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NEWS

UK Supreme Court Confirms anti-suit injunction against Russian entity in arbitration dispute

The UK Supreme Court recently provided the written reasoning behind its decision to uphold the ruling by the English Court of Appeal (CoA) in the case UniCredit Bank GmbH v RusChemAlliance [2024] EWCA Civ 64.

The case centres around RusChemAlliance (RCA) trying to enforce before Russian courts a set of on-demand bond guarantees issued by UniCredit Bank GmbH (UniCredit) in relation to a couple of engineering and procurement contracts entered by RCA with two German construction companies. RCA sought the enforcement of the bonds (which are governed by English law) before Russian courts in violation of an arbitration agreement, according to which the disputes had to be resolved by ICC arbitration proceedings seated in Paris.

UniCredit then resorted to the English Commercial Court, asking for the issuance of an anti-suit injunction (ASI) targeting the proceedings initiated by RCA in Russia. UniCredit argued that the latter violated the arbitration agreement contained in the bonds. The court initially granted an interim injunction to UniCredit ex parte, but later refused to make it permanent.

The English CoA then reversed the English Commercial Court’s decision, reasoning as follows. First, there was no express choice of the law governing the arbitration agreement included in the bonds (which were governed by English law). Consequently, this choice of law was to be interpreted as also encompassing the arbitration agreement within the bonds.

Second, the English courts noted that the appropriate forum under English law is the one before which the case “can be suitably tried for the interests of all parties and for the ends of justice.” Given that, (i) ensuring the ends of justice involved upholding the parties’ agreement, including the arbitration clause, (ii) if French courts were asked to issue anti-suit injunctions, they would certainly dismiss the request (due to the well-known concerns about ASIs been contrary to EU law) and (iii) although French law doesn't permit anti-suit injunctions, a French court wouldn't view an anti-suit injunction issued by an English court and targeting proceedings before Russian courts as an interference with its jurisdiction.

The Supreme Court agreed with the English CoA, stating that England was the most suitable jurisdiction to evaluate and decide on the request for an anti-suit injunction (ASI) in this case.

For an in-depth analysis of this decision, see this article written by our colleagues from the London office Barry Fletcher, Charles Allin and Chloe Mears.

The Sustainable Investment Facilitation Agreement concluded between the EU and the Republic of Angola

On 18 November 2022, the EU and Angola signed the Sustainable Investment Facilitation Agreement (SIFA) to promote sustainable investment. It aligns with the EU's strategy of deepening ties with African countries, emphasizing green energy, agriculture, and other sectors to help Angola diversify from oil and gas.

Unlike traditional agreements, SIFA focuses on fostering foreign direct investment (FDI) while incorporating environmental, social, and governance (ESG) standards, rather than on protecting investments. The agreement integrates sustainable development goals and reaffirms both parties' commitment to international agreements.

SIFA provides only for a state-to-state dispute settlement mechanism, which includes a first round of good faith consultations which will last up to 120 days. After that, in the consultations fail, an ad hoc arbitration with a three-member tribunal can be commenced. But, unlike traditional agreements, the SIFA doesn't specify any arbitral institution or arbitration rules to be applied.

SIFA is viewed as a model for future EU agreements, representing a shift towards investment facilitation that prioritizes sustainability and transparency over investor protection. The agreement’s success will depend on its practical implementation, and it will be closely monitored by stakeholders in both regions.

Dick Fernando Abanto Ishivata v Bolivarian Republic of Venezuela

In 2001, Fernando Abanto Ishivata, a Peruvian entrepreneur, acquired Omnivisión, Venezuela's first subscription television service (now known as Movilmax), with the intention of transforming it into a high-speed internet provider. By 2004, Omnivisión had secured a 25-year license to provide television and internet services.

However, in 2014, while Abanto was abroad, judicial officers and armed police stormed Omnivisión’s offices in Caracas. The officers had been appointed by a Venezuelan criminal court to act as auditors in a fraud case that, according to Abanto, was unrelated to Omnivisión. During the raid, officers pressured Omnivisión’s employees to sign a document falsely linking the company to Hernán Pérez Belisario, a man accused of fraud in the aforementioned case. As a result, the company's board was stripped of its powers, and ownership was transferred to another entity with alleged ties to the Venezuelan government.

In 2018, Abanto filed a claim under ICSID’s rules, arguing that Venezuela’s actions violated the Venezuela-Peru BIT’s provisions on fair and equitable treatment, full security and protection, most-favoured nation treatment and expropriation. Venezuela contested the tribunal's jurisdiction and denied any responsibility, arguing the inadmissibility of the claims.

On 16 October, the majority of the ICSID tribunal upheld Abanto's claim, ruling that Venezuela’s measures constituted unlawful expropriation of the claimant's investment in Omnivisión. The tribunal found that Abanto and his shares qualified for protection under the BIT and dismissed Venezuela’s jurisdictional challenges. The tribunal awarded Abanto USD14.2 million, which included USD5.9 million for the value of his shares in 2014, plus interest and a portion of his legal costs.

Canadian company files arbitration claim over carbon offset project

On 16 October 2024, Carbon Streaming Corporation, a Canadian investment firm, initiated both arbitration and a court action in Ontario against Hong Kong-based Infinite-Earth Ltd. and related entities, alleging breaches of obligations tied to the Rimba Raya carbon-offset project in Indonesian Borneo. Under the original Purchase and Sale Agreement (PSA) and Strategic Alliance Agreement (SAA) formed in 2021 and amended in 2023, Carbon Streaming acquired rights to sell carbon credits from Rimba Raya, a 69,000-hectare tropical peat swamp intended to sequester carbon for up to 50 years.

Infinite-Earth developed Rimba Raya in 2008, and the project has generated credits since 2013, purchased by entities such as Gazprom and Volkswagen to meet net zero goals. Infinite-Earth renewed its concession in 2021, extending the project’s expected life to 2073. However, Carbon Streaming alleges that failures by Infinite-Earth to meet PSA obligations resulted in significant losses following the Indonesian Ministry of Environment and Forestry’s (MOEF) decision to revoke the project’s local license in April 2024. This revocation has halted international carbon trading associated with Rimba Raya until Indonesia's domestic carbon targets are met, jeopardizing Carbon Streaming’s investment value until the project can resume. Despite a Jakarta court annulling the revocation in July 2024, the MOEF may appeal, leaving the project’s future uncertain. Carbon Streaming seeks to recover the devaluation of its investment, valued at CAD33 million, due to these regulatory and operational setbacks.

 

EVENTS

From Fossils to Renewables: How Climate Change Is Shaping the Future of Investment Arbitration – Milan, 29 October 2024

On 29 October 2024, from 16:00 to 18:00, ARBIT and ILA Italy will host a conference at Legance’s Milan office, exploring the impact of climate change on the future of investment arbitration.

CAM Annual Conference – Milan, 29 November 2024

Save the date for the Milan Chamber of Arbitration’s 15th Annual Conference, which will take place in Milan, Italy on 29 November 2024. Stay tuned for this year’s programme!

AIA Conference – Rome, 6 December 2024

AIA (Associazione Italiana per l'Arbitrato) will hold its annual conference, “The arbitration agreement: the choice, the choices” on 6 December 2024, in Rome. Stay tuned for more information.

 

FROM THE BOOKSHELF

Massimo Coccia and Maria Beatrice Deli have recently published the book "Introduzione al Diritto dell'Arbitrato Internazionale".

Released by Giappichelli Editore in September 2024, the book is aimed at university students and legal professionals eager to deepen their understanding of an increasingly relevant subject in today's context: international arbitration.

The book provides a solid theoretical foundation, complemented by a careful analysis of international arbitration practices, with the goal of clarifying how arbitration proceedings actually unfold and the legal issues that may arise in various stages. Structured into chapters dedicated to different aspects of arbitration law, the book is the result of collaboration between academic experts and industry professionals, ensuring a comprehensive and up-to-date perspective on the topic.