LITIGATION & ARBITRATION - Final Anti-Suit Injunctions under Pressure: Material Change, Real Injustice, and Tailoring after UniCredit (CA)

An anti-suit injunction restrains parties from pursuing litigation abroad - typically to enforce arbitration agreements under Senior Courts Act 1981, s 37. But enforcement hits a problem when foreign courts penalise parties for complying. When foreign courts impose penalties for obeying English ASIs, courts can adapt their orders under CPR 3.1(7). The alternative - scrap the injunction entirely or hold parties to it despite genuine hardship - creates needless tension between enforcing arbitration and respecting foreign courts. Courts have tools to adjust injunctions without abandoning them: carve-outs for specific foreign proceedings, temporary suspension during appeals, and orders blocking enforcement of foreign judgments. These preserve arbitration enforcement while addressing penalty-driven hardship. This article examines how courts manage these adjustments - the procedural routes, jurisdictional basis, when penalties justify change, how courts tailor responses, and strategic implications. It draws on UniCredit, where the Court of Appeal modified an ASI after Russian courts imposed penalties, maintaining the core finding that parties breached their arbitration obligations.

Finality and Variation Gateways

Courts can vary or revoke orders when circumstances change. That is the route they use when foreign penalties create genuine hardship without scrapping arbitration protection. The test from Tibbles v SIG: circumstances must be "materially different in a significant respect" from the original order's factual basis. Courts need substantial change before reopening final orders, but they keep power to adjust terms when new developments would otherwise cause injustice.

Proving material change doesn't guarantee relief. Courts choose whether to vary the order - keeping its core purpose intact - or revoke it entirely. They weigh whether the new circumstances justify modification while staying consistent with why they made the order originally. Material change opens the door, but courts still decide whether targeted adjustments can solve the problem without defeating the order's purpose.

Appeals face a higher bar. Reopening requires "wholly exceptional" circumstances under CPR 52.30 - situations courts couldn't foresee with no other remedy available. Critics argue this appellate route should be exclusive, warning that letting first-instance courts vary orders creates inconsistency. But the variation power operates independently, giving courts flexibility to respond when penalties emerge after the original order without undermining finality.

ASI Power and Governing Law Logic

Senior Courts Act 1981, s 37 gives courts power to grant injunctions "in all cases in which it appears just and convenient" - the statutory basis for ASIs in arbitration enforcement. Critics argue ASIs breach international comity by effectively blocking foreign litigation. The technical distinction: ASIs bind parties, not foreign courts - they stop parties breaching arbitration promises rather than ordering foreign judges to stand down. But when compliance means dropping proceedings, critics say the distinction is meaningless.

UniCredit (UKSC) settled the key question: English courts can issue ASIs protecting arbitration agreements governed by English law, wherever the arbitration is seated. Governing law matters, not seat. The Supreme Court rejected claims that foreign seats block English intervention. Under Enka and Kabab-Ji, enforcement follows the agreement's governing law. English law means English courts intervene with English tools. Many major seat courts, including French courts, can't issue ASIs. English courts fill that gap for English-law agreements. But the authority faces limits when foreign courts hit complying parties with penalties, triggering the variation framework.

Foreign Penalties as Material Change

When Russian courts hit parties with penalties under the Arbitrazh Procedural Code in UniCredit, they created compliance costs and legal risks the original ASI hadn't contemplated. That shift let courts adjust the order: circumstances became "materially different in a significant respect" from when courts made it—the Tibbles v SIG standard.

The test focuses on what actually happened, not what courts might have predicted. Critics say sophisticated courts should anticipate foreign resistance, making penalty orders foreseeable rather than genuinely new. But there's a difference between expecting general hostility and predicting specific penalty mechanisms. Concrete penalty orders impose real compliance obligations. Courts respond to actual developments, not theoretical risks.

That creates tension. The Angelic Grace backs strong arbitration enforcement, but penalties raise comity concerns. Some warn that accommodating foreign penalties signals weakness and invites coercive behaviour. Others argue rigid enforcement risks backlash—proportionate responses maintain enforcement without disproportionate hardship. Targeted variation keeps the core breach finding while avoiding unnecessary conflict.

Material change doesn't mean automatic relief. Courts weigh whether the new circumstances cause genuine hardship and whether adjusting terms fixes that without defeating the order's purpose. Timing matters, as does party behaviour, arbitration policy, and comity. The original reasons for the injunction guide decisions but don't prevent necessary changes. Appeals rarely intervene.

Real hardship gets relief; speculative harm or self-inflicted problems don't. Courts ask whether adjustments are proportionate, preserve enforcement, and prevent gaming. Variations restrain parties, not foreign courts. The pattern: vary when penalties bite hard, refuse when parties have other options.

Designing judicial response 

Courts have three tools to ease penalty pressure without abandoning anti-suit injunctions. First, carve-outs: permission to enter specific foreign proceedings to reduce penalty exposure. Second, staged compliance: temporary suspension while parties appeal foreign penalty orders. Third, security arrangements: protective measures where enforcement risk remains high. Courts grant carve-outs where penalties exceed twice the arbitration costs and parties need limited foreign court access. But the permission is narrow: only proceedings aimed at reducing penalties, and only in jurisdictions where any resulting judgment cannot be enforced. Daily penalties often justify carve-outs; lump-sum threats may call for staged relief. The Commercial Court supervises through case management hearings, drawing on freezing injunction practice.

Carve-outs create a problem: defendants might use foreign court access to obtain judgments that undermine the arbitration. Anti-enforcement injunctions (AEIs) solve this by blocking enforcement of those foreign judgments. The mechanism works territorially. Courts permit proceedings in named jurisdictions (the carve-out) but restrain judgment enforcement wherever defendants hold assets (the AEI). JPMorgan v VTB shows the approach: defendants accessed foreign courts to mitigate penalties, but could not enforce any resulting judgment. Courts limit AEIs to judgments that breach the arbitration agreement itself, excluding legitimate orders addressing penalty costs. Since AEIs bind parties, not foreign courts, they work against defendants with English assets or those who submit to English jurisdiction.

Courts apply four tests when tailoring variation. Necessity: use the lightest-touch solution, with clear evidence that penalties cause the compliance problem and that parties tried other fixes first. Proportionality: match the intervention's scope (duration, geography, impact) to penalty severity relative to the underlying dispute value. Clarity: set measurable compliance standards with objective triggers for when relief starts and stops. Reviewability: fix review dates and procedures for rapid adjustment if penalty circumstances shift.

The framework gives parties predictability. Courts modify ASI terms where penalties create genuine hardship but discharge the injunction entirely only where penalties make compliance impossible. Severity relative to dispute value determines the outcome. The Commercial Court's experience with freezing injunctions and worldwide disclosure orders provides the institutional skill to manage these arrangements effectively.

Strategic Considerations and Limiting Principles

English arbitration seats give parties direct court support under Arbitration Act 1996, s 44, backed by Commercial Court expertise in tailored ASI protection. Section 44 provides comprehensive assistance including the remedial tools (carve-outs, staged compliance, anti-enforcement injunctions) that Paris, Singapore, and other major seats cannot offer due to jurisdictional limits. This creates a competitive advantage. Born, a leading authority on international commercial arbitration, calls it forum shopping. He argues that parties selecting English seats for ASI availability undermine cooperation between arbitration centres and cherry-pick procedural advantages to gain unfair edge. But parties have good reason to choose English seats: they access judicial tools for protecting arbitrations that other courts cannot provide.

The framework carries wider risks. Andrews warns that recognising penalty-based variation may backfire: foreign courts might impose penalties deliberately, expecting English courts to accommodate them. This would weaken ASI deterrence and could destabilise the framework. The risk is real. The framework addresses it through built-in safeguards. The precedent applies only to penalty cases, not general variation. Proportionality requirements block tactical claims: courts respond only to genuine hardship, not inconvenience. Three questions remain: whether targeted approaches create the wrong incentives, where to draw AEI scope boundaries, and how quickly parties must apply for variation.

Conclusion 

When foreign courts penalise parties for obeying English anti-suit injunctions, English courts can now respond without abandoning arbitration protection. The framework allows targeted modification where penalties create genuine hardship. Courts use three tools: carve-outs (limited foreign court access to reduce penalty exposure), staged compliance (temporary suspension during appeals), and anti-enforcement injunctions (blocking enforcement of any resulting foreign judgments). The approach preserves arbitration agreements while avoiding disproportionate harm to restrained parties.

For parties, this matters. Courts no longer face the blunt choice between maintaining injunctions unchanged (risking crippling penalties) or scrapping them entirely (abandoning arbitration). Instead, courts can calibrate relief to match penalty pressure. The result: English arbitration seats offer enforcement muscle with practical flexibility. Foreign penalties shift the ground, but they do not force courts to choose between arbitration commitments and basic fairness.

---

BIBLIOGRAPHY:

Legislation

• Arbitration Act 1996.

• Civil Procedure Rules (CPR) rr 3.1(7), 52.30.

• Senior Courts Act 1981, s 37.

Cases

• AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC [2013] UKSC 35.

• Airbus Industrie GIE v Patel [1999] 1 AC 119 (HL).

• Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38.

• JPMorgan v VTB [2025] EWHC (Commercial Court) (check citation).

• Kabab-Ji SAL v Kout Food Group [2021] UKSC 48.

• Taylor v Lawrence [2002] EWCA Civ 90.

• Tibbles v SIG plc [2012] EWCA Civ 518.

• The Angelic Grace [1995] 1 Lloyd’s Rep 87 (CA).

• UniCredit Bank AG v RusChemAlliance LLC [2024] UKSC (check neutral citation).

• UniCredit Bank AG v RusChemAlliance LLC [2025] EWCA Civ (pinpoint to be verified).

Books and Treatises

• Neil Andrews, English Civil Procedure (latest edn, CUP).

• Neil Andrews, Contract and Arbitration (latest edn, CUP).

• Gary Born, International Commercial Arbitration (3rd edn, Kluwer Law International 2021).

• Steven Gee KC, Commercial Injunctions (7th edn, Sweet & Maxwell 2021).

Other Authorities

• Russian Arbitrazh Procedural Code, arts 248.1–248.2.