Mace (Russia) Ltd v Retansel Enterprises Ltd and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Phillips |
| Judgment Date | 28 April 2016 |
| Neutral Citation | [2016] EWHC 1209 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2016000179 |
| Date | 28 April 2016 |
[2016] EWHC 1209 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
The Rolls Building
7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Phillips
Case No: CL-2016000179
Finola O'Farrell QC (instructed by Clyde & Co LLP) appeared on behalf of the Claimant
Andrew Green QC and Ravi S Mehta (instructed by Baker & McKenzie LLP) appeared on behalf of the First Defendant
Iain Quirk (instructed by Morgan, Lewis & Bockius UK LLP) appeared on behalf of the Second Defendant
On 29 March 2016, the claimant ("Mace") applied without notice for an interim anti-suit injunction to restrain the defendants from taking further steps in proceedings before the Arbitration Court of the St Petersburg and Leningrad region ("the St Petersburg Court") or from commencing, pursuing or assisting in such proceedings. The injunction was granted by HHJ Waksman QC, sitting as a judge of the Commercial Court. This is the adjourned return date specified in his order dated 30 March 2016. Mace also applies to continue the injunction by Application Notice dated 7 April 2016. Both the first defendant ("REL") and the second defendant ("SPBR") oppose the application.
The background
Between November 2012 and February 2014 Mace and SPBR entered a series of agreements pursuant to which Mace was to provide project management services in relation to a substantial residential development being undertaken by SPBR in St Petersburg, Russia. The initial agreement provided for Mace to be paid about US$18.4 million for the first tranche of work. A supplemental agreement ('the Tranche 2 agreement'), dated 17 February 2014, provided that Mace was to provide a second tranche of services, the total cost of Mace's work being forecast, as a result of the addition of those services, to be US$ 117 million. The initial agreement was expressly governed by English law and contained an LCIA arbitration clause. Although the Tranche 2 Agreement did not itself contain an arbitration clause, it seems clear that any dispute in relation to it would fall within the terms of the arbitration clause in the initial agreement: the defendants did not contend otherwise on this application.
A dispute arose in relation to the project, both Mace and SPBR contending that the other had repudiated the agreements between them. It is common ground between the parties that the agreements terminated one way or another in 2014. On 31 October 2015 Mace commenced an LCIA arbitration against SPBR, claiming sums totalling US$87 million in respect of payments said to be due and/or damages. SPBR served a response dated 18 December 2015. On 8 March 2016 the LCIA notified the parties that the arbitration panel had been appointed. In its response SPBR expressly reserved the right to contend that, as a matter of Russian law, the Tranche 2 Agreement was not properly executed.
On 18 March 2016 REL, which is a Cypriot company owning 100 per cent of the shares of SPBR, commenced proceedings in the St Petersburg Court against Mace and SPBR, seeking a declaration that the Tranche 2 agreement is invalid under Article 46 of Federal Law No. 14FZ relating to limited liability companies. The contention in those proceedings is that, as a 'major' or 'large' transaction (amounting to 85 per cent of the value of SPBR), the Tranche 2 agreement required the approval of a specific percentage of SPBR's shareholders in order to be valid, but no such approval was obtained.
The written determination of the St Petersburg Court admitting the claim provided that there would be a preliminary hearing on 19 May 2016 at 11.10 am and a substantive hearing at 11.11 am on the same day. Mace was directed to provide a written response and all evidence confirming its objections.
Mace discovered the existence of the Russian proceedings on 22 March 2016 through an internet search which revealed the St Petersburg Court's directions but not the details of the claim. The claim had not been served on Mace. It now transpires that it had been sent to Mace's former address in Russia, being the one stated as its address in the agreements.
On 23 March 2016 Mace received advice by email from its Russian lawyers. The advice was that the procedure adopted in the St Petersburg Court was normal: if Mace appeared before the court on 19 May 2016 and presented its case, the hearing would be adjourned. The advice further stated was that it was in Mace's interests to obtain a copy of the files at court.
The without notice application
Mace did not obtain a copy of the papers on the court file but instead, almost a week later, on 29 March 2016, applied without notice to this court on the grounds that the Russian proceedings had been brought secretly and Mace feared that, if notice was given, the defendants might make an application for summary judgment in the St Petersburg Court or seek some other relief which might prejudice Mace before an anti-suit injunction could be granted.
Although the email advice from the Russian lawyers was in the bundle before the judge, it was not drawn to his attention and he was not told that there was a preliminary hearing fixed for 19 May 2016. Neither was he told that there was no suggestion in that advice that there was the possibility of an earlier application.
Ms O'Farrell QC, who appeared for Mace at that hearing and again today, accepted that HHJ Waksman should have been told of those matters. In my judgment, there was insufficient justification in this case for an application being made without notice, a matter which would have been apparent to HHJ Waksman had the facts referred to above been drawn to his attention. The non-disclosure was therefore not only material but would have resulted in the application being refused. The injunction granted on 30 March 2016 must be discharged for those reasons. The question is whether an order should be made on Mace's with-notice application, taking into account as a relevant factor in my decision the views I have expressed above in relation to the without notice application.
The application
Although Mace's claim is expressed as being for an interim injunction, it is common ground between the parties that the effect of an injunction granted today would in reality be permanent and would finally dispose of these proceedings, there being no prospect of a trial of the claim to an anti-suit injunction before the hearing in the St Petersburg Court on 19 May 2016. It is therefore also common ground that Mace must establish that it would have a high probability of...
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English Court Refuses Anti-Suit Injunction Against Non-Party To Arbitration Agreement
...BNP Paribas v Open Joint Stock Company Russian Machines as [2011] EWHC 308 (Comm) and Mace (Russia) Ltd v Retansel Enterprises Ltd [2016] EWHC 1209 (Comm). In these cases, parties who were in common control with the respective parties to the arbitration agreements initiated proceedings in t......