PJSC National Bank Trust v Mints and others  EWHC 871 (Comm) | ZFZ Postcard Cases
The Defendant business group (“O1G”) obtained financing from one of the Claimant banks (“the Banks”), secured by pledges provided by three associated Cypriot companies (“the LCIA Claimants”)
The second Claimant bank entered into transactions intended to release the pledges. The Banks alleged that those transactions involved a fraud in which O1G were implicated. The transactions were subject to LCIA arbitration agreements.
The LCIA Claimants commenced arbitrations against the Banks. They sought a declaration that the termination of the pledges had been valid and that they were not liable in damages. The Banks counterclaimed damages for fraud. The tribunal dismissed the declaratory relief claims and upheld the Banks’ counterclaim. O1G were not party to the LCIA arbitrations.
The Banks commenced Commercial Court proceedings. Seeking to amend their Particulars of Claim, they alleged that O1G were precluded from disputing certain issues because of the findings of the LCIA tribunal, on grounds of issue estoppel or abuse of process.
The claim was dismissed. Arbitral awards can create issue estoppels against privies to parties to those awards, the Gleeson test for privity applied. However, there was insufficient evidence to conclude that O1G were privies. The contractual context to the tribunal’s jurisdiction was considered a highly relevant factor. Foxton J commented on the difficulties of difficult establishing the preclusive effect of an award against anyone except the parties or their contractual privies. Moreover, the abuse of process amendment was deemed not realistically arguable.