Reed Smith Client Alerts

The English Court of Appeal recently provided welcome clarification and confirmation of some important principles applicable to international arbitrations which are seated in England. In Enka Insaat Ve Sanayi AS v. OOO “Insurance Company Chubb” & Ors [2020] EWCA Civ 574,1 the Court of Appeal granted an anti-suit injunction restraining a party from pursuing court proceedings in Russia that were in breach of an arbitration agreement.

In its judgment, the Court of Appeal provided guidance which will assist parties to international arbitrations on a number of important matters, including as to the primacy of the curial law in support of international arbitrations.

A. Background

Enka Insaat ve Sanayi AS (Enka) was a subcontractor for the construction of a power plant in Russia. The applicable contract contained an arbitration agreement which provided for ICC arbitration with its seat in London.

In 2016, a fire occurred at the power plant and OOO “Insurance Company Chubb” (Chubb) paid out US$400 million to its insured in respect of damage caused by the fire. Chubb became subrogated to the insured’s rights and asserted that the fire had been caused by Enka’s defective works.

On 25 May 2019, Chubb filed claims against Enka and 10 other parties with the Moscow Arbitrazh Court (Russian Proceedings). The Moscow Arbitrazh Court deferred acceptance of the claims due to Chubb’s failure to sufficiently particularise its allegations against each of the defendants. Chubb’s claims were eventually accepted by the Moscow Arbitrazh Court on 3 September 2019.

On 16 September 2019, Enka issued proceedings in the English Commercial Court, seeking (i) an anti-suit injunction restraining Chubb from continuing the Russian Proceedings and requiring it to discontinue those proceedings; and (ii) a declaration that Chubb was bound by the arbitration agreement which covered Chubb’s claims against Enka. Enka also filed a motion with the Moscow Arbitrazh Court on 17 September 2019, seeking dismissal of Chubb’s claims on the basis of the arbitration agreement.