JPMorgan Chase Bank, N.A. v. VTB Bank, P.J.S.C.

Background

JPMorgan sought a preliminary injunction and an order stopping VTB from pursuing litigation in Russia. The dispute concerns a correspondent bank account at JPMorgan ending in *7557. The account terms included a forum-selection clause providing that disputes connected with the account terms, account documents, or account would be decided exclusively by courts in the country or state where the relevant bank branch was located. The court determined, based on JPMorgan’s showing, that this meant New York state or federal courts. The account terms also addressed sovereign immunity, service, United States law, and compliance with United States sanctions.

VTB had filed a case in the Arbitrazh court of the city of Saint-Petersburg and Leningrad region. The Russian case included claims against JPMorgan and its affiliates, and a Russian court issued an order freezing certain JPMorgan and affiliate assets in Russia. JPMorgan argued that the Russian case violated the forum-selection clause. The opinion states that VTB was served with the court papers and had actual notice but did not respond to the order to show cause and temporary restraining order or otherwise challenge JPMorgan’s showing. The court therefore found that VTB waived objections to the motion.

Court’s Analysis

The court found that JPMorgan satisfied the requirements for preliminary injunctive relief: irreparable harm; either a likelihood of success on the merits or sufficiently serious merits questions combined with a decisive balance of hardships; and that an injunction would serve the public interest.

The court found that VTB’s Russian litigation and the freeze order were causing JPMorgan and its affiliates irreparable harm. It also found that JPMorgan was likely to succeed on its claim that VTB breached the forum-selection clause by starting the Russian case. The court found that VTB agreed to the account terms when it opened the account, that the clause survived termination of the agreement, and that the claims in the Russian case fell within the clause’s scope.

The court separately found that an anti-suit injunction—an order directing a party not to continue litigation in another forum—was appropriate. It found that the parties were the same in the two matters even though VTB had added certain JPMorgan affiliates to the Russian case; that the New York action was dispositive of the Russian action; and that the Russian case threatened the jurisdiction of the New York courts and strong United States and New York policies favoring enforcement of forum-selection clauses. The court also considered international comity, meaning respect for foreign courts, and concluded that the injunction was not inconsistent with those principles.

Order

The court granted the preliminary injunction and extended the previously entered temporary restraining order for the duration of the action. VTB was immediately enjoined from continuing or maintaining the Russian case and from pursuing claims or relief against JPMorgan or its affiliates arising from or connected with the correspondent account in any jurisdiction other than New York state or federal court.

The order requires VTB to dismiss and discontinue the Russian case against JPMorgan and its affiliates, stop efforts to enforce the freeze order, seek to vacate the freeze order, and refrain from filing further related claims outside New York state or federal court. VTB is also prohibited from taking steps to evade or weaken the order. The order binds VTB and its directors, officers, agents, employees, attorneys, and persons acting in concert with them who have notice of the order. Violations may be punished as contempt of court.

JPMorgan was not required to post security because the court found that VTB was unlikely to suffer harm from complying with the order. The order also provides that, if specified actions by VTB or a Russian court prevent JPMorgan from seeking further relief and VTB fails to respond or defaults, the order will automatically convert into a permanent injunction that survives final resolution of the action, unless the court orders otherwise.