Read the full judgment text of HCCT 19/2023 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 27 September 2023 before Hon Mimmie Chan J in Chambers.
Arbitration — Anti-suit injunction — Contract governed by English law with arbitration agreement under HKIAC seated in Hong Kong — Defendant’s unilateral commencement of Russian court proceedings in breach of arbitration agreement — Defendant's contention that Russian courts have exclusive jurisdiction due to restrictive measures (Sanctions) under EU Regulation 833 and Russian Procedural Code — Defendant’s submissions that arbitration agreement is unenforceable and arbitration futile due to Sanctions affecting access to justice and enforcement — Court rejected Defendant’s claims on jurisdiction, access to justice, and futility, holding Sanctions have no effect in Hong Kong and arbitration proceeds fairly — Defendant’s claims against Plaintiffs’ affiliates found derivative of contract claims and subject to arbitration agreement — Court upheld established legal principle that anti-suit injunctions restrain foreign proceedings in breach of arbitration unless strong reason shown — No material non-disclosure found regarding plaintiffs’ undertaking to pay damages — Defendant’s loss of freezing orders from Russian court not sufficient to discharge injunction — Fortification of undertaking not warranted given Plaintiffs’ strong financial position — Defendant's application dismissed; injunction continued with costs awarded to Plaintiffs. The case exemplifies the enforcement of arbitration agreements and anti-suit injunctions despite geopolitical sanctions and parallel foreign proceedings, emphasizing contractual sanctity and effective arbitration supervision by Hong Kong courts.
Legal issues: Material non-disclosure in injunction application · Granting/continuation of anti-suit injunction to restrain Russian Proceedings · Validity and enforceability of arbitration agreement under Russian Procedural Code · Continuation of freezing orders and Defendant’s loss of security · Futility of arbitration in Hong Kong due to Sanctions · Claims against third parties in Russian Proceedings · Fortification of Plaintiffs' undertaking for damages
Outcome: The Defendant’s application to discharge the HK Injunction is dismissed; the HK Injunction is continued as amended; the Defendant must take steps to seek a stay of and refrain from further steps in the Russian Proceedings; costs of the summons to discharge to be paid by the Defendant to the Plaintiffs.
Cited by 7 cases · Cites 2 cases