LLC EuroChem North-West-2 and anr v Société Générale S.A. and ors [2025] EWHC 1938 (Comm)

In an important judgment on the effect of international sanctions, Mr Justice Bright held that the defendant banks were not liable to make payment under bonds (worth over €280 million) which they had issued.

The Court found that the first claimant was both owned and controlled by the Russian oligarch, Andrey Melnichenko (who had been subject to EU sanctions before demands under the bonds had been made). On that basis, the Court concluded that payment under the bonds would: (i) be illegal in the place of performance pursuant to the rule in Ralli Bros; and (ii) contrary to public policy.

The Judgment contains important guidance on identifying the place of performance of obligations under financial instruments (at [441] – [458]) and the meaning of “ownership” (at [260] – [279]) and “control” (at [294] – [305]) for the purposes of EU sanctions.

James Weale acted (with Neil Kitchener KC and Robert Harris) for the successful ING Bank defendants (instructed by a team at Clifford Chance LLP led by Kelwin Nicholls and assisted by Charles Joseph and Nicholas Michalakas).