AIC Ltd v Federal Airports Authority of Nigeria
| Jurisdiction | England & Wales |
| Judge | Lord Briggs,Lord Sales,Lord Hodge,Lord Hamblen,Lord Leggatt |
| Judgment Date | 15 June 2022 |
| Neutral Citation | [2022] UKSC 16 |
| Court | Supreme Court |
[2022] UKSC 16
Lord Hodge, Deputy President
Lord Briggs
Lord Sales
Lord Hamblen
Lord Leggatt
Appellant
Riaz Hussain QC
Omar Eljadi
(Instructed by Squire Patton Boggs (UK) LLP (London))
Respondent
Paul Key QC
(Instructed by McDermott Will & Emery UK LLP (London))
Heard on 1 March 2022
Lord Briggs AND( with whom Lord Hodge, Lord Hamblen and Lord Leggatt agree)
A judge delivers judgment in open court and makes an appropriate order. A few hours, or days, later, but before the formal written minute of the order has been sealed by the court, the judge receives a request from one of the parties to re-consider both the judgment and the order. What should the judge do? This problem may arise at all levels in civil litigation, from interim and case management hearings, to final orders made at the end of a trial and even to orders made, but not yet sealed, on appeal. There is no doubt that the judge has power to re-open the judgment and order at any time until the order has been sealed, but the question raised by this appeal is by what process, and in accordance with what principles, should the judge decide whether or not to exercise that power?
In In re L (Children) (Preliminary Finding: Power to Reverse) [2013] UKSC 8; [2013] 1 WLR 634 (“ Re L”), at para 27, Baroness Hale of Richmond (with whom the other members of the court agreed) said that the judge should seek to resolve the problem by doing justice in accordance with the overriding objective. Re L was a case which had come up from the Family Court, concerning an interim order in a fact-finding hearing in relation to deciding what care arrangements should be made in relation to two small children. The overriding objective in that context was that specified in the Family Procedure Rules (“the FPR”). FPR Part 1.1(1) stated that the rules were a new procedural code “with the overriding objective of enabling the court to deal with cases justly, having regard to any welfare issues involved”. Thus in the context of that regime the overriding objective gives emphasis to securing the welfare of children.
The present case is governed by the Civil Procedure Rules (“the CPR”). CPR Part 1.1(1) states that the rules are a new procedural code “with the overriding objective of enabling the court to deal with cases justly and at proportionate cost”. CPR Part 1.1(2) sets out a list of six factors included in that concept. These include “enforcing compliance with rules, practice directions and orders”: CPR Part 1.1(2)(f). This sub-paragraph was added by amendment in 2013, after Re L.
The judge said that application of the overriding objective in this context was a question of balance. But the Court of Appeal said that was wrong. She should have conducted a two-stage analysis, asking at the first stage whether it was right in principle to entertain the application to re-consider at all and then, but only if that produced an affirmative answer, to consider the application on its merits at the second stage. The Court of Appeal also made other criticisms of the judge's approach.
In our view both the judge and the Court of Appeal were only partly right, but the obvious tension between their respective approaches means that it is now appropriate to re-state the applicable principles more fully than in Re L, not least because the overriding objective in the two contexts is different and the overriding objective in the CPR has itself been subject to relevant change since 2013. We shall do so by reference to the perhaps unusual facts of the present case, since our function is first to determine whether the judge and / or the Court of Appeal went wrong in their application of the relevant principles to those facts and secondly, if (as we consider) they both did, to re-exercise the judge's original discretion afresh, on the basis of those facts as they now are.
The proceedings in which this appeal has arisen are civil proceedings to obtain the court's permission to enforce in England and Wales a foreign arbitration award, under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted by the United Nations Conference on International Commercial Arbitration in New York on 10 June 1958 (“the New York Convention”). The successful claimant in the arbitration was AIC Ltd, the respondent in this appeal (“AIC”). The respondent in the arbitration was the Federal Airports Authority of Nigeria (“FAAN”), the appellant in this appeal. The arbitration took place in Nigeria pursuant to an arbitration agreement contained in a development lease between FAAN and AIC dated 17 February 1998. The judicial arbitrator (Kayode Eso J) ordered FAAN to pay US$48.13m to AIC, plus interest at 18% per annum by his award dated 1 June 2010 (“the Award”).
FAAN challenged the Award in proceedings in Nigeria and succeeded at first instance in June 2013, but AIC's appeal was allowed by the Nigerian Court of Appeal, on procedural grounds, in June 2015. The matter was remitted to the Federal High Court. But FAAN appealed to the Supreme Court of Nigeria and AIC cross-appealed to argue that the Nigerian Court of Appeal ought to have dismissed FAAN's set-aside application and granted AIC's application to enforce the Award. That is how matters rested until 31 January 2022 when the Supreme Court of Nigeria struck out both FAAN's appeal and AIC's cross-appeal and confirmed that the case should be remitted to the Federal High Court.
Meanwhile, on 10 January 2019 AIC started proceedings in England by issuing an application without notice to FAAN by way of an arbitration claim form to enforce the Award under the New York Convention pursuant to sections 66 and 101 of the Arbitration Act 1996 (“the Enforcement Claim”). The Enforcement Claim came before O'Farrell J who made an order for enforcement on 28 February 2019 without a hearing, with permission to FAAN to apply to set it aside within 22 days after service (“the without notice order”). FAAN did so apply, seeking an adjournment of the Enforcement Claim on the ground that its claim to set aside the Award was still pending in Nigeria. AIC cross-applied for a condition that any adjournment should be on terms that FAAN provided security.
These applications were heard together by Veronique Buehrlen QC sitting as a deputy judge of the High Court (“the Judge”) on 25 July 2019. By her reserved judgment delivered on 13 August 2019 she set aside the without notice order and adjourned the Enforcement Claim pending the outcome of the Nigerian set-aside proceedings, but on condition that FAAN provide security in the sum of US$24,062,000 in a form to be agreed. FAAN sought permission to appeal on 3 September, but this was refused by the Court of Appeal on 11 November 2019.
While that application for permission was pending, AIC sought and obtained from the Judge on 17 September 2019 an order that the security be provided by bank guarantee (“the Guarantee”) by 29 October 2019, with permission to AIC to apply to enforce the Award if the Guarantee was not forthcoming by then. By a last-minute application to the Court of Appeal made on 29 October FAAN obtained an extension of time for provision of the Guarantee until three days after the determination of its application for permission to appeal. Thus the extended deadline for the provision of the Guarantee became 4.30 pm on 14 November 2019, after the refusal of permission to appeal three days earlier.
That deadline passed without the Guarantee being provided. FAAN made another last-minute application on 14 November for a further extension of time until 5 December 2019, while AIC cross-applied for permission to enforce the Award. Both applications were heard by the Judge at a short oral hearing early in the afternoon on 6 December. The Guarantee was even then still not forthcoming, and leading counsel for FAAN told the judge that he could not properly seek further time or oppose the grant of permission for the enforcement of the Award. Almost inevitably the Judge gave an immediate oral judgment and made an order permitting AIC to enforce the Award, at about 14.20 on 6 December (“the Enforcement Order”). The Enforcement Order was not sealed at this stage.
In the meantime FAAN had been taking belated steps to obtain the requisite Guarantee. According to FAAN's evidence, it had to secure approval from various Government Ministries and the Central Bank of Nigeria for the arrangements to establish the Guarantee. FAAN had known since June 2019 that security would be sought, since 13 August 2019 that security would have to be provided and since 17 September 2019 that the security should be in the form of the Guarantee if FAAN wished to resist an order permitting AIC to enforce the Award. FAAN knew definitively on 11 November that the Guarantee was required to be made available by 14 November 2019. Despite this, it was only on 2 December 2019 that the Central Bank had been approached.
Thereafter, things progressed with some speed. On 6 December the Guarantee was issued by Standard Chartered Bank (“SCB”) and it was made available to FAAN's legal team later that afternoon. They passed a copy of it on to AIC by email at 17.17 on that day, stating that FAAN intended to apply to the Judge to re-open her judgment and the Enforcement Order given earlier that afternoon. That application was made by FAAN on 8 December, coupled with an application for relief from sanctions imposed for the late provision of the Guarantee. The applications were heard by the Judge on 13 December, after she had ordered that the Enforcement Order should not be sealed in the meantime.
Pursuant to an impressive ex tempore judgment delivered under pressure of time...
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