Gater Assets Ltd v Nak Naftogaz Ukrainiy [2007] EWCA Civ 988 (17 October 2007)

Gater Assets Ltd v Nak Naftogaz Ukrainiy [2007] EWCA Civ 988 (17 October 2007)

The Court of Appeal held that, while the CPR regime allows a defendant to apply for security for costs in a claim, enforcement proceedings for a New York Convention award are not ordinary claims but are based on an existing award, and the rationale for security for costs does not apply in the same way. The court found that ordering security for costs against an award creditor seeking enforcement would be inconsistent with the policy of the New York Convention and the Arbitration Act 1996, which aim to facilitate enforcement subject only to limited exceptions. The appeal was allowed and the order for security for costs was set aside.

Citation
[2007] EWCA Civ 988
Parties
Appellant/claimant: Gater Assets Limited; Respondent/defendant: Nak Naftogaz Ukrainiy (Naftogaz of Ukraine)
Jurisdiction
England and Wales
Judgment Date
17 October 2007
Procedural Posture
Appeal (security for Costs in Enforcement of Foreign Arbitral Award) / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal allowed
Legal Topics
Enforcement of Foreign Arbitral Awards, Security for Costs, Public Policy Exception, Fraud in Arbitration, Interpretation of CPR 25.12, Arbitration Act 1996
Arbitration Civil Procedure International Law Enforcement of Foreign Arbitral Awards Security for Costs Public Policy Exception Fraud in Arbitration Interpretation of CPR 25.12 +1 more

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Parties

Gater Assets Limited

Appellant/claimant

Nak Naftogaz Ukrainiy (Naftogaz of Ukraine)

Respondent/defendant

Procedural Posture

Appeal (security for Costs in Enforcement of Foreign Arbitral Award) / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether security for costs can be ordered against a claimant seeking to enforce a New York Convention arbitral award under section 101 of the Arbitration Act 1996
  2. 2 Whether such an order is consistent with the New York Convention and the Arbitration Act 1996
  3. 3 Whether the respondent/award debtor is in substance a 'defendant' for the purposes of CPR 25.12 in enforcement proceedings

Ratio Decidendi

The Court of Appeal held that, while the CPR regime allows a defendant to apply for security for costs in a claim, enforcement proceedings for a New York Convention award are not ordinary claims but are based on an existing award, and the rationale for security for costs does not apply in the same way. The court found that ordering security for costs against an award creditor seeking enforcement would be inconsistent with the policy of the New York Convention and the Arbitration Act 1996, which aim to facilitate enforcement subject only to limited exceptions. The appeal was allowed and the order for security for costs was 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