Google LLC v Nao Tsargrad Media

Hearing dates: 26 and 27 November 2024

Draft judgment circulated to parties: 7 January 2025

Approved Judgment

(A) INTRODUCTION

The Claimants, Google LLC (“ Google”) and Google Ireland Limited (“ Google Ireland”) seek final relief against the Defendants, to whom I shall respectively refer as “ Tsargrad”, “ NFPT” and “ TV-Novosti”.

The main remedy sought is anti-enforcement injunctive (“ AEI”) relief, with ancillary anti-anti-suit injunctive (“ AASI”) relief, in order to prevent the recognition or enforcement of a series of judgments of the Russian courts (“ Russian Judgments”) in any jurisdiction outside Russia. The Russian proceedings are alleged to have been commenced and pursued in breach of London arbitration or exclusive English jurisdiction agreements. The judgments have led to the seizure in Russia of assets worth more than £50 million belonging to a subsidiary (“ Google Russia”), and the Defendants have also embarked on a series of attempts to enforce the Russian Judgments in various other jurisdictions around the world.

The Defendants' position, in outline, is that:

i) subject to one exception, the Russian Proceedings were not brought in breach of an exclusive jurisdiction clause or arbitration agreement;

ii) the Claimants have submitted to the jurisdiction of the Russian courts; and

iii) relief should in any event be refused on the grounds of delay.

For the reasons set out below, I have reached the conclusion that the Claimants' arguments are to be preferred and that final anti-enforcement injunctive relief, and any appropriate supporting relief, should be granted.

(B) MAIN FACTS

(1) Contractual Matrix

The creation and use of a Google account and YouTube channel are subject to, respectively, the Google Terms of Service, as amended, and the YouTube Terms of Service, as amended. Use of and entitlement to such services is subject to contractual safeguards in the discretion of Google, including an ability (in the YouTube Terms of Service) to suspend or terminate a Google account (and related services) in the event that Google was required to do so to comply with law or a court order.

Tsargrad and TV-Novosti entered into separate agreements with Google Ireland for monetisation services, namely: (a) an Order Form, incorporating the Platform Terms, which covered revenue sharing from advertising on Tsargrad's YouTube channel; and (b) a Content Agreement setting out the terms by which Google Ireland would store, index and host content and make such content or portions of it available to end users of the relevant services provided to TV-Novosti.

The YouTube EJC provides:

“The Agreement and your relationship with YouTube under the Agreement are governed by English law. To resolve disputes, the parties may apply to the courts of England and Wales.

If, under any mandatory law of your country, the dispute cannot be resolved in a court in England or Wales and in accordance with the norms of English law, the case may be referred for consideration to a local court and the issue may be resolved as guided by local legislation.”

The Platform EJC at clause 14.6 of the Platform Terms provides:

“The Agreement is governed by English law and the parties submit to the exclusive jurisdiction of the English courts in relation to any dispute (contractual or non-contractual) concerning the Agreement save that either party may apply to any court for an injunction or other relief to protect its intellectual property rights.”

Clause 14.11 of the Content Agreement provides:

“This Agreement shall be governed by and construed in accordance with English law. Without prejudice to the right of either party to apply to any court of competent jurisdiction for emergency, interim or injunctive relief, any dispute or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of the LCIA, which Rules are deemed to be incorporated by reference into this clause… The seat, or legal place, of arbitration shall be London, England…”

(2) Russian Proceedings

The Defendants commenced proceedings before the Arbitrazh Court in Moscow and obtained the Russian Judgments, as summarised below.

(a) Tsargrad

Tsargrad created a Google account and YouTube channel in August 2014. It is indirectly majority owned by Konstantin Malofeyev, a Russian oligarch.

Mr Malofeyev became subject to sanctions in 2014. On 30 July 2014 the EU added him to the list of persons subject to EU sanctions under Decision 2014/508/CFSP for acting in support of the destabilisation of Eastern Ukraine. On 19 December 2014, he was designated by the US Treasury Department's Office of Foreign Assets Control (“ OFAC”) for, among other things, being complicit in, or for having engaged in, actions or policies that threaten the peace, security, stability, sovereignty or territorial integrity of Ukraine.

On 27 July 2020, Google ceased providing services to Tsargrad and terminated its Google accounts and YouTube channel. Google's evidence is that that step was taken “in compliance with US sanctions law and Google's policies after identifying [Tsargrad] as an entity that was indirectly majority-owned by Malofeyev, who was subject to sanctions” as noted above. Google Ireland likewise stopped providing advertising services to Tsargrad.

By a complaint dated 27 August 2020, Tsargrad filed a suit before the Arbitrazh Court against Google, Google Ireland and Google Russia alleging that Google had unlawfully refused to perform the Order Form / Platform Terms. By those proceedings, Tsargrad sought orders (i) invalidating the refusal to perform the Order Form; (ii) requiring restoration of access and (iii) imposing an astreinte penalty absent compliance. An astreinte is a court-imposed penalty for non-compliance with a judicial order, particularly an order for specific performance of obligations.

Claiming to have suffered “tremendous negative consequences due to the Defendants' dishonest actions”, Tsargrad asked the court to set a progressive penalty jointly and severally against all the Defendants of 100,000 rubles for each day of failure to comply with the court's order (starting from the sixth day of non-compliance), with the amount doubling each week. The evidence of the Claimants' expert, Professor Yarik Kryvoi, is that no Russian court had at the time granted an astreinte of anything approaching that amount. In his report he says:

“101 The largest astreintes I identified were awarded to secure an obligation to demolish structures built in violation of applicable construction rules and standards. One example included a 1,000,000 rubles (approximately £8,800) one-off payment and 180,000 rubles (approximately £1,600) for each additional month of non-compliance. A further example was a 200,000 rubles (approximately £1,750) one-off payment and 100,000 rubles (approximately £880) for each additional month. Finally, one court awarded 100,000 rubles (approximately £880) for each month of non-compliance. In other contexts, the courts have again imposed moderate penalties in connection with orders for specific performance. For example, the courts awarded an astreinte to secure an obligation to (i) return rented property upon the termination of the rental period in the amount of 16,000 rubles (approximately £140) per day; and (ii) refute defamatory statements, in amounts ranging from 10,000 rubles (approximately £90) daily to a one-off payment of 150,000 rubles (approximately £1,300). According to one study, the most typical amount of an astreinte awarded in cases unrelated to foreign sanctions is 1,000 rubles (approximately £9) accruable on a daily basis.

102 In cases brought under Law No. 171-FZ, however, the amounts of the astreintes imposed by the Russian Courts have been on an entirely different scale. There have been two different categories of cases. In the first, the amounts have been much higher and have grown at a higher rate, often without any limit or cap. Examples include astreintes in the following amounts: (i) 200,000 rubles (approximately £1,760) per day; (ii) 10,071,716.70 rubles (approximately £88,600) per day; and (iii) 36,714,132 rubles (approximately £323,000) per day. The second category of astreintes on a much higher scale includes the cases filed by the Defendants in these proceedings against Google. In the case initiated by Tsargrad against Google and its affiliates, the court imposed a then-unprecedented astreinte in the amount of 100,000 rubles (approximately £880) for each day of non-execution, starting...