A v OOO “Insurance Company Chubb”
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Carr |
| Judgment Date | 15 October 2019 |
| Neutral Citation | [2019] EWHC 2729 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: CL-2019-000572 |
| Date | 15 October 2019 |
[2019] EWHC 2729 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Carr
Case No: CL-2019-000572
Mr Steven Gee QC and Mr William Buck (instructed by Shearman & Sterling LLP) for A
Mr David Bailey QC and Mr Marcus Mander (instructed by Kennedys Law LLP) for the Defendants
Hearing date: 15 October 2019
Approved Judgment
Introduction
These are proceedings for anti-suit relief by way of injunction, together with associated relief, against four defendants in respect of proceedings in Russia (“the Russian Proceedings”) commenced by the First Defendant (“Chubb Russia”), a Russian insurance company which is part of the Chubb Insurance Group. The proceedings are said to have been issued in breach of and disregarding a written arbitration agreement providing for arbitration in London.
The Claimant (“A”) is an international construction and engineering joint stock company. It entered into a contract dated 27 June 2012 with Energoproekt Closed Joint Stock Company (“Energoproekt”) for boiler and auxiliary equipment installation works at the Berezovskaya Power Plant (“the Contract”) (“the Plant”). Clause 50 of the Contract (“Clause 50”) contained what is said to be the arbitration agreement between the parties. It provided for arbitration under the rules of the International Chamber of Commerce with a seat in London and using the English language. There were also terms in the Contract concerning insurance at Article 32, for example, providing for all risk coverage of A's works on the project as well as a subrogation waiver and the provision for limited liability.
The Contract was the subject of an assignment of rights and obligations dated 21 May 2014 between A, Energoproekt and EON Russia (“Unipro”) whereby Unipro replaced Energoproekt as the contracting party with A under the Contract.
Chubb Russia issued an insurance policy to Unipro which it alleges covered losses arising out of a fire at the Plant on 1 February 2016. Chubb Russia alleges that it paid out some US$400 million to Unipro in respect of those losses. It claims to be subrogated to the claims of Unipro under Russian law and to be entitled to sue in Russia in its own name in respect of those claims.
Chubb Russia notified a claim in respect of losses at the fire to A in April 2019. A rejected the claim (albeit not to Chubb Russia but Unipro), stating that its works were unrelated to the fire. It made reference to the provisions of the Contract, why there was no subrogation and invoked the arbitration clause in Clause 50.
Chubb Russia has issued the Russian proceedings against ten other respondents alongside A including by reference to claims in tort/delict under Russian law. The respondents are collectively said to be liable “solidarily” for “jointly caused harm”.
The present application has been listed before me as a matter of urgency following directions on paper by Mr Justice Teare on 30 September 2019, whereby he permitted service of the claim form and this application on Chubb Russia in Moscow, on the Third Defendant (“Chubb Europe”) in France, and the Fourth Defendant (“Chubb Holding”) in Switzerland. The validity of the claim form was also extended to a period of 18 months.
My understanding is that service of the claim form and this application has been effected on the Second Defendant (“Chubb Investments”) and Chubb Europe, but not Chubb Russia or Chubb Holding, although Kennedys Law LLP have recently indicated that they are now authorised to accept service on behalf of Chubb Russia.
The current application is made ex parte but on notice to the Defendants. A seeks, first, a mandatory order against Chubb Russia requiring it to cause the Russian courts to grant a stay and withdrawing/waiving its claims against A. Secondly, for interim purposes only against Chubb Europe, a mandatory injunction requiring it to procure and cause Chubb Russia to take the necessary steps to comply with the mandatory order against it, to instruct Chubb Russia to take those steps and restraining Chubb Europe from instructing, procuring or causing Chubb Russia to take any steps to continue with the claim in the Russian proceedings against A. The broad allegation against the Second to Fourth defendants is that they are “pulling the strings” behind the Russian proceedings. A also seeks an order dispensing with service of the application notice on all Defendants except Chubb Investments.
The application, as I have indicated, has been listed as a matter of urgency on the basis that A has issued a motion for stay of the Russian proceedings which is due to be heard on Wednesday of next week, being 23 October 2019.
Procedural history
A letter of claim was sent to A by lawyers for Chubb Russia on 24 April 2019. A did not respond directly to Chubb Russia or its lawyers, although it appears that it did write in response to Unipro.
On 25 May 2019 Chubb Russia commenced the subrogation action in the Russian proceedings. It contends that it was fully entitled to do so and, in doing so, has in no way acted in contravention of any arbitration agreement, including Clause 50.
On 29 May 2019 A discovered that Chubb had issued the Russian proceedings. A statement of claim was received by A on 6 June 2019. In the statement of claim Chubb Russia seeks compensation of losses by way of subrogation concerning the fire alleging defects of the supplied equipment, violations of the law requirements during engineering, construction and installation, as well as deviations during development phases. A is said in the statement of claim to be the general contractor, something which A says is a misrepresentation since it played only a limited role to perform its particular subcontract.
On 3 June 2019 A received the first ruling of the Russian court which essentially raised queries about Chubb Russia's claim.
On 29 July 2019 A received a second ruling from the Russian court in which Chubb Russia was asked for further information and given time to cure outstanding deficiencies.
On 4 September 2019 A received a third ruling from the Russian court dated 3 September 2019, accepting Chubb Russia's claim and formally initiating proceedings.
On 13 September 2019 A wrote to Mr Joseph Wayland, general counsel for the Chubb Insurance Group raising questions on the merits and, amongst other things, pointing to clause 50 asking for the Russian proceedings to be withdrawn on 16 September 2019. Mr Wayland's response was to ask for reasonable time to provide a considered response. An email on 20 September 2019 indicated that that the position within the Chubb Insurance Group was still being investigated.
The present claim was issued on 16 September 2019. Further, on 17 September 2019 A issued the motion for a stay in Russia to which I have already referred. A has objected to the Russian court's jurisdiction on grounds, amongst others, that the dispute between the parties should be referred to ICC arbitration in London. As indicated, this motion is to be heard next Wednesday.
Chubb Russia submits that the purpose of this present application appears to be an attempt by A to pre-empt the Russian court's right to decide its own jurisdiction by obtaining a determination from the English court on the same question in advance of the hearing on 23 October 2019.
On 23 September 2019 A issued its application for leave to serve out of jurisdiction and interim injunctive relief. On 30 September, as already indicated, Mr Justice Teare gave directions. He declined to make directions for an urgent hearing to take place, but commented that the matter appeared urgent to him and that A could apply on notice for a one-day hearing between the parties. The application before Mr Justice Teare was supported by a short skeleton argument on behalf of A and two short affidavits from A's chief counsel of international affairs.
On 2 October 2019 A obtained a hearing date for its application for interim injunctive relief of 15 October 2019. Kennedys Law LLP for the Defendants opposed such a hearing and suggested a hearing for mid to late November 2019.
Current position
Bundles for today's hearing were received by the court last Friday, 11 October 2019. Evidence from the Defendants, in the form of a witness statement from Mr Michael Wells of Kennedys Law LLP, was served on the same day. Over the weekend, following an indication that that would be when the court was in a position to pre-read, the court received a helpful “Executive Summary” of the Defendants' case.
On Monday, that is to say yesterday, at 10am, the court received a full skeleton from the Defendants. At 1.10pm the court received a skeleton argument from A, together with a supplemental document addressing some of the authorities relied upon by the...
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