In Gater Assets Ltd v Nak Naftogaz Ukrainiy  EWHC 237 (Comm), the applicant company, Nak Naftogaz Ukrainiy (NNU), applied to set aside an order permitting Gater Assets Ltd (Gater) to enforce as a judgment a New York Convention arbitration award issued by the International Commercial Arbitration Court of Moscow. NNU was a state enterprise which distributed gas in the Ukraine, supplied by a Russian company (R). R subsequently claimed that NNU had misappropriated gas worth over $90million. R had entered into an insurance and reinsurance structure via its captive insurer intended to vest in a subrogated non-Russian reinsurer the right to pursue R's claim against NNU. Pursuant to those arrangements an arbitration was commenced against NNU by a Mongasque reinsurer (M) and an award was made in favour of M, the benefit of which was then assigned to Gater. The English Court made an order enforcing the award. NNU applied to set aside the order, calling into question the true nature of the reinsurance arrangements and arguing that M had sought to mislead the tribunal as to their validity.
Mr Justice Tomlinson found that the insurance and reinsurance structure was unusual, viewed through English eyes, in that neither insurer nor reinsurer carried any financial risk. However, it was not the court's function in the circumstances of this application to decide whether the (re)insurance arrangements were effective as a matter of Russian law. In any event, NNU was not able to prove that M had engaged in any conduct to mislead the tribunal in a manner which induced it to render an award which would not otherwise have been given. Accordingly there was no basis upon which the court could set aside the order permitting enforcement of the award and NNU's application was dismissed. Whilst this case turns very much on its own facts, the judgment illustrates the complex issues that can be involved in attempting to enforce foreign judgments and arbitration awards.