Continental Transfert Technique Ltd v The Federal Government of Nigeria and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Hamblen |
| Judgment Date | 30 March 2010 |
| Neutral Citation | [2010] EWHC 780 (Comm) |
| Docket Number | 2008 Folio 1280 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 30 March 2010 |
[2010] EWHC 780 (Comm)
Mr Justice Hamblen
2008 Folio 1280
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand London WC2A 2LL
MR P KEY (instructed by Eversheds LLP) appeared on behalf of the Claimant.
MS J OKOYE (instructed by Gromyko Amedu) appeared on behalf of the First to Fourth Defendants.
The Fifth Defendant was not represented.
APPROVED JUDGMENT
Introduction
The claimant, CTTL, entered into a supply agreement dated 25 th May 1999 with the Federal Ministry of Internal Affairs of Nigeria (now known as the Ministry of the Interior) for a combined expatriate residence permit and aliens card scheme, pursuant to which CTTL was to produce and supply electronic residence cards for the Federal Ministry of Internal Affairs for use by the Nigeria Immigration Service. The agreement was subject to arbitration in Nigeria governed by Nigerian law. The arbitration clause provided as follows:
"In the event of any dispute, claim or difference which may arise out of or in relation to this contract and touching on the performance or breach thereof, the same shall first be settled amicably between the parties hereto and failure to reach settlement the matter shall be referred to arbitration in accordance with the provisions of the Arbitration and Conciliation Act Cap 19 Vol 1 Laws of the Federation of Nigeria 1990. The party wishing to refer the matter to arbitration shall serve on the other party a 7 days notice to refer the matter to arbitration. On receipt of such notice both parties shall appoint an arbitrator who shall preside over the matter. The Law governing the proceedings shall be Nigeria Law and the award of the arbitrators shall be final and binding on all the parties hereto."
It also provides that the governing law of the contract shall be the laws of the Federal Republic of Nigeria.
Following disputes under the agreement an arbitration duly took place between CTTL and the first to third defendants, and the award was made on 14 th August 2008. The sums due from the first to third defendants under that award amounting to NGN29,660,166,207.48 plus interest and costs remain unpaid. The sterling equivalent to that sum as at the date of due payment was approximately £140 million.
The UK proceedings.
The New York Convention applied to the award as the seat of the arbitration was Nigeria, and Nigeria is a party to the Convention. CTTL applied under section 101 of the Arbitration Act 1996 to enforce the award in this jurisdiction and for judgment to be entered in terms of the award by an application dated 9 th December 2008. An interim order granting permission to enforce the award and enter judgment was made on 10 th December 2008 by Walker J, and it provided the defendants with a period of 2 months and 22 days from service to apply to set it aside. The order of Walker J provided that judgment be entered in the terms of the award against the first to fourth defendants ("the defendants") for the full Nigerian naira amount. It then provided that, pursuant to CPR 62.18( 9), CPR 62.14 and section 12(2) of the State Immunity Act 1978, the defendants had the right to make an application to the court within 2 months and 22 days after service of the order to set aside the order and that the award may not be enforced until after the end of that period or any application had been made and disposed of.
Service of the interim order and application by way of service on a foreign state was made through the Foreign and Commercial Commonwealth Office pursuant to CPR 6.44 and section 12(1) of the State Immunity Act 1978 on 13 th March 2009. The period of 2 months and 22 days expired, therefore, on 4 th June 2009.
The defendants made no application to set aside the interim order. CTTL then applied for the order granting permission to enforce the award and enter the judgment to be incorporated in a single final order from the court. Such an order was made by Andrew Smith J dated 24 th June 2009 and judgment was entered on that date for the sums due. That order provided that judgment be entered against the defendants in terms of the award for the full Nigerian naira amount. It also provided:
"This order is absolutequo; and the claimant is entitled to apply for enforcement of this judgment."
CTTL proceeded to enforce the judgment of the court by way of charging orders over property owned by the Nigerian National Petroleum Corporation (NNPC). By an order of Christopher Clarke J dated 28 th September 2009 NNPC was joined as a fifth defendant to these proceedings and the charging order was granted in favour of CTTL over real property of NNPC. A further order of 28 th September 2009 granted a charge in favour of CTTL over securities held by NNPC in a company called Duke Oil Services Limited incorporated in the jurisdiction. An interim third party debt order dated 28 th October 2009 was granted in favour of CTTL over accounts held by NNPC's banks in the jurisdiction. On the application of NNPC this order was discharged on 16 th November 2009, although an appeal to the Court of Appeal against that discharge has been permitted and will be pursued by CTTL. Meanwhile it has been ordered that the interim charging orders of 28 th October 2009 are to remain in place and that a hearing to determine the charging orders is to be scheduled. By an application notice dated 23 rd November 2009 the defendants now, somewhat belatedly, apply to the court for an order seeking that the judgments be set aside or stayed.
The US proceedings.
In addition to seeking to enforce the award in this jurisdiction CTTL also took steps to seek to enforce it in the United States. Their original application was for entry of the judgment in terms of the award. There was no response to that application by the defendants and a default judgment motion was issued. The defendants were then stirred into action and were granted a temporary stay to respond to the application. The original application by CTTL was then superseded when they put forward an amended claim. They claimed that judgment should be entered on two bases: (1) due to an entitlement to enforce the award under the New York Convention, and (2) in recognition of the UK judgment. The defendants applied for an adjournment of that application — in effect for a stay. That application was dismissed and judgment was handed down on 23 rd March 2010 by the United States District Court for the District of Columbia. As regards CTTL's application, that has yet to be ruled on.
The Nigerian proceedings.
The award was made on 14 th August 2008. On 15 th November 2008 time expired for challenge of the award in the Nigerian courts. On 20 th April 2009 an originating summons was filed out of time by the defendants in the Nigerian courts seeking to challenge the award. The application was made for an injunction to prevent enforcement by CTTL and for an extension of time to apply to challenge the award. On 23 rd April 2009 an ex parte order was granted by the Nigerian courts for the requested injunction and for the requested extension of time. On 19th May 2009 CTTL applied for an extension of time to contest the ex parte order. On 1st June 2009 there was a hearing of that application. On 14 th June 2009 CTTL contends that, pursuant to the relevant Nigerian legislation, the ex parte order lapsed. On 16 th June 2009 the court gave a judgment rejecting CTTL's application for an extension of time to challenge the ex parte order. I am told that that order is itself the subject of an appeal, but there is no evidence before the court as to when either that appeal or when the defendants' originating summons will be heard.
The application to set aside the judgments.
The first ground relied upon by the defendants is section 103(2)(f) of the Arbitration Act 1996, which provides as follows:
"Recognition or enforcement of the award may be refused if the person against whom it is invoked proves…
(f) that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made."
Although we are here concerned with a judgment rather than an award, the defendants submitted that, since the award is one which should not be recognised or enforced, it follows that the judgment based on that award should be set aside. I reject the defendants' argument. It is clear that section 103(2)(f) is inapplicable in this case. It only applies where the award "has been set aside or suspended". The fact that there is an application to set aside an award does not mean that the award has been set aside. The position where there is an application to set aside is dealt with under section 103(5). If authority is needed to support that conclusion based on the clear wording of section 103, it is to be found in the judgment of Gross J in IPCO v NNPC [2005] 2 Lloyd's Law Rep 326. In the course of his judgment in that case he said as follows at paragraph 12:
"Secondly, s.103(2)(f) is only applicable when there has been an order or decision suspending the award by the court in the country of origin of the award ('the country of origin'). S.103(2)(f) is not triggered automatically by a challenge brought...
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