Russian claims have reached a record high in London's commercial courts, despite the ongoing Ukraine conflict and the tightening of sanctions against Russian companies and individuals, according to new research. 

That is the headline finding of Portland's 2023 Commercial Courts report, which reveals that 38 Russian individuals and 19 companies featured in the 257 judgments handed down in the Business and Property Courts from April 2022 to March 2023.

It is the second year running that Russia has topped the list of foreign nationalities represented; in contrast, the number of Ukrainian parties has fallen to zero.

The total of 650 international litigants has also reached a new high and is the most diverse group yet in terms of the number of countries represented.

Cases involving senior Russian businesses, executives and sanctioned entities, include the Bank Otkritie litigation, which was the subject of an important judgment in January by Mrs Justice Cockerill on the relationship between sanctions, judgments and litigation. 

A poll of 1,000 respondents by Portland found that 51% of the British public is hostile towards the English and Welsh courts being used by Russian litigants. However, senior lawyers have argued strongly in favour of Russian litigants’ right to be represented.

Cab-Rank Rule

High-level support for the commercial Bar to act in Russian-sanctioned cases was provided last year by Nick Vineall KC, who, writing as the then vice-chair of the Bar Council, cited the rule of law and the cab-rank rule, which requires suitably qualified barristers to take on cases if they are available.  

‘We must comply with the cab-rank rule even if – especially if – it means acting for clients on the wrong side of public opinion,’ wrote Vineall, who is now Bar Council chair.

Meanwhile, the absence of Ukrainian litigants comes despite their being ranked among the most common nationalities in previous years, from a historic peak of 25 between April 2020 and March 2021. 

Natalia Selyakov a Kyiv-based partner at Dentons, said: "Historically, arbitration was the most popular tool to resolve cross-border disputes with Ukrainian counterparties, although… recent legislative developments may enhance litigation activity in foreign courts.” 

While Russian claims grab the headlines, the internationalisation of London's courts was evident through the 78 nationalities represented, with foreign litigants comprising 60% of the total. The US, India and Singapore were the next most common nationalities represented after Russia. 

Singapore and India

Lord Neuberger, the former President of the UK Supreme Court, was surprised by the increase in Singaporean and Indian litigants, calling it "a particular compliment to London, given the keenness of the Singaporean courts and arbitration institutions to attract southern Asian international dispute resolution to Singapore."

Some 87% of survey respondents, meanwhile, agreed that ‘English courts and English law have an important impact on the UK's international reputation’. 

While London's courts are far from at pre-Covid levels of activity, the report showed an 11% increase in the number of judgments handed down, with 1,120 litigants appearing, a 23% increase on last year. 

That suggests greater resilience to challenges like Brexit, increased competition from other dispute resolution centres, Covid-19 and the global economic downturn, although this last factor might yet fuel disputes.

The report recorded the highest proportion of EU litigants since 2018 (15.3%), showing that, notwithstanding the absence of UK accession to the Hague and Lugano Conventions, EU-based litigants still regard London highly as a centre for international disputes. This is, however, the first year an EU member state has not featured in the top five litigant nationalities reported.

Representing 40% of the total, there was a substantial fall in the number of UK commercial litigants, although Neuberger said both domestic and international cases would drive the economy, directly and indirectly. It was also the second year in a row that cases between UK litigants has decreased.

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Climate Change

The survey revealed overwhelming support for climate change litigation in the UK, with lawsuits praised as a way to hold companies to account for environmental damage.

Nearly 90% of the respondents agreed parent companies should be held accountable for damage caused by a subsidiary. Some 81% agreed with the proposition that the 'courts should be prepared to intervene to force private companies to meet more ambitious climate change-related targets’.

Philip Hall, head of Portland's disputes practice, said: "The public's strong feelings on Russians using the English [and Welsh] courts, and on environmental litigation being used as a force for good, shows once again that the law does not exist in a vacuum.

“Litigation, commercial strategy and reputation can no longer be separated. Today, every entity involved in litigation must consider how the audiences that matter to them will react.”

London's status as a major hub for international disputes will be showcased at London International Disputes Week, which takes place from from 15-19 May.

The GLP Law Over Borders ESG comparative guide is edited by Ulysses Smith, of Debevoise & Plimpton, and features contributions from leading law firms including: Bruchou & Funes de Rioja (Argentina), McKinney Bancroft & Hughes (Bahamas), Pinheiro Neto Advogados (Brazil), Carolina Queiroga Nogueira (Chile), Zhong Lun Law Firm (China), Debevoise & Plimpton (EU , Germany and US), Hannes Snellman Attorneys (Finland), Legance (Italy), City-Yuwa Partners (Japan), Von Wobeser y Sierra (Mexico), De Brauw Blackstone Westbroek (Netherlands), Rodrigo, Elías & Medrano (Peru), Kim & Chang (South Korea), Hannes Snellman Attorneys (Sweden), MME Legal (Switzerland), and Herbert Smith Freehills (UK).

For further information about the Law Over Borders comparative guides email associate publisher [email protected].