A major commercial dispute over ownership of an international gas shipping company has escalated into new litigation after a federal court vacated a $102 million arbitral award tied to allegations of fraud.
The case now involves Reed Smith LLP, two of its partners, and multiple corporate executives. The dispute centers on control of Eletson Gas LLC and related shipping assets, including vessels tied to earlier transactions.
You can review the court’s decision vacating the arbitration award here:
Federal Court Vacates Arbitral Award
Ownership Dispute Moves Into Bankruptcy Court
Levona Holdings Ltd. filed a new adversary complaint in New York bankruptcy court. The company seeks a ruling that it holds ownership and control over preferred shares in Eletson Gas LLC.
The complaint also targets two vessels involved in the dispute, arguing they remain improperly tied to opposing parties.
Levona seeks at least $262 million in damages, along with punitive and treble damages.
Allegations Against Law Firm and Executives
Levona’s filing also accuses Reed Smith LLP and certain partners of misconduct during earlier arbitration proceedings.
The complaint seeks disgorgement of legal fees and compensation paid during the period of alleged disloyalty.
Levona argues that counsel played a central role in disputes that led to conflicting claims over ownership and control of the gas shipping enterprise.
Background of the Arbitration and Enforcement Action
The dispute originally arose from arbitration proceedings involving competing claims over Eletson Gas assets.
Eletson previously secured a $102 million arbitral award through JAMS arbitration and later pursued enforcement in federal court.
You can read more about the earlier enforcement action here:
Arbitration Enforcement Action
The arbitrator originally found that Levona breached contractual obligations tied to an international shipping agreement.
Court Vacates Award After Fraud Findings
U.S. District Judge Lewis J. Liman later vacated the arbitral award. The court found clear and convincing evidence of fraud during the arbitration process.
The ruling determined that misleading evidence influenced the original arbitration outcome.
This decision significantly altered the legal landscape of the dispute and reopened questions about ownership and damages.
New Litigation Expands Scope of Claims
Following the vacatur, Levona expanded its claims in bankruptcy court. The company alleges ongoing misconduct and continued financial harm.
The complaint also asserts that reputational damage and litigation costs have grown across multiple jurisdictions worldwide.
Levona argues that unresolved issues continue to affect control of the company and its assets.
Defense Pushback and Ongoing Dispute
Reed Smith has denied the allegations and stated that the new complaint repeats claims already raised in other proceedings.
The firm also argues that the litigation reflects broader attempts to target opposing counsel in complex commercial disputes.
Defendants maintain that they will vigorously contest the claims in court.
Why This Case Matters for Complex Commercial Litigation
This dispute highlights how arbitration outcomes can be revisited when fraud allegations arise.
It also shows how bankruptcy courts may become central forums in global commercial ownership disputes.
When arbitral awards are vacated, underlying ownership questions often return to litigation in a broader gas ownership dispute with significant financial exposure.
In cases like this gas ownership dispute, courts often revisit issues that parties believed were already resolved through arbitration.
Speak With a Commercial Litigation Attorney
If you are involved in a business ownership dispute, arbitration challenge, or cross-border commercial litigation, legal strategy is critical from the start.
Call (818) 900-5707 to speak with an attorney about your case and legal options.
We can help you understand your rights, evaluate enforcement risks, and navigate complex dispute resolution processes.
