On 14 May 2014 the Court of Appeal granted an injunction restraining two Russian parties from enforcing a series of judgments of Russian courts which had allegedly been obtained by fraud. This is only the second time that an English court has granted an anti-enforcement injunction, and the first time in over 85 years.

The appeal arose in proceedings brought by the Bank of St Petersburg and its chairman Mr Alexander Savelyev against Mr Vitaly Arkhangelsky for the repayment of alleged loans. The Bank had already obtained judgments in its favour in Russia but Mr Arkhangelsky contended that the judgments were obtained fraudulently, as part of a conspiracy orchestrated by the Bank to steal his businesses. The parties agreed that the English courts would determine their dispute. Mr Arkhangelsky sought an interim injunction restraining the Bank from enforcing the Russian judgments pending a trial in England.

At first instance Hildyard J recognised that the Bank’s conduct in pursuing the enforcement proceedings was oppressive, but declined to grant an injunction because in his view the agreement on English jurisdiction did not require the enforcement proceedings to be stayed, and because an injunction would represent an interference with the sovereignty of the states where the judgments were being enforced.

The Court of Appeal unanimously allowed Mr Arkhangelsky’s appeal. In his leading judgment, Longmore LJ held that the judge had misinterpreted the jurisdiction agreement, and had been wrong to consider that an injunction would be an unwarranted interference with the sovereignty of foreign states. The position was similar to Ellerman Lines v. Read [1928] 2 KB 144, where the Court had granted an interim injunction, and subsequently a final injunction, prohibiting the enforcement of a judgment obtained by fraud in Turkey.

In the same judgment, the Court also dismissed an appeal by the Bank against the decision of Hildyard J to disapply the 3-year Russian limitation period under s.2 of the Foreign Limitation Periods Act 1984 so as to permit a counterclaim to be brought by Mr Arkhangelsky’s company against the Bank. The Court agreed with the judge that the hardship that would be caused by applying the limitation period would be out of all proportion to Mr Arkhangelsky’s fault in failing to serve the claim in time.

Click here for the full judgment.