Gater Assets Ltd v Nak Naftogaz Ukrainiy

Gater Assets Ltd v Nak Naftogaz Ukrainiy

Even if the court has technical jurisdiction to order security for costs against an award creditor seeking enforcement of a New York Convention award, it is wrong in principle and not just to exercise that jurisdiction in favour of the award debtor. Such an order would impose more onerous conditions than for domestic awards, contrary to Article III of the Convention, and undermine the policy of facilitating enforcement of international arbitral awards. The appeal is allowed and the order for security for costs is set aside.

Parties
Claimant/appellant: Gater Assets Limited; Defendant/respondent: Nak Naftogaz Ukrainiy (Naftogaz)
Jurisdiction
England and Wales
Judgment Date
17 October 2007
Procedural Posture
Civil Appeal (arbitration Enforcement) / Appeal From High Court (commercial Court) to Court of Appeal
Outcome
Appeal allowed
Legal Topics
Enforcement of Foreign Arbitral Awards, Security for Costs, New York Convention, Public Policy Exception, Jurisdiction, Discretion in Security for Costs
Arbitration Civil Procedure International Law Enforcement of Foreign Arbitral Awards Security for Costs New York Convention Public Policy Exception Jurisdiction +1 more

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Parties

Gater Assets Limited

Claimant/appellant

Nak Naftogaz Ukrainiy (Naftogaz)

Defendant/respondent

Procedural Posture

Civil Appeal (arbitration Enforcement) / Appeal From High Court (commercial Court) to Court of Appeal

Legal Issues

  1. 1 Whether the court has jurisdiction to order security for costs against an award creditor seeking enforcement of a New York Convention award
  2. 2 Whether ordering security for costs in such circumstances is consistent with the Arbitration Act 1996 and the New York Convention
  3. 3 Whether, as a matter of discretion, security for costs should be ordered against the award creditor in this case

Ratio Decidendi

Even if the court has technical jurisdiction to order security for costs against an award creditor seeking enforcement of a New York Convention award, it is wrong in principle and not just to exercise that jurisdiction in favour of the award debtor. Such an order would impose more onerous conditions than for domestic awards, contrary to Article III of the Convention, and undermine the policy of facilitating enforcement of international arbitral awards. The appeal is allowed and the order for security for costs is set aside.

Court Disposition

Appeal allowed

Orders

  • Order for security for costs against Gater set aside
  • No security for costs required from Gater in enforcement proceedings