Cross-Jurisdictional Clashes In the RCA v. Linde Dispute: Latest Developments

Jurisdictional battles generated by the dispute between Ruschemalliance LLC ("RCA") and entities within Linde GmbH's group ("Linde") arising from the termination of the EPC contract between RCA and Linde show no signs of abating. The contest between competing injunctions issued by Russian and English courts has reached a new stage, and RCA's efforts to enforce against Linde’s assets, and Linde’s attempts to counter such enforcement, are in full swing.

RCA's enforcement action in Kazakhstan and Linde's injunction application against RCA in the Dutch courts (discussed below) demonstrate how these opposing parties have sought to protect their interests in courts outside of Russia. While the outcomes of these and other similar proceedings will be significant, they may not necessarily determine the eventual commercial fallout from the disputes. Ultimately, the practical effect of various court rulings may be determined largely by the location of the parties' respective assets, and not just by the prospects of enforcing in other jurisdictions the rulings issued by Russian Courts in disregard of arbitration agreements.

In this Part 6 we provide an overview of recent proceedings arising from the dispute between RCA and Linde and summarise the current state of play in this rapidly developing multi-jurisdictional tussle. 

RCA V. LINDE DISPUTE AND RELATED PROCEEDINGS IN THE ENGLISH COURT

The dispute between RCA and Linde has triggered a series of related international proceedings before state courts and arbitral tribunals. The facts of the case, discussed in more detail in our previous Legal Update, can be summarised as follows:

• In 2021, RCA entered into EPC contracts with Linde and another contractor for the construction of LNG facilities in Russia. The EPC contracts were governed by English law and contained an arbitration agreement providing for Hong Kong-seated arbitration. UniCredit, Bayerische Landesbank and other banks (the "Banks") provided on-demand bonds in favour of RCA guaranteeing the performance of the EPC contracts. The bonds were governed by English law and provided for disputes to be resolved by arbitration seated in Paris. 
• Following Russia's invasion of Ukraine in February 2022, the EU extended sanctions on Russia and Russian entities, and Linde was informed by the German government that it could not continue with the project. In response, RCA sought to terminate the EPC contracts, made calls on the bonds and subsequently issued separate proceedings in the Russian courts against Linde under the EPC contract and against the Banks under the bonds, notwithstanding the arbitration agreements.
• RCA commenced litigation in Russia relying on the amendments to the Arbitrazh (Commercial) Procedure Code introduced in 2020 which allow Russian courts to assert exclusive jurisdiction even where a dispute is subject to an arbitration/non-Russian jurisdiction agreement, if such an agreement is deemed inoperable because the Russian party may face obstacles to access to justice in the contractually agreed forum. For a discussion on the 2020 amendments to the Arbitrazh Procedure Code please see Part 4 of this Series.

Proceedings then began outside of Russia. The Banks applied to the English court for anti-suit injunctions to restrain RCA from initiating or maintaining its suits in Russia in breach of applicable arbitration agreements. On appeal, the UK Supreme Court upheld UniCredit's permanent injunction against RCA in April 2024. In June 2024, Bayerische Landesbank obtained similar relief from the English Commercial Court which followed the approach in UniCredit’s injunction proceedings. In sum, all five banks succeeded in their injunction applications.

However, undeterred by the injunctions issued by the English court, RCA has maintained existing proceedings in Russia and initiated new ones, including outside Russia, in relation to the same matter. The key recent developments are described below, in chronological order.

RCA'S ENFORCEMENT PROCEEDINGS IN KAZAKHSTAN

Having obtained a favourable judgment against Linde in Russia, RCA sought to enforce it in Kazakhstan against the assets of two Linde entities – Linde Holdings Netherlands No. 3 B.V. ("Linde No. 3") and Linde UK Holdings No. 2 Limited ("Linde No. 2"). The assets targeted by RCA consisted of the participation interests Linde No. 2 and Linde No. 3 held in a Kazakh-registered Linde Gas Kazakhstan LLP. Kazakhstan is not on Russia's list¹ of ‘unfriendly’ states, and this could be one of the factors why this jurisdiction was chosen to enforce the judgment outside of Russia.

RCA's application for enforcement was rejected by the Kazakhstan court on 26 August 2024 (case no. 7527-24-00-00-2m/528). In its judgment dismissing RCA's suit, the court referred to the applicable local rules which provide, inter alia, that enforcement proceedings should be initiated at the location of the relevant legal entity. If the judgment debtor's location is unknown, the judgment can be enforced at the location of the debtor's property. The court held that RCA knew the location (place of registration) of Linde No. 2 and Linde No. 3 (undisputed by RCA) and rejected the enforcement application on the basis that Linde No. 2 and Linde No. 3 were not located within Kazakhstan.

The court did not indicate how it might have approached the enforcement of the relevant judgment had the respondent entities been established in Kazakhstan, which remains an open question. The decision to refuse enforcement, and the reasoning, was subsequently upheld on appeal on 18 October 2024.  

LINDE NO 3'S ANTI-SUIT INJUNCTION APPLICATION IN THE NETHERLANDS

A Dutch-registered company within the Linde group, Linde No. 3, issued proceedings in the Netherlands against RCA to counteract the Russian proceedings and RCA's enforcement of the Russian judgment (the "Dutch Action" - case no. C/10/688624/KG ZA 24-1037). Linde No. 3 sought an injunction against RCA initiating any proceedings concerning the relevant contracts and an order that RCA terminates any proceedings already pending. Linde No. 3 also requested the court to issue an order prohibiting enforcement against it and to impose penalties on RCA for any breaches of the court orders. RCA responded by promptly applying for an injunction in the Russian courts to enjoin Linde No. 3 from pursuing the Dutch Action (case no. А56-118993/2024).

The Dutch court dismissed Linde No. 3's application for lack of jurisdiction. In its 2 January 2025 judgment, the court held that, as RCA was not established in the Netherlands, the jurisdiction of Dutch courts could not be based on the respondent's domicile. Considering whether jurisdiction could be established on the basis of obligations arising from tort where the damaging event occurred or could occur in the Netherlands, the court noted that the place of the alleged damaging event was not the Netherlands, but Russia (RCA's proceedings against Linde) and Kazakhstan (RCA's enforcement proceedings against, inter alia, Linde No. 3). It also rejected the argument that Linde No. 3's costs of pursuing the injunction in Dutch courts constituted the requisite damage that occurred in the Netherlands.

Similar to the Kazakh court, the Dutch court also did not comment on whether, had jurisdiction been established, Linder No. 3's application could have been successful on the merits.

APPLICATIONS BY THE BANKS TO WITHDRAW ANTI-SUIT INJUNCTIONS

It was recently reported that:

• Some of the Banks have returned to the English courts to lift the injunctions against RCA. UniCredit, which fought a long legal battle to obtain a permanent anti-suit injunction culminating in a Supreme Court victory, applied to the Court of Appeal to reverse the measure. On 11 February 2025 the Court of Appeal discharged UniCredit’s injunction against RCA.
• UniCredit had no choice but to withdraw the English injunction, as otherwise it would face a fine of EUR 250 million being imposed by Russian courts due to a competing injunction obtained by RCA in Russia which ordered UniCredit, inter alia, to cancel the injunction issued by English courts. UniCredit claimed that it has been practically impossible to enforce the English injunction since RCA does not have assets outside Russia. Maintaining the injunction, on the other hand, carried a real risk of significantly increasing UniCredit's liabilities in Russia which could be enforced against UniCredit's assets in that jurisdiction.
• UniCredit has announced that some of the other Banks have already either withdrawn their injunction or submitted a similar application to cancel the injunction against RCA.

COMMENTS

The tangle of proceedings that emanated from the original RCA v. Linde dispute illustrates the wide-ranging legal and commercial consequences that can follow high-impact events, such as Russia's invasion of Ukraine and the imposition of international sanctions. Just a single LNG project undertaken by RCA involves a suite of contracts prone to disruption and a multitude of parties that can be drawn into protracted legal proceedings with unpredictable outcomes. RCA v. Linde underscores the importance of a careful prospective assessment of potential exposures and strategic risk mitigation even against unprecedented events. Once the risk materialises, the scope for taking effective legal action to protect a business and/or assets may be limited depending on where they are located at the time.

These recent developments are also a timely reminder that it may be challenging to ensure that decisions taken by courts of one country can be effective against a party in another country. Cross-border enforcement can present many obstacles, ranging from differing jurisdictional rules to geopolitical tensions. Nevertheless, an injunction backed by a fine and/or potential criminal liability can in some circumstances be a very effective tool to put pressure on opponents. International businesses would, therefore, be well advised to carefully (re)appraise their exposures and potential legal vulnerabilities with respect to the increasingly volatile and unpredictable international geopolitical environment.

Mayer Brown’s diverse and multi-office international arbitration team is well-equipped to navigate these complex matters and provide strategic advice to ensure the best outcome in contentious matters. For further information or advice, please contact any of the authors, or your usual Mayer Brown contact.