Arbitration: Enforcement of Arbitral Award in England against FAAN! (Download)

Case No: A1/2019/3127

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM VERONIQUE BUEHRLEN QC
(SITTING AS A DEPUTY JUDGE OF THE HIGH COURT)
TECHNOLOGY AND CONSTRUCTION COURT
HT-2019-000060
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 26/11/2020
Before:
LORD JUSTICE FLAUX
LORD JUSTICE COULSON
and
LADY JUSTICE CARR
– – – – – – – – – – – – – – – – – – – – –
Between:
AIC LIMITED Appellant
– and –
THE FEDERAL AIRPORTS AUTHORITY OF NIGERIA Respondent
Paul Key QC (instructed by Mc Dermott Will & Emery UK LLP) for the Appellant
Riaz Hussain QC (instructed by Curtis, Mallet-Prevost, Colt & Mosle LLP) for the
Respondent
Hearing date: 20th October 2020
– – – – – – – – – – – – – – – – – – – – –

Approved Judgment

“Covid-19 Protocol: This judgment was handed down remotely by circulation to the parties’ representatives by email, release to BAILII and publication on the Courts and Tribunals Judiciary website. The date and time for hand-down is deemed to be 10:30am, Thursday 26th November 2020.”

LORD JUSTICE COULSON :
1 INTRODUCTION
1. At a hearing on 6 December 2019, Veronique Buehrlen QC, sitting as a Deputy High Court Judge (“the judge”) ordered that the appellant (“AIC”) have leave to enforce an Arbitration Award (“the Award”) in its favour in the sum of US$ 48 million odd (together with interest). That order was not in substance opposed. However, a week later, on 13 December 2019, the judge allowed an application by the respondent (“FAAN”) to reconsider her order of 6 December, and she rescinded AIC’s right to enforce the Award. She also granted FAAN relief from sanctions. AIC now seek to appeal the reconsidered order of 13 December.

2. The appeal raises issues as to the correct approach to an application to reconsider an order after its pronouncement in open court but before the order itself has been sealed and whether, in all the circumstances of this case, the judge properly exercised her discretion in reversing her earlier order. There was also a secondary issue, raised by FAAN for the first time on this appeal, to the effect that the judge’s earlier order did not contain any sanction, so that (despite the fact that FAAN originally made the application for relief from sanctions in accordance with the test set out in Denton v TH White [2014] EWCA Civ 906, [2014] 1 WLR 3926) this was not a case of relief from sanctions in any event.

3. In order to deal with these issues, it is unfortunately necessary to set out the history in some detail. I am satisfied that, throughout this tortuous process, the English Courts have endeavoured to do justice between the parties, and repeatedly made themselves available at short notice to resolve the seemingly endless disputes that have arisen between them. Little else in this unedifying story is deserving of the same approbation.

2 THE FACTUAL BACKGROUND
4. AIC is a Nigerian construction and property development company. FAAN is an entity incorporated by a Nigerian governmental decree. It operates and maintains Nigeria’s federal airports. The evidence demonstrates that FAAN is, to all intents and purposes, a State Agency. Its revenues are its own, and its Governing Board has the power to
decide how that revenue may be spent.

5. By a Deed of Lease dated 17 February 1998, FAAN leased a site at Lagos airport to AIC for a term of fifty years, in order that AIC could develop a hotel and resort complex there. However, by letter dated 16 May 2000, FAAN directed AIC to refrain from work on the hotel development, and AIC have never been permitted to continue with the
construction of the hotel and resort. AIC claimed damages against FAAN for this breach of the Deed of Lease.

6. The dispute between the parties was referred to a Nigerian-seat arbitration inaccordance with an agreed arbitration clause. The commencement of the arbitration was delayed for 6 years because FAAN refused to appoint (or agree to the appointment of) an arbitrator. Eventually, there was a full hearing. On 1 June 2010, the Award was
made by Mr Justice Kayode Eso in favour of AIC in the sum of over US $48 million together with interest. It has never been suggested that this was anything other than a valid arbitration award.

7. In July 2010, FAAN applied in the Nigerian High Court to set aside the Award on various grounds. Although that challenge was upheld at first instance by Buba J, it was overturned on appeal (albeit on a jurisdictional issue). FAAN sought to appeal again, this time to the Supreme Court of Nigeria. Unhappily, ten years after the promulgation of the Award, the appeal in respect of the application to set aside has still not been resolved, and no-one can say when it might even be considered. Indeed, the gloomy view was expressed that resolution of the matter in Nigeria could still be many years away.

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