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Court dismisses appeal challenging enforcement of UK obtained arbitral award in Nigeria

8 December 2020

By Joseph Onyekwere and Godwin Dunia

The court of appeal, Lagos has dismissed an appeal filed by a firm, Emerald Energy Resources Limited, challenging the decision of the federal high court, Lagos, which granted another firm, Signet Advisors Limited leave to enforce the arbitral award obtained from the London Centre of International Arbitration against it.
Signet had, in the suit marked FHC/L/CS/1596/2017 before Justice Babs Kuewumi, sought the leave of the court to enforce the arbitral award dated January 31, 2016, between the two parties in Nigeria.

The claim of the applicant at the lower court was that the arbitral award he got in England should be recognized and enforced in Nigeria in the same manner as a judgment and order of the court in Nigeria. 

But the respondent/appellant opposed the application on many grounds. However, Justice Kuewumi in his judgment granted the prayers of the applicant and held that the arbitral award should be enforced in Nigeria.

Dissatisfied with the decision, the respondent lodged six grounds of appeal, arguing that the court erred in law. It, therefore, urged the court of appeal to set aside the decision of the lower court.

However, a three-man panel of the court of appeal, led by Justice Ebiowei Tobi, in its decision dismissed the appeal of the appellant and affirmed the decision of the lower court.

“The argument of the appellant centred mainly on why the arbitral award should not be enforced. The reasons he gave were incapacity, the tribunal exceeding jurisdiction, arbitral award not being in line with public policy, and failure of the proceedings to satisfy a condition precedent to its enforcement under the law of England.
“These are points mostly under the provision of section 52 of the Arbitration and Conciliation Act (ACA). The lower court has a duty in law to make a decision as it affects the provisions of section 52 as the issue was raised by the appellant before it. The appellant has argued that the lower court did not consider the issue of the applicability of section 52 of the ACA to the decision of the case. I do not agree with the appellant in this submission that the lower court did not resolve the issues of law joined by both parties in the ruling,” Justice Tobi stated.

He noted that the appellant did not complain that it has incapacity at the point of signing the letters containing the arbitration clause. “In the circumstance, the enforcement of the arbitral award cannot be refused on the ground of incapacity. I also firmly hold that I cannot see how the award is against public policy either in Nigeria or in England,” he declared.

Elucidating on the reason for his decision, Justice Tobi said: “Finally on issue 3, the appellant submitted that the arbitral award should not be enforced in Nigeria because the award does not comply with Section 66 of the Arbitration Act of England, which makes provision for how an arbitral award can be enforced in England. I agree with the respondent to the effect that the English Arbitration Act that is Section 66, which is similar to section 52 of the ACA is not the applicable law to determine in what circumstance arbitral award from England can be enforced in Nigeria.

“The English Arbitration Act cannot dictate to Nigerian Courts the circumstance upon which an arbitral award can be enforced in Nigeria. Nigeria has its own laws that regulate arbitration procedures and specifically have made provisions on how foreign arbitral awards can be enforced. It is the Nigerian law that is, the ACA that will be followed.

“The relevant provision to determine how an arbitral award from England or anywhere in the world can be enforced is Section 51 of the ACA which I had reproduced above. The relevant provision is section 51 and once this provision is adhered to, the foreign arbitration award will be enforced in Nigeria. It is of necessity to mention that arbitral awards are binding on all parties and has the force of a judgment in Nigeria.”

He noted that there was no dispute from the appellant that there were agreements entered into between her and the respondent for the payment of fees as financial advisor to the appellant and the “faceless joint interest on OML-141”. The court further noted that there was also no dispute that the appellant submitted to arbitration voluntarily and participated fully in the arbitral tribunal.

“The appellant who now wants the arbitral award set aside or not to be enforced in Nigeria took part in the whole process. He appointed an arbitrator from his side and took part in all the proceedings. When the arbitration did not favour her, she is now looking for ways to set it aside.

“It is within the powers of the appellant to set aside the arbitration award within the provision of section 52 of ACA but the general principle and attitude of the court should be to uphold the arbitral award except it falls within the provision of section 52 of the ACA. The court should not treat arbitral awards with levity whether it is domestic awards or international awards. People who have submitted to arbitration should be made to accept the arbitral award except in deserving situations and the enforcement should not be refused for reasons that are not cogent,” Justice Tobi declared, adding that once the arbitration award satisfies the provision of its enforcement, courts of law and justice should not encourage the refusal of its enforcement.

He, therefore, agreed with the lower court that the arbitral award sought to be enforced has satisfied conditions and is enforceable.

“This appeal fails in its entirety and it is dismissed. The preliminary objection of the respondent to this appeal as mentioned earlier fails and it is dismissed with N1000, 000 in favour of the appellant. This appeal fails and it is dismissed. I award N500, 000 in favour of the respondent.

“In the circumstance, the ruling of Hon. Justice Babs O. Kuewumi of the Federal High Court in Signet Advisors Limited vs. Emerald Energy

Resources Limited in suit FHC/L/CS/1596/17 is affirmed,” he held.

Source: The Guardian

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