Refusal Of Anti-Suit Injunction As The Target Of The Injunction Was Not Bound By UK Arbitration Clause

Author:Mr Paul Friedman, Neil Jamieson and Sapna Garg
Profession:Clyde & Co

(1) Rochester Resources Ltd (2) Viktor F Vekselberg (3) Leaonard v Blavatnik v (1) Leonid L Lebedev (2) Coral Petroleum Ltd

This decision is a helpful reminder that parties should draft arbitration clauses as clearly as possible. Here, the arbitration clause was not drafted clearly enough, resulting in a key party not being bound by it.

Messrs Vekselberg, Blavatnik and Lebedev all held shares in OGIP, which in turn held shares in an oil company, TNK. OGIP issued a promissory note to Coral Petroleum Ltd, for USD 200 million which Mr Lebedev claimed was security for his 15% interest in OGIP. Messrs Blavatnik and Vekselberg sought to buy out his 15% interest in OGIP (and thereby his indirect interest in TNK). In light of this, OGIP's subsidiary, Rochester Resources Ltd, entered an agreement in 2003 with Coral that Rochester would buy the promissory note and pay USD 600 million to Mr Lebedev. This agreement required the arbitration of disputes in England.

A dispute subsequently arose between the parties. Mr Lebedev commenced proceedings in the Supreme Court of New York against Mr Vekselberg and Mr Blavatnik, who applied to the Commercial Court for an injunction to prevent Mr. Lebedev from pursuing those proceedings on the basis that he was bound by the arbitration clause in the 2003 agreement. Their application was under section 37 of the Senior Courts Act 1981 or section 44 of the Arbitration Act 1996.

The Commercial Court declined their application for an anti-suit injunction, deciding that Mr Lebedev was not bound by the...

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