Hong Kong Court maintains anti-suit injunction restraining foreign court proceedings that violate the contractual arbitration agreement

In Linde GmbH and Linde PLC v RusChemAlliance LLC [2023] HKCFI 2409 and the subsequent judgment of  Linde PLC v RusChemAlliance LLC [2025] HKCFI 3720, the Hong Kong Court of First Instance reaffirmed that a valid Hong Kong‑seated arbitration agreement governed by Hong Kong law will be strictly enforced by way of an anti-suit injunction - even in the face of foreign sanctions regimes or domestic laws purporting to confer exclusive jurisdiction elsewhere - and that the arbitral process will be rigorously protected.

Background

Linde GmbH and Linde PLC (the “Plaintiffs”) entered into construction contracts with RusChemAlliance LLC (the “Defendant”) for projects in Russia. The contracts were governed by English law and provided for HKIAC arbitration seated in Hong Kong.

Following the imposition of EU sanctions, the Plaintiffs suspended performance and issued sanctions notices. The Defendant alleged breach and commenced court proceedings in Russia, obtaining a freezing order over the Plaintiffs’ assets in Russia despite the arbitration agreement.

The Plaintiffs initiated HKIAC arbitration and successfully obtained an anti-suit injunction from the Hong Kong Court of First Instance restraining the Russian proceedings. The Defendant applied to the court to discharge the injunction, arguing that it undermined the Russian freezing order which involved matters outside the scope of the arbitration and raised comity concerns. However, the court disagreed, dismissing the application and continuing the injunction.

Legal principles

In reaching its decision, the court applied the well-established English law principle: “The Court will be ready to grant an injunction to restrain proceedings brought in breach of an agreement to arbitrate, and will ordinarily exercise its discretion to grant such an injunction unless the defendant can show that there is a strong reason to the contrary”.

Strong reasons must be unforeseeable at the time of contracting or so exceptional that they go to the interests of justice. However, in this case, the effect of sanctions was within the parties’ reasonable contemplation when the contracts were signed. The Defendant’s agreement to arbitrate under HKIAC, rather than litigate in Russia, provided no basis for departing from that bargain.

The court rejected the Defendant’s claim that sanctions deprived it of access to justice, describing the argument as “grossly exaggerated, if not totally based on false premises.” Sanctions had no legal effect in Hong Kong, and the Defendant retained full access to legal representation. A foreign statutory rule purporting to confer exclusive jurisdiction cannot override a valid arbitration agreement governed by Hong Kong law. The parties’ contractual agreement to arbitrate prevailed, and Hong Kong courts will not defer to foreign legislation that conflicts with the agreed forum

Developments in 2025

In 2025, the Hong Kong Court of First Instance was again asked to give clarifications on the Defendant’s (RusChemAlliance LLC) non‑compliance with an earlier Hong Kong court order. The court held that the “the only relevant issue is whether compliance is possible under Russian law” (i.e. whether the Defendant could comply with the court order requiring it to take steps to halt its Russian proceedings). Arguments that compliance would be commercially disadvantageous or strategically harmful to the Defendant and in breach of Russian procedural law were ruled as irrelevant.

Implications

These decisions - in 2023 and again in 2025 - collectively underscore the robustly pro‑arbitration attitude of the Hong Kong courts.

Hong Kong courts are willing to issue and maintain anti‑suit injunctions to protect the integrity of Hong Kong‑seated arbitrations, even amid intense cross‑border and sanctions‑related pressure. The latest judgment in 2025 further re-affirms the strictness of compliance obligations and that Hong Kong courts will not tolerate tactics aimed at undermining arbitration through foreign proceedings.

Parties cannot rely on domestic statutes in their own jurisdiction to defeat a contractually agreed arbitral forum. Even where sanctions disrupt performance and counterparties seek refuge in local courts, a clearly drafted arbitration agreement appears to remain a powerful shield. Sanctions alone will not establish that arbitration in a neutral seat is unfair or impossible; concrete evidence is required to prove otherwise.

If Members have any questions in relation to the above issues they are invited to contact the Club for further information.