based on the fact that a hearing in the Russian reference, which the anti-suit injunction was sought to restrain, was due to take place imminently. However, among other things, the Claimant failed to disclose Russian law advice it had obtained to the effect that the Russian hearing date could have been postponed.

Interestingly, despite discharging the original injunction, Phillips J nevertheless granted the Claimant a fresh injunction over the Russian reference.  He held that pursuing the foreign reference remained a breach of the London arbitration clause, and/or constituted vexatious and oppressive conduct.

Thus, whilst a failure to comply with the duty of full and frank disclosure will likely lead to an injunction being set aside, it is not necessarily fatal to a party’s prospects of obtaining a further injunction.

The LCIA Rules do not preclude an anti-suit injunction

The Defendant had argued that Article 25.3 of the new (2014) LCIA Rules precluded the parties from approaching the English Court for interim relief, including an anti-suit injunction, until permission to do so had been obtained from the Tribunal.

Phillips J held that whilst Article 25.3 of the LCIA Rules was fatal to a party’s ability to apply to the Court for an interim remedy under section 44 of the Arbitration Act 1996, that did not matter in the case of an anti-suit injunction, which one could only obtain pursuant to section 37 of the Senior Courts Act 1981 (in light of the Supreme Court’s decision in AES Ust-Kamenogorsk Hydropower PLant LLP v Ust-Kamenogorsk Hydropower PLant JSC [2013] UKSC 35; [2013] 1 WLR 1889).

The LCIA Rules therefore do not remove the English Court’s jurisdiction to grant anti-suit relief in an appropriate case.