Russian proceedings “vexatious and oppressive”: injunctions upheld

In May 2025, we highlighted the trend of western parties withdrawing their anti-suit injunctions obtained against sanctioned Russian parties as a result of retaliatory measures taken in proceedings in Russia. Despite this, we are continuing to see parties avail themselves of the English Courts to obtain anti-suit relief where sanctioned Russian parties breach valid forum clauses by commencing proceedings in Russia.

Background

On 5 June 2025, the Commercial Court in London upheld interim anti-suit and anti-enforcement injunctions obtained by JPMorgan against VTB, the state-owned Russian bank. This is the latest judgment resulting from the winding down of JPM and VTB's relationship following VTB's sanctioning by western governments on the outbreak of the Ukraine war in March 2022.

The judgment relates to assets held in frozen accounts by JPM and governed by (a) an Unallocated Metals Account Agreement ("UMAA") for the purchase of precious metals, (b) a client agreement for a futures and options account (the "Client Agreement "), and (c) an ISDA Master Agreement. Each of these agreements contained an arbitration clause.

In October 2024, VTB issued proceedings in the Russian Courts to recover the amounts frozen under the UMAA and the Client Agreement. The claims were brought against the JPM entities that were parties to those agreements (JPMorgan Securities plc ("JPMS") and JPMorgan Chase Bank, London Branch ("JPMCB") respectively), as well as other JPM entities and trust vehicles which were affiliates of JPMS and JPMCB. In March 2025, VTB commenced proceedings in Russia relating to sums owed to it pursuant to the ISDA Master Agreement with JPMS.

Judgment

At a hearing in June 2025, the Court approved JPM's applications to make final injunctions restraining VTB's claims in respect of the UMAA and the Client Agreement, both as against JPMS and JPMCB as parties to those agreements and the JPM non-party entities, and in respect of the claim brought against JPMS pursuant to the ISDA Master Agreement. Although this last application was brought by JPMS as a party to the ISDA Master Agreement, it was brought on the non-contractual basis in order to avoid the scope of an earlier anti-anti-suit injunction obtained by VTB in the Russian proceedings, which prohibited JPMS from relying on the terms of the arbitration agreement in the ISDA Master Agreement.

Contractual claims (UMAA and Client Agreement)

The Court approved the final anti-suit injunctions in respect of the applications made by JPMS and JPMCB as parties to the UMAA and the Client Agreement, upholding the arbitration agreements and finding that the Russian proceedings were brought in breach of those agreements. The Court dismissed as "not seriously arguable" and "hopeless" VTB's argument that the Russian proceedings, which concerned the entitlement to frozen funds, did not relate to the terms or performance of those agreements and therefore did not fall under the terms of the arbitration agreements. It also rejected VTB's argument that as the Russian claims were brought in tort, and not in contract, they would not fall under the arbitration agreements.

Non-contractual claims (UMAA, Client Agreement, and ISDA Master Agreement)

The Court also made final injunctions relating to the claims against (a) the JPM non-party entities under the UMAA and Client Agreement, (b) JPMS under the ISDA Master Agreement.

The Court held that JPM could not rely on an implied duty which would require VTB to comply with the arbitration agreements in respect of any claim against the non-party JPM entities. Therefore, JPM was required to satisfy the test for the granting of anti-suit injunctions on a non-contractual basis, namely that the claims against the JPM entities and JPMS were "vexatious and oppressive" and that the English Court had a sufficient interest to hear them. This is a high test, which the Courts approach with a great degree of caution for reasons of comity and because such injunctions will involve interfering with the process of a foreign court.

Nevertheless, the Court found that VTB's claims against the JPM non-party entities and JPMS were vexatious and oppressive. The claims were an attempt to enforce contractual obligations and circumvent the arbitration agreements and the English sanctions regime, thereby seeking to obtain an illegitimate juridical advantage. The Court also found that the provisions of Russian law by which VTB was seeking to hold the JPM non-party entities and JPMS liable "do not accord with generally recognised principles of civil law" and constituted a "wholesale disregard of corporate personality and contractual privity, by reference to special legal principles developed in response to international sanctions."

With respect to JPMS's application for an injunction on the non-contractual basis, the Court dismissed VTB's argument that JPMS was unable to make an application on this basis in circumstances where there was an arbitration agreement. The Court held that, despite the presence of the arbitration agreement, JPMS was not prevented from applying on the non-contractual basis.

Our view

This case demonstrates that parties are continuing to make use of the English Courts to obtain anti-suit relief in the face of litigation commenced in Russia in breach of valid forum clauses, or otherwise in circumvention of sanctions. In particular, the case demonstrates that anti-suit injunctions can be sought to help mitigate the effects of claims brought against subsidiaries and other group companies. This will be particularly useful following the Russian Supreme Court's ruling in Sovcombank v Citibank N.A. (US), Citibank CB JSC, which left the door open to Russian subsidiaries being held jointly and severally liable to their foreign parent companies (for more detail, see the summary by ALRUD law firm here).

Finally, although described as somewhat "artificial" by the Commercial Court, the case also demonstrates that parties who may be subject to anti-anti-suit measures in the Russian Courts can find ways to navigate around the risks of breaching these measures and incurring financial penalties by seeking an anti-suit on the non-contractual basis. However, each party will need to consider their own exposure to Russian enforcement and their counterparty's exposure to enforcement by the English Courts.