In 2007, the second printing office of a state bureau which is a state enterprise founded by the Ministry of Health of the Russian Federation (state enterprise) entered into a guarantee agreement with the bank "Moscow Capital" (Bank) to ensure the performance of loan obligations by Paritet Consulting LLC. In 2010, when the debtor did not perform its obligations under the loan agreement, the Bank initiated arbitration against the guarantor and obtained an arbitral award ordering the state enterprise to pay to the Bank approximately US$20 million.

The Bank obtained an enforcement writ through the Russian courts (two instances) and then assigned its claims to an off-shore company, Vergillios LMS Limited. As a result of the enforcement proceedings, the state enterprise would have been deprived of a number of architectural buildings in the centre of Moscow (being the only property of the enterprise against which the award could be enforced).

The Supreme Commercial Court, approached by the Federal agency for the management of state property, annulled the enforcing judgments of the courts of two instances and sent the case for reconsideration to the first instance court. The Supreme Commercial court instructed the lower courts to pay particular attention to the validity of the guarantee agreement, the legal capacity of the state enterprise to enter into this kind of agreement and the consequences the enforcement of such an award would have on the public interest and basic principles of Russian law.

The involvement of the Supreme Commercial Court has prevented the sale of the historic buildings which were allegedly part of the fraudulent scheme. In 2008-2009, several state enterprises applied for and obtained the title to the historical buildings in Moscow. After that, the enterprises entered into guarantee agreements with the same bank (Moscow Capital) and became liable for payments to the bank after the debtors failed to return the loans to the bank. The scheme is reportedly under criminal investigation at the moment.

It remains to be seen which grounds will be used by the lower courts to refuse the enforcement of the arbitral award (invalidity of the arbitration clause, incapacity of the party to a contract or public policy).