Eastern Caribbean Court of Appeal dismisses global anti-suit injunction appeals

11/10/21

Viktor Vekselberg (a prominent Russian businessman), and various companies in the Renova Group have for several years been involved in litigation in the BVI against a former Russian government minister, Mikhail Abyzov, and his companies. The proceedings commenced in 2013 and concern a dispute relating to Russian energy assets. Mr Abyzov and his companies have brought claims in those proceedings seeking to recover around US$1 billion.

Mr Abyzov filed two applications seeking global anti-suit injunctions against Mr Vekselberg and companies associated with him. The first application related to proceedings commenced by Mr Vekselberg in Russia; the second application to proceedings brought by various companies (including Integrated Energy Systems Ltd) in Cyprus. In addition to an injunction preventing pursuit of those particular proceedings, both applications also sought injunctions prohibiting commencement or pursuit of any other related proceedings anywhere in the world. Mr Justice Wallbank dismissed both applications.

In two separate judgments, the Court of Appeal dismissed the appeals in relation to both applications. In a judgment handed down on 6 October 2021, dealing with the second application, Webster JA emphasised that the Court of Appeal has a limited role in reviewing discretionary decisions. He noted that, in the absence of an exclusive forum clause, the BVI court may grant an anti-suit injunction if foreign proceedings are vexatious or oppressive. He accepted that proof of such conduct is not required if the foreign proceedings interfere with the process of the BVI court (e.g. if they undermine the BVI court’s insolvency jurisdiction), but that requirement was not satisfied in this case.

It was held that the Judge had been entitled to conclude that the Cyprus proceedings were neither vexatious nor oppressive. Whilst the BVI court may consider the merits of foreign claims, it was emphasised that this should be decisive only if the claims are “hopeless, bogus or entirely without merit”. The Cyprus court was the proper forum for an assessment of the merits of the Cypriot claims, and there was no basis to suggest that those claims were hopeless. Webster JA also agreed with the Judge’s conclusion that the issues raised by the Cyprus proceedings were “completely different” from the issues in the BVI proceedings.

It was also noted that an anti-suit injunction would be “pointless” because the Cyprus proceedings were likely to continue in any event. The second application sought an order requiring Mr Vekselberg to procure two of the Cypriot claimants to discontinue their claims, but there was no evidence that he had the ability to do so. Webster JA regarded this aspect of the application as “exorbitant” and stated that it would be “a serious judicial overreach” to grant an injunction in that form. The Court of Appeal held that this fundamental flaw in the application could not be cured by the addition of a requirement that Mr Vekselberg use his ‘best endeavours’ to cause the Cypriot claimants to discontinue their claims.

In a further judgment, dated 8 October 2021, the Court of Appeal dismissed the appeal relating to the first application, upholding Wallbank J’s decision that it would be inappropriate to grant a global anti-suit injunction against Mr Vekselberg. It emphasised that particular caution is required before granting a global anti-suit injunction in the absence of an exclusive forum clause, and that it would generally be inappropriate to do so without reference to specific extant or threatened proceedings.

The two Court of Appeal judgments are here and here.