Enka Insaat ve Sanayi A.S v. OOO “Insurance Company Chubb”, Chubb Russia Investments Limited, Chubb European Group SE and Chubb Limited

At a glance

Parties

Enka Insaat ve Sanayi A.S. (Turkey) v. OOO "Insurance Company Chubb" (Russia), Chubb Russia Investments Limited, Chubb European Group SE and Chubb Limited

Case no.

Court of Appeal A4/2020/0068, [2020] EWCA Civ 574; on appeal from High Court CL-2019-000572, [2019] EWHC 3568 (Comm)

Court

England and Wales: High Court (Commercial Court), then Court of Appeal (Civil Division)

Forum and rules

Anti-suit claim under s. 37 Senior Courts Act 1981 to enforce an ICC arbitration agreement with a London seat (clause 50.1 of the Contract of 27 June 2012)

Treaty

None; New York Convention Articles II(3), V(1)(e) and VI discussed

Court members

High Court: Andrew Baker J. Court of Appeal: Popplewell LJ (leading judgment), Males LJ, Flaux LJ

Sector

Power plant construction; property insurance subrogation

Outcome

The High Court dismissed Enka's claims (20 December 2019). The Court of Appeal allowed Enka's appeal against Chubb Russia (29 April 2020), held that English law governs the arbitration agreement, and granted an anti-suit injunction against the Moscow proceedings.

Amount

Chubb Russia paid its insured 26.1 billion Roubles (c. US$400 million) for the fire damage and sought to recover it in Moscow. The anti-suit proceedings did not concern damages.

The dispute

Enka, a Turkish construction company, was a subcontractor for boiler and auxiliary equipment installation at the Berezovskaya power plant in Russia, under a contract dated 27 June 2012. Clause 50.1 of that contract provided for ICC arbitration seated in London but contained no express choice of governing law. After a fire at the plant in February 2016, Chubb Russia paid the owner, Unipro, 26.1 billion Roubles. It then sued Enka and 10 other parties in tort in the Moscow Arbitrazh Court on 25 May 2019, as Unipro's subrogated insurer. Enka sought a declaration and an anti-suit injunction in London. It argued that the Moscow claim breached the arbitration agreement, which in its view was governed by English law. Chubb argued that the arbitration agreement was governed by Russian law, that the tort claim fell outside it, and that the Moscow court was the right forum to decide the question. It also argued that Enka's delay was a strong reason to refuse relief. Enka also sued three other Chubb group companies, alleging that they were "pulling the strings".

Key holdings

1. High Court: Enka's claims were dismissed. The primary ground was that the Moscow Arbitrazh Court, not the English court, was the appropriate forum to decide whether the arbitration agreement covered the Moscow claim. The judge also found that the choice of a London seat did not show a choice of English law to govern clause 50.1. High Court ¶¶ 64, 89, 113
2. High Court: Enka's delay, its failure to start arbitration and its participation in the Russian proceedings would in any event have been a strong reason to refuse an injunction. The claims against the other Chubb companies had no evidential basis, and Chubb Limited's jurisdiction challenge succeeded. High Court ¶¶ 97, 107–110
3. Court of Appeal: as the court of the seat, the English court is necessarily an appropriate court to grant an anti-suit injunction, and forum non conveniens does not arise. By choosing the seat, the parties submitted to the curial jurisdiction of its courts. The court must decide whether the foreign proceedings breach the arbitration agreement, even if that requires it to apply foreign law. Court of Appeal ¶¶ 42, 57, 63–66
4. Court of Appeal: the law of the arbitration agreement is found by a three-stage test. An express choice of law for the main contract may amount to an express choice for the arbitration agreement. In all other cases there is a strong presumption that the parties impliedly chose the law of the seat (the curial law), which gives way only to powerful countervailing factors. Court of Appeal ¶ 105
5. Court of Appeal: Russian law governed the Contract, but not by express choice. The defined term "Applicable Law" only required compliance with local regulations. English law therefore governs clause 50, and the pre-arbitration procedure in clause 50 supports that conclusion. The Moscow Claim was brought in breach of the agreement to arbitrate. Court of Appeal ¶¶ 106–110
6. Court of Appeal: the judge's discretion was flawed. Failing to start arbitration is not a relevant factor. Enka's participation in Moscow was not open to criticism, and there was no culpable delay: Enka acted within 12 days of learning, on 4 September 2019, that the Moscow claim had been accepted. The court granted an injunction, including against Chubb Russia appealing the Moscow merits decision, on Enka's undertaking not to treat that decision as an issue estoppel in arbitration. Court of Appeal ¶¶ 112–120
7. Court of Appeal: Enka's late application to amend its Appellant's Notice, to argue that Chubb Russia had submitted to the jurisdiction under CPR Part 11, was refused. Court of Appeal ¶ 67

Procedural history

1. 27 June 2012Energoproekt and Enka conclude the Contract, with an ICC arbitration clause seated in London (clause 50.1).
2. 1 February 2016Fire at the Berezovskaya power plant.
3. 25 May 2019Chubb Russia files the Moscow Claim in the Moscow Arbitrazh Court. The court accepts the claim on 3 September 2019.
4. 16 September 2019Enka issues an Arbitration Claim Form in the Commercial Court. The next day it moves in Moscow to have the claim dismissed in favour of arbitration.
5. 15 October 2019Carr J declines to decide interim relief on its substance and orders an expedited trial.
6. 20 December 2019Andrew Baker J dismisses Enka's claims and upholds Chubb Limited's jurisdiction challenge.
7. 18 March 2020The Moscow Arbitrazh Court dismisses Chubb Russia's claims on the merits and also dismisses Enka's motion based on the arbitration agreement.
8. 29 April 2020The Court of Appeal allows Enka's appeal and grants an anti-suit injunction against Chubb Russia.

Tribunal, counsel and experts

Decided by

• Andrew Baker Judge, High Court of Justice, Commercial Court

For the claimant

Shearman & Sterling LLP

For the respondent

Kennedys Law LLP

Experts

Andrey Loboda (claimant) · Anton Asoskov (respondent) · Adrian Briggs (respondent)

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Keywords

• anti-suit injunction
• law governing the arbitration agreement
• law of the seat
• curial law
• implied choice of law
• separability
• forum non conveniens
• ICC arbitration
• London seat
• New York Convention Article II(3)
• Angelic Grace
• Sulamérica
• Berezovskaya power plant
• subrogation
• Moscow Arbitrazh Court
• Chubb
• Enka
• s. 37 Senior Courts Act 1981

Summary generated with AI from the published documents — refer to the award for the authoritative text.