No anti-suit injunction for parties not subject to an arbitration agreement
The importance of drafting arbitration agreements carefully and precisely has been highlighted by the Commercial Court when it rejected an application for an anti-suit injunction restraining New York court proceedings in favour of arbitration.
Mr Vekselberg, Mr Blavatnik, and a BVI company (Rochester) of which they were ultimate beneficiaries, were the claimants. The defendants were Mr Lebedev, and Coral Petroleum Limited (Coral), an Irish company, which the claimants contended was ultimately beneficially owned by Mr Lebedev. The individual parties were “well known and immensely wealthy businessmen”.
Mr Lebedev was the ultimate beneficiary of a minority interest in an oil company, TNK, and one of its subsidiaries. Mr Lebedev arranged to transfer these interests to entities owned by Messrs Vekselberg and Blavatnik.
The agreement in question was an acquisition agreement between Rochester and Coral in which Rochester purchased Coral's interest in a promissory note relating to the TNK-BP joint venture, although there was a dispute as to whether it included Mr Lebedev's personal minority interest in TNK-BP, TNK-BP was sold to Rosneft for a substantial sum and Mr Lebedev brought proceedings in New York for payment from the Claimants in relation to his minority stake in TNK-BP.
The Claimants sought to stay the proceedings in favour of arbitration based upon the arbitration clause in the acquisition agreement, which the Claimants said bound affiliates under the agreement. The court disagreed as the wording of the arbitration clause referred only to "parties" (and Mr Lebedov was not a party to the agreement). The court noted that “there are limits as to what a court can properly do to improve a carefully drafted and (at least in this respect) reasonably clear written agreement.” Had the parties wished to do so, they could have added Messrs Lebedev, Vekselberg and Blavatnik to the arbitration clause. They had not done so.
For the full article please click here.
 Rochester Resources Limited & Ors. v Leonid Lebedev & Anor