A recent decision of the English High Court has once again emphasised the importance of arbitration agreements in resolving international commercial disputes. In this case, the Russian bank RusChemAlliance attempted to bring proceedings in Russian courts despite the ICC arbitration clause, but on UniCredit’s application, the English Court ordered a stay of those proceedings. This decision shows how critical it is to preserve arbitration agreements even in the midst of sanctions and legal uncertainty.
Background to the Case
UniCredit provided performance bonds under the contracts with RusChemAlliance. These bonds were covered by English law and provided that any dispute that might arise would be resolved in ICC arbitration in Paris. RusChemAlliance filed a lawsuit in Russian courts to call the bonds due to EU sanctions. UniCredit, on the other hand, stated that these lawsuits were contrary to the arbitration clause and requested an anti-suit injunction (ASI) in the English courts.
Court Decision
The British High Court has ruled that the arbitration clause remains valid and that the lawsuits filed in the Russian courts should be stopped. The court stated that the sanctions did not impair the arbitration agreement and that this agreement remains valid. It also ruled that RusChemAlliance’s decision to sue in Russian courts instead of arbitration in Paris was a clear breach of the arbitration agreement.
Legal Analysis
The Court’s judgement once again demonstrates the importance of arbitration agreements in international trade. The English courts provide strong protection against foreign actions in breach of arbitration agreements. This shows how effective arbitration clauses are in resolving international disputes and how important it is for the parties to clearly specify the applicable law when concluding an arbitration agreement.
Conclusion and Recommendations
This decision emphasises how critical it is to protect arbitration agreements in international commercial relations. When entering into arbitration agreements, parties should clearly specify the applicable law and honour those agreements. Moreover, the importance of preserving the enforceability of arbitration clauses in international commercial disputes and ensuring that sanctions do not affect arbitration proceedings has once again emerged.
This article emphasises how important arbitration agreements are in international trade and how critical it is to protect them. The judgement of the English Supreme Court once again demonstrates the importance of preserving the enforceability of arbitration clauses in international commercial disputes.