G (A company incorporated under the laws of Germany) v R (A company incorporated under the laws of the Russian Federation)

. This is the trial of an action for final anti suit relief. I have heard the argument today and a decision is required urgently because of a hearing scheduled in Russia next week.

. In view of that urgency, I give my decision and reasons now, albeit in a shorter form than is usual when one reserves judgment.

. I take the factual background from paragraphs 12 to 14 and paragraphs 16 to 21 of the defendant's skeleton argument, which I do not understand to be in dispute. Those paragraphs are to be regarded as set out in this judgment.

. Clause 11 of the bonds provides as follows:

“This bond and all non-contractual or other obligations arising out of or in connection with it shall be construed under and governed by English law.”

. Clause 12 of the bonds provided as follows:

“In case of dispute arising between the parties about the validity, interpretation or performance of the bond, the parties shall cooperate with diligence and in good faith, to attempt to find an amicable solution. All disputes arising out of or in connection with the bond which cannot be resolved amicably, shall be finally settled under the rules of arbitration of the International Chamber of Commerce, the ICC, by one or more arbitrators appointed, in accordance with the said ICC's rules. The place of arbitration shall be Paris and the language to be used in the arbitral proceedings shall be English.”

. I take the procedural background from paragraphs 20 to 31 of the claimant's skeleton argument, which I do not understand to be in dispute. Those paragraphs are to be regarded as set out in this judgment.

. The defendants have challenged the jurisdiction of this court. It is common ground that there must be a jurisdictional gateway. The gateway relied upon is that the claim is made:

“In respect of a contract, where the contract is governed by the law of England and Wales.”

. Thus the question is whether the arbitration agreement is governed by English law. The claimant says that it is; the defendant says that it is not.

. If it is, the next question is whether the English court is the proper forum for the claimant's claim to an anti suit injunction. The claimant says that it is; the defendant says that it is not.

. I deal first with the governing law of the arbitration agreement. The manner in which choices of law are to be construed is explained and summarised in the judgment of the Supreme Court in Enka v Chubb [2020] WLR 4117.

. The guidance which the Supreme Court has given is set out in paragraph 170 of the judgment of Lord Hamblen and Lord Leggatt. Of particular importance to what I have to decide are paragraphs 4, 5 and 6. Paragraph 4 provides:

“Where the law applicable to the arbitration agreement is not specified, a choice of governing law for the contract will generally apply to an arbitration agreement which forms part of the contract.

5: “The choice of a different country as the seat of the arbitration is not, without more, sufficient to negate an inference that a choice of law to govern the contract was intended to apply to the arbitration agreement.

6: “Additional factors which may, however, negate such an inference and may, in some cases, imply that the arbitration agreement was intended to be governed by the law of the seat, are (a) any provision of the law of the seat which indicates that where an arbitration is subject to that law, the arbitration [and the parties agree the word ‘agreement’ should be inserted] will also be treated as governed by that country's law; or (b), the existence of a serious risk that if governed by the same law as the main contract, the arbitration agreement would be ineffective. Either factor may be reinforced by circumstances indicating that the seat was deliberately chosen as a neutral forum for the arbitration.”

. I was at one stage attracted by the argument that in the light of the doctrine of severability, clause 11 was not expressed so as to extend to the separate arbitration agreement but I have been persuaded by Mr Houseman that that is not the correct approach. I do not think that there is any substantial disagreement by Mr Gunning in that regard. Indeed, Mr Gunning referred me to paragraph 61 of the judgment of Lords Hamblen and Leggatt, which said as follows:

“The Court of Appeal justified its approach on a ground that a choice of law to govern the contract has little, if anything, to say about the arbitration agreement law choice because it is directed to a different and separate agreement. This was said to follow from the doctrine that an arbitration agreement is separable from the rest of the contract. In our view this puts the principle of separability of the arbitration agreement too high. For reasons given earlier, the requirement that an arbitration clause is to be treated as a distinct agreement for the purpose of determining its validity, existence and effectiveness, makes it more amenable than other parts of a contract to the application of a different law. The rationale underlying the separability principle is also relevant, as we will mention later, in cases where applying the governing law of the contract to the arbitration clause would render the arbitration agreement invalid or ineffective. But it does not follow from the separability principle that an arbitration agreement is generally to be regarded as a different and separate agreement from the rest of the contract or that a choice of governing law for the contract should not generally be interpreted as applying to an arbitration clause.”

. So it appears to me that severability has little traction, when one is construing a choice of law clause and that, indeed, appears to be the effect of their Lordships' guidance in paragraph 170(iv) which says, as I have already quoted:

“Where the law applicable to the arbitration agreement is not specified, a choice of governing law for the contract will generally apply to an arbitration agreement which forms part of the contract.”

. That is the starting point. What their Lordships describe as the inference may be negated in the circumstances set out in clause 6 of paragraph 170 and in this case, the court is concerned with the first of those two circumstances, namely any provision of the law of the seat which indicates that where an arbitration is subject to that law, the arbitration agreement will also be treated as governed by that country's law.

. In this case, the defendant has responded to the suggestion that the court has jurisdiction by reason of English being the proper law of the arbitration agreement by saying that in the present case such inference is negated by the law of the seat, which is French, and which provides that the French courts would regard the arbitration agreement as being subject to what its expert describes as French substantive rules applicable to international arbitration. This, indeed, appears to be common ground.

. Counsel for the claimant has summarised the matter in this way at paragraph 39(b) of the claimant's skeleton argument. “The experts agree that the French court would follow the approach in Municipalite de Khoms El Mergeb v Societe Dalico and apply “a substantive rule of international law of arbitration”, whereby the existence and effectiveness of the arbitration agreement is to be determined in accordance with the parties' common intention.”

. It is also common ground that there is no statutory provision to this effect in French law, rather, the relevant principles have been worked out via courts. The claimant submits that Lords Hamblen and Leggatt, in Enka, only had a statutory provision in mind and in that regard counsel referred to paragraphs 70 and 71 of their Lordships' judgment, where two statutory provisions in Sweden and Scotland were referred to.

. I accept that the Supreme Court had statutory provisions in mind but I am not persuaded that that circumstance means that the guidance of the Supreme Court in paragraph 170(vi)(a) has no application. If a foreign law provides by well established case law that where the arbitration is subject to its law, so will be the arbitration agreement, there is no reason in logic why the inference cannot be negated.

. Counsel...