NEW YORK, Jan 12 (Reuters Legal) - A New York state appeals court on Wednesday reinstated an antitrust lawsuit against a reinsurer created in the 1990s to rescue underwriters at Lloyd's of London from soaring asbestos and environmental liabilities.

Global Reinsurance Corp - U.S. Branch sued Equitas Ltd, alleging the complex arrangement that led to the creation of Equitas was anti-competitive and was used to the financial disadvantage of reinsurers like Global Re.

A lower court dismissed the suit in March 2009, but the appeals court reversed the decision and reinstated the case in a 4-1 ruling.

The appellate court found the Global Re complaint was incorrectly dismissed, because the lower court did not properly consider Global Re's claims about the worldwide market for reinsurance and the status of Lloyd's within that market.

Global Re, which says it was once the world's sixth-largest reinsurer, has been in run-off since 2002. An insurer or reinsurer in run-off does not write new business and operates only to maintain and close out its existinG book of business.

Lloyd's of London, a cluster of competing insurance syndicates that specialize in covering large-scale risk, traces its origins back more than 300 years. Lloyd's underwriters are known in the industry as "names."

In 1996 Lloyd's names formed Equitas to reinsure their growing pre-1993 non-life insurance liabilities, which included claims for asbestos exposure and other environmental problems.

In 2006 Equitas reinsured its liabilities with Berkshire Hathaway unit National Indemnity Co, a deal under which National Indemnity took on all of Equitas' staff and operations. Berkshire unit Resolute Management Services Ltd took over management of the run-off process.

In June 2009 Britain's High Court approved the transfer of liabilities from the names to Equitas.

An Equitas representative was not immediately available to comment.

The case is Global Reinsurance Corp - U.C. Branch vs. Equitas Ltd,`New York State Supreme Court, Appellate Division (1st Dep't), Nos. 1547, 1547A, 1547B. The appellate opinion lists Edward Krugman of Cahill Gordon & Reindel in New York for Global Re. Kevin Arquit of Shimpson Tacher & Bartlett in New York is listed for Equitas.

(Reporting by Ben Berkowitz of Reuters; Additional reporting by Terry Baynes of Reuters Legal)