Çitil & Güner attended London Arbitration Week held earlier this month. Here are the summaries of two select panels from the week.

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1. Arbitration in the Age of Strategic Conflict: Navigating Sovereignty, Sanctions, and Security

In this panel, hosted by Herbert Smith Freehills Kramer, the speakers were Hannah Ambrose (Partner, Herbert Smith Freehills Kramer), Laurence Franc-Menget (Partner, Herbert Smith Freehills Kramer), Kevin Nash (Director General, LCIA), and Henry Smith (Partner, Control Risks).

The central theme of the discussion was how geopolitical instability (such as the Russia-Ukraine war) is reshaping the strategies adopted by the legal teams, businesses, and arbitral institutions. This reshaping involves not only legal compliance, but also deep intelligence gathering, security measures, and an understanding of the state-level decision-making to ensure, among other things, the enforceability of awards.

Henry Smith touched on the “stay or go” dilemma faced by foreign, especially Western, companies in Russia, following, and shortly prior to, the Russia-Ukraine war. Both those who exited and stayed faced different problems and disputes due to different reasons. Mainly, the problem for businesses was the difficulty of compliance “at home” with sanctions. When it came to those who wished to exit, however, contrary to the general external view of the Russian politics and bureaucracy, the approval process for who could buy what was driven by operational continuity considerations.

Eliana Tornese explained how arbitration institutions evolved to maintain neutrality within the limits of the sanctions regimes. This includes direct engagement with the OFSI (Office of Financial Sanctions Implementation) in securing General Licenses, helping with processing payments and administration of cases where sanctioned parties are involved in the arbitral proceedings managed by the LCIA. Internally, the LCIA also focuses on neutrality, motivated by the aim to maintain award enforceability around various jurisdictions.

Another issue discussed in the panel was the arbitrators, especially their scrutiny in terms of ability to navigate geopolitical risks, and not just legal expertise. This scrutiny includes considerations of enforceability, through a deeper review of potential arbitrators’ cultural affinity and ability to travel to specific jurisdictions. The LCIA also considers physical security, bearing in mind the instances where witnesses faced arrests or requirements of prior liaison with local authorities to safely conduct proceedings.

A point to note was the unveiling of the “shadow” influences driving disputes behind the scenes. Henry Smith noted that it may often be assumed that some dark political forces are at play in driving the disputes, but rather “turf wars” between corporate or government/bureaucratic executives. He also explained how they analyse Russian counterparts by looking at (1) the Kremlin’s political pressure, (2) organisational logic, and (3) personal career incentives of the involved individuals.

Finally, the panel touched on resource nationalism, where states reclaim control over mining assets within their jurisdictions. It is said that there is now a shift, mainly driven by the US foreign policy, to bilateralism (instead of multilateralism), focused on direct and interest-based deal-making.

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2. Provisional Relief in the Dutch and English Courts: Safeguarding Rights or Weaponising Procedure?

The panel was hosted by Three Crowns LLP, and compared the Dutch and English courts’ approach to the provisional reliefs in arbitration proceedings. The panel was moderated by Annette Scholten (Associate, Three Crowns), and the speakers were Richard Trinick (Counsel, Three Crowns), James Turner KC (Barrister, Quadrant Chambers), Roelien van den Berg (Advocate, Avizor Advocates & Arbitrators), and Marieke Witkamp (Independent Arbitrator and Dutch Substitute Judge).

James Turner KC opened his speech with the ship arrest order under English law, which works for a very limited class of claims under the Senior Courts Act 1981. The English courts may allow the arrested ship to be sold; however, this is not often. Finally, in order for damages to be awarded to the defendant for wrongful arrest, the arrest should be extremely wrongful; merely getting it wrong does not result in damages.

Roelien van den Berg stated that Dutch courts are comfortable granting prejudgment attachments, due to a long-standing history of doing so, since the current prejudgment attachment originates from arrests that were already applied in the 16th century in the Netherlands. She stated that the procedure is ‘very quick’, and without notice. However, the applicant will have to show, and also submit certain evidence, that the claim exists to satisfy the prima facie test. Lastly, prejudgment attachments are restricted to Dutch assets, including Dutch third parties, except for the European bank account attachments that can be awarded by Dutch judges or any other EU member state judges.

Richard Trinick explained that in order to obtain freezing orders from English courts, it should be established that there is a good arguable case on the merits, a real risk of dissipation, and also, it should be demonstrated that the order would be just and convenient. He stated that when applying for a freezing order, the English courts ‘pretty much invariably’ require the applicant to provide a cross-undertaking, and security for that undertaking if there is any kind of doubt that the applicant will be able to pay the necessary amount under the cross-undertaking given.

It was also stated that the English courts carry out a stricter review process than their Dutch counterparts, and thus, it is generally easier to get attachments against third parties from the Dutch courts than the English courts. The threshold is quite high under English law to obtain an order to freeze assets of third parties, since it will have to be shown that there is a good reason to believe that those assets of the third party will be available to satisfy an award through enforcement.

Richard Trinick also touched on the anti-suit injunction applications before the English courts, and explained the legal requirements. Accordingly, it should be established that a high degree of probability that there is a binding arbitration agreement that covers the disputes in question and the relevant foreign proceedings are or will be a breach of that agreement.

He addressed two aspects of anti-suit injunctions: first, English courts will grant an anti-suit injunction before there has actually been any breach of an arbitration agreement if the applicant can show a real risk or strong possibility that the other party will commence proceedings that will breach the arbitration agreement, and second, that English courts are willing to grant anti-suit injunctions in support of arbitrations that are not even seated in the UK.

However, such approaches may be reduced due to recent developments in the arbitration, for instance, the reforms the new arbitration Act brings. He also addressed the reason English courts’ willingness to grant these and stated that the fact that it may be caused by English court’s supportive approach towards arbitration, and also, the fact that it was desirable that parties should be held to their contractual bargain by any court before whom they have been or can properly be brought as stated by the Supreme Court in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30 judgment.

Finally, Roelien van den Berg took the floor regarding the Dutch courts’ approach to anti-suit injunctions and stated that it is not a concept generally recognised. However, in a recent case (LC Corp BV v Poland), the Amsterdam Court of Appeal ordered LC Corp BV to withdraw its claim, imposing a financial penalty for any failure to comply. Although, she also pointed out that she believes the Dutch courts’ approach was particular to the intra-EU treaties.