English Court of Appeal refuses injunction on the basis that the applicant was withholding evidence

On 3 April 2025, the English Court of Appeal dismissed an appeal brought by Renaissance Securities (Cyprus) Limited (Renaissance) of the Commercial Court's refusal to grant it an anti-suit injunction (ASI) to restrain Russian court proceedings brought by two Defendants against Renaissance's (affiliate) Russian entities (RREs). The Court of Appeal ultimately refused to grant an injunction because it found that Renaissance had withheld information about its relationship with the RREs which was material to its assessment. However, significantly, it found that, in principle, the absence of an alternative forum to litigate the Defendants' claims against the RREs would not have prevented it from granting injunctive relief to protect against vexatious claims.

Background

Renaissance was party to a series of investment service agreements with six Russian Defendants, each containing an arbitration clause. In breach of the arbitration clauses, the Defendants commenced Russian court proceedings against Renaissance. Renaissance responded by applying for and obtaining an ASI from the English courts.

Subsequently, the Defendants brought Russian proceedings against three RREs. One of the Defendants petitioned the Russian court to join three RREs as co-defendants in its Russian proceedings against Renaissance. In response, Renaissance applied for and obtained an ASI from the English courts, requiring the Defendants to discontinue the joinder of claims. Another Defendant instituted new standalone proceedings against the RREs. In response, Renaissance applied to the English Commercial Court seeking to clarify the effect of or amend the ASI previously obtained to ultimately require the withdrawal and discontinuance of the new proceedings against the RREs. Renaissance asserted that the court claims against the RREs:

1. were a matter for arbitration, not the courts, pursuant to the arbitration agreements under the investment service agreements (the contractual ground); and/or
2. were brought vexatiously or oppressively to circumvent the arbitration agreements (the non-contractual vexatiousness ground).

For further details on the case background, please read our blogpost here.

First Instance Decision

On 6 November 2024, the Commercial Court rejected Renaissance's application, finding that (1) on their proper construction, the arbitration agreements were not intended to, and did not apply to, claims against third parties and (2) the vexatiousness ground could not succeed because (i) the RREs were not bound by the arbitration agreements and (ii) the only forum in which the claims against the RREs could be brought was the Russian courts.

For further details on the first instance decision, please read our blogpost here.

Grounds of Appeal & Appellate Decision

Renaissance filed an appeal against the Commercial Court's decision on four grounds.

Grounds 1-3 (non-contractual vexatiousness grounds)

In summary, Renaissance argued that the first instance judge:

1. erred in law when finding that a 'forum issue' would prevent it from granting an ASI on vexatiousness grounds;
2. failed to hold that LCIA arbitration was an alternative forum, if one was required, for pursuing the claims against the RREs; and
3. failed to characterise the claims against the RREs to determine whether they were vexatious or oppressive.

In turn, the Defendants argued, among other things, that Renaissance had no legitimate interest to protect in the appeal. Specifically, they argued that Renaissance was no longer affiliated to the two RREs that Renaissance had recently sold and was also not affiliated to the third RRE (which denied any affiliation), such that the Russian proceedings against the RREs did not involve Renaissance at all. Renaissance refused to provide the sale agreements of the RREs (or their terms) which the Court of Appeal considered would have indicated the nature of its relationship with the RREs sold.

The Court of Appeal found, among other things, that:

• the first instance judge had been wrong in finding that it was prevented from granting an ASI in a 'single forum' case (where it found no alternative forum to pursue the claims against the RREs other than Russian courts). In doing so, the court relied on Airbus Industrie G.I.E v Patel (1999) in which Lord Goff confirmed that there was no such threshold forum requirement in single forum cases. Although the risk of leaving the Defendants with no other forum to pursue their claims against the RREs provided "a good reason to exercise great caution before granting an ASI", it "[did] not prevent one from being granted at all"; and
• at first sight, there appeared to be a "powerful case" that the Russian proceedings appeared to circumvent and undermine the effect of the arbitration agreements.

While the Court of Appeal found that the judge had erred in law, it ultimately dismissed the appeal, refusing to exercise its discretion to grant an ASI. Ultimately, it refused to do so because it did not have "the fullest possible knowledge and understanding of all the circumstances relevant to the litigation and the parties to it". Specifically, the court found that it lacked an understanding of the precise relationship between Renaissance and the RREs and, specifically, any delictual liability Renaissance would have in respect of the claims against the RREs – information which the court considered would be of material significance for the discretionary remedy.

Interestingly, the Court of Appeal also decided not to remit the matter to the Commercial Court on the basis that (1) it had not been pressed to do so by the parties and (2) it would only add to delay and expense in circumstances where the appeal was conducted on an expedited basis.

Ground 4 (contractual ground)

Renaissance also argued that the first instance judge had failed to properly interpret the arbitration agreements. Specifically, it argued that the judge should have concluded that the arbitration agreements included a negative obligation not to bring claims outside of arbitration for which Renaissance was jointly and severally liable along with the RREs.

Singh LJ, who gave the leading judgment, rejected Renaissance's argument. He stated that this argument required the court to imply a negative obligation into the terms of the arbitration agreement which was "simply not there". The other two judges on the panel declined to opine on this point given the conclusion that Renaissance was withholding evidence.

Comment

The Court of Appeal's in principle finding that the absence of an alternative forum to litigate claims is not a bar to granting injunctive relief to prevent a vexatious claim should give parties comfort that the English courts are prepared to step in and protect parties from vexatious conduct.

However, the Court of Appeal's ruling also underlines the reality that every ASI application is a case on its own facts, and that ASI relief is discretionary.  For this application, the withholding of evidence led to a refusal to grant Renaissance an ASI, despite recognising that there was a "powerful case" that the Russian proceedings were brought vexatiously. Accordingly, parties should consider their case strategy carefully, weighing up all of the factors in an application for a discretionary relief and testing any evidential weak points in their case, before committing to such an application.