Barclays Bank Plc v PJSC Sovcombank

JurisdictionEngland & Wales
JudgeMr. Justice Foxton
Judgment Date24 May 2024
Neutral Citation[2024] EWHC 1338 (Comm)
CourtKing's Bench Division (Commercial Court)
Docket NumberCase No: CL-2024-000184
Between:
Barclays Bank Plc
Claimant/Applicant
and
(1) PJSC Sovcombank
(2) LLC Sodeistvie Mezhdunarodnym Raschetam
Defendants/Respondents

[2024] EWHC 1338 (Comm)

Before:

Mr. Justice Foxton

Case No: CL-2024-000184

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

KING'S BENCH DIVISION

COMMERCIAL COURT

The Rolls Building

7 Rolls Buildings

Fetter Lane

London EC4A 1NL

Ms. Louise Hutton KC and Ms. Ellen Tims (instructed by Simmons & Simmons LLP) appeared for the Claimant/Applicant.

The Defendants/Respondents were not present and were not represented.

Approved Judgment

Mr. Justice Foxton
1

This is an application before me today for final injunctive relief, both in the form of an anti-suit injunction and an anti-enforcement injunction, and also for declaratory relief arising out of a syndicated loan agreement (“the Facility”) entered into by the claimant Barclays Bank Plc (“Barclays”), with the first respondent PJSC Sovcombank (“Sovcombank”).

2

By way of brief background, the second respondent, who has been referred to as AIS, is an independent corporate entity formed out of the business of the first respondent, Sovcombank. The Facility is governed by English law, and clause 45.1 gives the English courts exclusive jurisdiction in all relevant respects so far as actions brought by Sovcombank are concerned, albeit in the usual way in finance documents Barclays would have the ability to commence proceedings elsewhere if it so wished.

3

The immediate cause of the present dispute is sanctions imposed as a matter of English law, which, as I shall explain, I am satisfied had the legal effect of preventing Barclays from making payments to Sovcombank under the Facility.

4

Against that background, Sovcombank commenced proceedings in Russia, seeking damages for the non-payment of amounts it claimed were due under the Facility, relying upon various provisions of the Russian Civil Code which give rise to what, under English law, would be regarded as tort-based remedies: in particular for abuse of rights under Article 10.1 of the Russian Civil Code, but also referring to negligence. It is the position of Barclays that those proceedings involved a breach of the exclusive jurisdiction clause in the Facility. On that basis, it obtained a without notice anti-suit injunction from HHJ Pelling KC. He gave fairly extended reasons for his conclusion in a judgment with a neutral citation number [2024] EWHC 834 (Comm). The return date came, and although a letter had been written by AIS in advance of that return date, referring to the difficulties of being able to instruct English legal representatives due to sanctions, there has otherwise been no response or participation by either Sovcombank or AIS to these proceedings. The injunction was renewed by HHJ Pelling KC on the return date.

5

As I have indicated, the application before me is for final relief.

6

I am satisfied that the claim brought in Russia, seeking damages for alleged non-payments under the Facility, is one that falls full square within the exclusive jurisdiction clause in clause 45.1. It is also clear that AIS, as assignee, exercising derivative rights obtained from Sovcombank, is in no better position than Sovcombank when seeking to enforce assigned rights arising out of or relating to the Facility.

7

It is clear to me, and certainly I am persuaded on the balance of probability, that the pursuit of the proceedings in Russia is occurring in breach of the exclusive jurisdiction clause. In those circumstances, a long line of cases in this court make it clear that the court will ordinarily grant injunctive relief to enforce the parties' contractual bargain, unless strong reasons for not doing so are shown. There are no strong reasons in this case.

8

I can confirm that I am content to adopt the reasons that HHJ Pelling KC gave in his judgment for reaching the same conclusion. In particular, there has been no significant delay in this case. We are at a relatively early stage of the Russian proceedings. It cannot be said that there have been any lack of clean hands on behalf of the applicant. While there has been some suggestion by AIS in correspondence that it may be in difficulty in obtaining English legal representation, there has been a significant period in which it has been able to invoke the licence provisions by which it is possible to instruct English lawyers, notwithstanding the effect of sanctions. There has been no sufficient evidence before me that it is, in truth, not practicable for AIS to retain English lawyers to respond to this application, and I have concluded that the more likely reason for its non-participation is a considered decision not to participate because it has taken the view that it will focus its attentions on the Russian proceedings.

9

I am also satisfied it is just and equitable to grant the anti-suit injunction sought. The English court will, in almost all cases, uphold the parties' agreement to exclusive English jurisdiction.

10

The second head of relief sought is an anti-enforcement injunction. That, at one stage, was a relatively rare beast in English civil procedure, although it is fair to say reports of sightings have significantly increased against the background of ongoing events arising from the Russian/Ukraine conflict. It is possible to find cases, and Ms. Hutton KC has very properly drawn them to my attention, stressing that the grant of an anti-enforcement injunction (i.e. one that would prevent a judgment creditor, who has obtained a judgment in proceedings brought abroad from taking steps to enforce that judgment) would be an exceptional measure.

11

More recent cases, and in particular I am referring to SAS Institute Inc v World Programming Ltd [2020] EWCA Civ 599, have made it clear that there is no separate jurisdictional requirement of “exceptionality” over and above the reasons for granting anti-suit injunctive relief, but, in practice, it is likely to be a rare case in which it will be possible to persuade a court to grant such an injunction.

12

In this case I am satisfied that the anti-enforcement relief sought is appropriate. First, the facts of this case appear to be full square with those in the Deutsche Bank v RusChemAlliance LLC [2023] EWCA Civ 114, a decision of the Court of Appeal to which Ms. Hutton KC took me. Although the anti-enforcement injunction application was dealt with briefly in the Court of Appeal's judgment at paragraph 43, the court made it clear that it was appropriate to grant the AEI because the effect of the...

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