In Riverrock Securities Limited v International Bank of St Petersburg (Joint Stock Company) [2020] EWHC 2483 (Comm) the High Court granted Riverrock Securities Limited (“RSL”) an interim anti-suit injunction against bankruptcy proceedings brought against RSL by the receiver of the International Bank of St Petersburg (“IBSP”) (the Bankruptcy Proceedings).

The High Court held that the avoidance claims brought in those Bankruptcy Proceedings fell within the scope of the LCIA arbitration agreement between the parties and were arbitrable under English law. Further, the dispute between the parties concerned contractual rights, and an arbitral tribunal was capable of granting the relief sought. This case is an example of the pro-arbitration stance of the English court and the expansive interpretation given to the scope of an agreement to arbitrate, even where the disputes that arise under that agreement invoke foreign legislation.


IBSP was declared insolvent in September 2019 and the Russian State Corporation Deposit Insurance Agency (“the DIA”) was appointed as its official receiver in bankruptcy. In October 2019, the DIA commenced the Bankruptcy Proceedings in St Petersburg seeking the invalidation of certain contracts on the basis that they formed part of a scheme to siphon off IBSP’s assets. The DIA also claimed repayment of all amounts IBSP had paid to RSL. The DIA advanced two main claims in the Bankruptcy Proceedings:

  • The avoidance of transactions entered into for unequal consideration and/or for the purpose of harming creditors under article 61.2 of the Bankruptcy Law of the Russian Federation; and
  • Abuse of rights under article 10 of the Civil Code of the Russian Federation.

In 2018, RSL and IBSP entered into nine contracts for the sale and purchase of securities. All nine contracts contained clauses providing that the agreements would be governed by English law, as well as identical LCIA English-seated arbitration agreements. RSL applied to the English courts to obtain an interim anti-suit injunction claiming that IBSP had brought the Bankruptcy Proceedings in breach of the arbitration agreements.

IBSP brought a number of challenges to this application:

  1. The Bankruptcy Proceedings were commenced by the DIA, not IBSP, and RSL had not proven as a matter of law that the DIA was bringing the claims on ISBP’s behalf. Accordingly, the DIA was not party to the arbitration agreements.
  2. The claims did not fall within the arbitration agreement, as the scope of the agreement did not extend to proceedings to set aside a transaction at an undervalue. In making this argument, IBSP relied heavily on the Singapore case of Larsen Oil and Gas Pte Ltd v Petroprod Ltd [2011] 3 SLR 414, in which it was held that properly construed, the arbitration agreement in question did not extend to proceedings to set aside a transaction at an undervalue. The Singapore Court of Appeal determined in that case that claims which arise on insolvency were not covered by an arbitration agreement unless the agreement specifically provided for this.
  3. The claims were not arbitrable under English law.

IBSP further submitted that England and Wales was not the natural or appropriate forum for the determination of RSL’s anti-suit injunction application. This question should be determined by the Russian courts and the  English court should not exercise any jurisdiction in respect of the issues raised.


The High Court granted an interim anti-suit injunction in respect of the Bankruptcy Proceedings, for the following reasons:

  1. On the first challenge, the High Court determined that the Bankruptcy Proceedings were brought on behalf of IBSP: IBSP was acting through the DIA as its official receiver. The abuse of rights claim being brought in the Bankruptcy Proceedings was “a simple private law claim” on the part of IBSP. In relation to the claims being brought under the Bankruptcy Law, the court held that RSL had established a strong case that the DIA had brought those claims on IBSP’s behalf. It was not necessary for RSL to prove this as a matter of law.
  2. On the second challenge, the court held that in order to determine whether a claim falls within the scope of an arbitration agreement, it is necessary to consider the substance of the claim from an English law perspective.The High Court declined to follow Larsen, instead following the approaches in Nori Holding and Fiona Trust & Holding Corporation v Privalov [2007] UKHL 40. It confirmed that English law adopts a generous approach to the construction of arbitration agreements and held that limitations would not be implied into the arbitration agreement. Moreover, the LCIA arbitration agreements were expressed in “expansive terms”, leading Mr Justice Foxton to conclude that the Bankruptcy Proceedings (specifically the avoidance claims) fell within the scope of the arbitration agreements. The court did not consider it relevant to determine whether IBSP’s claim under the Bankruptcy Proceedings could be pursued in an LCIA arbitration. The substance of the claims in the Bankruptcy Proceedings was contractual in nature, and therefore the claims fell within the scope of the arbitration agreement.
  3. On the question of arbitrability, the court considered that whether the claims in question were capable of being submitted to arbitration should be determined in accordance with English law, as this was both the law of the arbitration and the seat. The High Court held that the claims in the Bankruptcy Proceedings would be regarded as actions for insolvency relief under English law, but that this did not automatically render the claims non-arbitrable. Claims have previously been held to be non-arbitrable where the relief (i) sought engaged third party interests, (ii) sought an order that only a court could make, or (iii) (following Fulham Football Club (1987) Ltd v Richards [2011] EWCA Civ 855) represented “an attempt to delegate to the arbitrators what is a matter of public interest which cannot be determined within the limitations of a private contractual process.” The High Court held that the first two tests were not met in this case, as the relief sought in the Bankruptcy Proceedings could be granted by the arbitral tribunal. In relation to the third test, whilst the judge considered public policy concerns, he ultimately favoured the traditional strong pro-arbitration policy of English law to find that the Bankruptcy Proceedings (particularly the avoidance claims) were arbitrable. The High Court considered that the policy in favour of respecting foreign insolvency proceedings would not be undermined by recognising the parties’ forum selection agreement in favour of arbitration.
  4. Lastly, on the argument regarding England not being the natural or appropriate forum, the application was swiftly dismissed, with the argument being described as “hopeless”. Citing the Court of Appeal decision in Enka Insaat Ve Sanayi v OOO “Insurance Co Chubb” and other [2020] EWCA Civ 574, it was held that through the arbitration agreement, the parties had submitted to the jurisdiction of the English courts through their choice of an English seat. This included reference to the powers that the court had in support of an arbitration, including the power to grant anti-suit relief. Although the Supreme Court has now handed down its judgment on the appeal in that the Enka case (see the HSF Arbitration Notes blog post here), this does not change the analysis given that the Supreme Court affirmed the Court of Appeal’s decision. The key issues to determine in this regard remain (i) whether there has been a breach of the arbitration agreement and (ii) if so, whether it is just and convenient to grant an injunction to restrain that breach.


This High Court judgment is significant as it confirms that avoidance claims brought under foreign insolvency legislation are arbitrable in England and Wales. The case builds on and is consistent with a number of other English cases, including Fulham Football Club (which related to unfair prejudice petitions under section 994 of the Companies Act 2006),  Nori (the facts of which were similar to the present case, and on which the court relied heavily), and the recent case of Bridgehouse (which held that disputes concerning relief under the English Companies Act were arbitrable). Here, the key drivers of the court’s decision appeared to be that the dispute was essentially contractual in nature, and that the relief sought was capable of being granted by an arbitral tribunal.

The judgment contains an interesting discussion of the role of international public policy, particularly in respect of the insolvency process, which seeks to achieve optimum returns for creditors as efficiently as possible. However, the High Court ultimately cemented the approach of the English courts, adopting a strong pro-arbitration stance. The English court remains committed to the approach that once parties have signed an arbitration agreement, they will be held to their bargain unless the scope of the dispute and relief being sought clearly falls beyond the ambit of a private contractual process.

For more information please contact Craig Tevendale, Partner, Elizabeth Kantor, Senior Associate, or your usual Herbert Smith Freehills contact.

Craig Tevendale
Craig Tevendale
Head of International Arbitration, London
+44 20 7466 2445

Elizabeth Kantor
Elizabeth Kantor
Senior Associate
+44 20 7466 2406