Barclays Bank Plc vs PJSC Sovcombank & LLC Sodeistvie Mezhdunarodnym Raschetam

This case involved Barclays Bank Plc seeking final injunctive relief against PJSC Sovcombank and LLC Sodeistvie Mezhdunarodnym Raschetam in relation to a syndicated loan agreement governed by English law.

TLDR:

• Barclays sought anti-suit and anti-enforcement injunctions against Sovcombank and AIS.
• The dispute arose from sanctions preventing Barclays from making payments under the loan agreement.
• The court upheld the exclusive jurisdiction clause in favor of Barclays.
• Anti-suit and anti-enforcement injunctions were granted to prevent Russian proceedings.
• The court also granted a declaration that Barclays was not liable for non-payment due to sanctions.

Barclays Bank Plc ('Barclays') entered into a syndicated loan agreement ('the Facility') with PJSC Sovcombank ('Sovcombank'), governed by English law. The agreement included an exclusive jurisdiction clause favoring English courts. Sovcombank assigned certain rights to LLC Sodeistvie Mezhdunarodnym Raschetam ('AIS').

Due to sanctions imposed under English law, Barclays was legally prevented from making payments to Sovcombank under the Facility. In response, Sovcombank initiated proceedings in Russia, seeking damages for non-payment, alleging tort-based remedies under Russian law.

Barclays argued that these proceedings breached the exclusive jurisdiction clause and obtained a without notice anti-suit injunction. Despite communication from AIS regarding difficulties in instructing English legal representatives due to sanctions, neither Sovcombank nor AIS participated in the proceedings.

Mr. Justice Foxton confirmed that the Russian proceedings breached the exclusive jurisdiction clause. He noted that AIS, as an assignee, could not be in a better position than Sovcombank regarding enforcement of rights under the Facility. The court granted final injunctive relief to enforce the parties' contractual agreement.

The court also addressed the issue of an anti-enforcement injunction, which prevents a judgment creditor from enforcing a foreign judgment. Citing recent cases, the court found that such relief was appropriate given the circumstances, including the potential for a Russian judgment despite compliance with the anti-suit injunction.

Additionally, the court granted a declaratory relief stating that Barclays was not liable for non-payment due to sanctions, which rendered the payments illegal under English law. This declaration served a useful purpose by clarifying the legal position under the governing law of the contract.

In conclusion, the court awarded costs to Barclays on an indemnity basis, recognizing the urgency and complexity of the case, and the broader implications for the Facility amid ongoing sanctions.

Legal representatives: Ms. Louise Hutton KC and Ms. Ellen Tims (instructed by Simmons & Simmons LLP) for the claimant. The defendants were not present and were not represented.

Judicial Panel: Mr. Justice Foxton

Case Citation Reference: [2024] EWHC 1338 (Comm)