When arbitration is undermined abroad: the Commercial Court’s response in Tecnimont v Eurochem

In Tecnimont SpA v LLC Eurochem North-West 2 [2025] EWHC 3151 (Comm), the English Commercial Court granted an application under section 42 of the Arbitration Act 1996 (AA 1996) to enforce peremptory orders made by a London arbitral tribunal against a Russian company. The orders required the company to withdraw proceedings it had commenced in Russia in breach of arbitration agreements. 

Background

The claimants (Tecnimont) entered into a contract with a Russian company, Eurochem North-West-2 (NW2) for the construction of a urea and ammonia fertiliser plant in Kingisepp, Leningrad Region, Russia. The contract provided that any disputes between the parties were to be referred to London arbitration under the ICC Arbitration Rules. 

Following the imposition of EU trade sanctions against Russia, the claimants suspended performance of the contracts. They claimed that export controls on dual-use goods by EU Council Regulation 328/2022 and EU Council Regulation 269/2014 prevented them from obtaining numerous items required to perform the contractual services, despite them making applications for export authorisations. They also argued that continuing performance would have exposed Tecnimont to sanction breaches as they would be providing economic resources to an entity owned or controlled by a designated person. NW2 disputed Tecnimont’s claim and subsequently terminated the contracts for breach. 

The claimants commenced an ICC arbitration shortly thereafter, and in response NW2 commenced two Russian court actions. It advanced claims which mirrored its counterclaim in arbitration, as well as applications to restrain the claimants from continuing the London arbitration, and to obtain interim measures against their assets. NW2 argued that EU sanctions law was contrary to Russian public policy, relying on the fact that the arbitration was seated in what is characterised as an “unfriendly” state. 

The ICC tribunal made a series of peremptory orders directing NW2 to withdraw the Russian court proceedings, on the basis that they had been commenced in breach of the arbitration agreements. NW2 repeatedly failed to comply. The claimants applied to the English Commercial Court under section 42 of the AA 1996 seeking an order for compliance. 

Validity of tribunal’s peremptory orders 

Butcher J rejected NW2’s argument that the peremptory orders were invalid because the underlying orders made by the tribunal were not interim or conservatory measures for the purposes of Article 28.1 of the ICC Rules and the tribunal therefore lacked the jurisdiction to make them.

The peremptory orders were in fact valid interim measures; this was apparent from their nature as procedural orders which were made prior to and in the interim pending full trial. They were expressly stated to be subject to amendment by the tribunal, bound the parties for the duration of the arbitral proceedings, and were not awards. 

Butcher J rejected the suggestion that the potentially permanent consequences of withdrawing Russian proceedings under Russian procedural law deprived the orders of their interim nature. He cited UniCredit Bank v RusChem Alliance [2025] AC 1177, in which the court envisaged that an order requiring the termination of other court proceedings might be an interim or conservatory measure within the ICC Rules. 

Scope of section 41 

Butcher J also rejected NW2’s claim that the court’s power to enforce a peremptory order made under section 41(5) AA 1996 is limited to orders relating to a party’s failure to do something which is necessary for the “proper and expeditious conduct of the arbitration”. It argued that an anti-suit injunction was not such an order. Butcher J cited Pearl Petroleum Company Limited v Kurdistan Regional Government of Iraq [2015] EWHC 3361 (Comm) in which it was said that any order made by a tribunal is necessary for the proper and expeditious conduct of the arbitration. An order restraining NW2 from litigating arbitral claims elsewhere and preventing it from seeking to injunct the continuation of the arbitration "is one which can properly be said to be necessary for the proper and expeditious conduct of the arbitral proceedings". 

Exercise of discretion 

On discretion, Butcher J, referred to the guidance in Emmott v Michael Wilson & Partners Ltd (No 2) [2009] EWHC 1 (Comm) which emphasised that the court’s role is to support, rather than frustrate the arbitration. In general, it will decline to enforce a peremptory order only when such an order is not required in the interests of justice to assist the proper functioning of the arbitral process. NW2 relied primarily on the argument that compliance with the tribunal’s orders would expose its directors to civil or criminal liability under Russian law. However, the court was “wholly unpersuaded”. 

While Butcher J accepted that such matters could, in principle, be relevant, he was sceptical that there was any real risk of prosecution. Ensuring compliance with contractual obligations could not be characterised as acting against the legitimate interests of the company. The court also referred to evidence given in the matter which indicated that decisions falling within normal business risk, including compliance with arbitration clauses, do not attract criminal liability under Russian law. Even if some risk existed, it did not outweigh the strong policy interest in supporting arbitration and enforcing tribunal orders, particularly where proceedings were, in part, aimed at frustrating EU and UK sanctions against Russia. 

Comment

This decision emphasises the role of the English court in granting anti-suit relief to restrain breaches of an arbitration agreement. The judgment sends a clear message that the English courts will proactively prevent parties from bypassing their arbitration agreements, even in complex geopolitical contexts involving international sanctions.