The Federal Republic of Nigeria v Process & Industrial Development Ltd
| Jurisdiction | England & Wales |
| Judge | Robin Knowles J CBE |
| Judgment Date | 21 December 2023 |
| Neutral Citation | [2023] EWHC 3320 (Comm) |
| Year | 2023 |
| Court | King's Bench Division (Commercial Court) |
| Docket Number | Claim Nos: CL-2019-000752 and CL-2018-000182 |
[2023] EWHC 3320 (Comm)
THE HON Mr Justice Robin Knowles CBE
Claim Nos: CL-2019-000752 and CL-2018-000182
IN THE HIGH COURT OF JUSTICE
THE BUSINESS AND PROPERTY COURTS OF ENGLAND & WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Rolls Building, Royal Courts of Justice
London
Mark Howard KC, Philip Riches KC, Tom Ford, Tom Pascoe, Sebastian Mellab instructed by Mishcon de Reya LLP) for the Claimant
Lord Wolfson KC, Alexander Milner KC, Henry Hoskins and Max Evans (instructed by Quinn Emanuel LLP) for the Defendant
Hearing dates: 8 December 2023
Ruling on Leave to Appeal
(as handed down physically in open court, and electronically by email to the parties, and by publication in the National Archives)
Introduction
On 23 October 2023 I gave judgment (the “Judgment”: [2023] ECK 2638 (Comm)), after a major trial, on a challenge by Nigeria under section 68 of the Arbitration Act 1996, to arbitration awards made in favour of P&ID.
This Ruling uses the same abbreviations as the Judgment. Reference should be made to the Judgment for the facts and circumstances as found at the trial, and the law applied. The full text of relevant provisions of the Arbitration Act are set out in the Annex to the Judgment.
I decided that the Award on Liability and the Final Award were obtained by fraud and the Awards were and the way in which they were procured was contrary to public policy: Judgment [574].
As explained at Judgment [577] the question of the Order that the Court should make was left over to a later date so that the parties had the opportunity to present argument once they had considered the Judgment. I heard that further argument on 8 December 2023. I decided that the Award on Liability and the Final Award should be set aside (as Nigeria sought) rather than remitted to the Tribunal for reconsideration (as P&ID sought). My reasons are shortly expressed later in this Ruling.
At the hearing on 8 December 2023 P&ID also sought leave to appeal under section 68(4) of the Arbitration Act against the decision reflected in my Judgment and in the Order that will now be made after the trial. Nigeria's position was that leave to appeal should be refused. I had the benefit of written and oral argument on this question and have taken the time to reflect carefully. I have reached the conclusion that I must refuse leave to appeal, and in this Ruling I give my essential reasons for that conclusion.
On 8 December 2023 I also made a number of other decisions consequential on the Judgment, with reasons given orally at the time. I have since dealt with a final small number of further consequential matters with the benefit of written argument alone. All are reflected in the Order that will now be made.
Reasons for refusing leave to appeal
P&ID contends that, if given leave to appeal, there is (at least) a real prospect that P&ID will succeed in establishing that the Court was wrong to uphold Nigeria's challenge. P&ID also contends that there are other compelling reasons why leave to appeal should be given. There are 4 proposed Grounds of Appeal.
It is a major thing for a challenge under section 68(2)(g) of the Arbitration Act to succeed and for arbitration awards to be set aside. I am acutely conscious of the responsibility placed on this Court to decide whether to grant or refuse the leave required for any appeal. I approach the question of leave to appeal with respect for the huge significance of this matter to both parties.
At Judgment [493] and [497] I held that three things, central to Nigeria's challenge, brought the case within section 68(2)(g):
“494. The first is P&ID's providing to the Tribunal and relying on evidence before the Tribunal that was material but was evidence that P&ID knew to be false. Specifically, this was the evidence of Mr Michael Quinn in his witness statement of 14 February 2014 that he was “explain[ing] how the GSPA came about” when he did not do that because he did not mention that Mrs Grace Taiga had been paid a US$5,000 bribe at the end of December 2009 and a £5,000 bribe on 29 March 2010 ….
495. The second is P&ID's continued bribery or corrupt payment of Mrs Grace Taiga directed to the arbitration period in order to suppress from the Tribunal and Nigeria the fact that she had been bribed when the GSPA came about. This continued bribery or corrupt payment is fairly described by Nigeria as bribery “to keep her ‘on-side’, and to buy her silence about the earlier bribery”. …
496. The third is P&ID's improper retention of Nigeria's Internal Legal Documents that it had received during the Arbitration. It retained these (rather than returned them unread) so as to monitor Nigeria's position and awareness as the Arbitration continued. This included monitoring whether Nigeria had become aware of the deception being practised by P&ID on the Tribunal and on Nigeria as a party before the Tribunal. …”
In its proposed Grounds of Appeal, P&ID uses the shorthand of “Perjury Irregularity”, “Bribery Irregularity” and “Documents Irregularity” for the three things, and I shall do the same here.
Proposed Ground 1
Proposed Ground 1 would contend that the Court “erred in law in that it failed correctly to identify and/or apply the test of causation under s.68(2)(g)”. P&ID makes clear that the Proposed Ground does not challenge the Perjury Irregularity.
P&ID states in its written argument that “P&ID will argue that the Court did not correctly interpret or apply the causation requirement in s68(2), which required Nigeria to establish that any fraud was causative of the Awards” (P&ID's emphasis).
P&ID says that the Judgment correctly recorded its submission that the correct legal test required Nigeria to prove, in relation to any relevant irregularity, that but for the irregularity the Tribunal “might well” have reached a different conclusion. It uses the shorthand of “Different Result Test” for this, and I shall do the same here. The word “irregularity” comes from section 68.
In its argument P&ID draws on both on the reference in section 68(2) (“has caused or will cause substantial injustice”) and section 68(2)(g) (“being obtained by fraud”). Section 68(2)(g) also refers to “the way in which” an award was procured “being contrary to public policy”. The Judgment explored the difficulty of application of the “Different Result Test” in some situations. But the important thing is that in the present case P&ID plainly failed the “Different Result Test”.
At Judgment [509] I summarised:
509. In the present case the core is the bribery of Mrs Grace Taiga when the GSPA was being made. It is the fact of that bribery that Mr Michael Quinn falsely concealed by the words of his witness statement [the Perjury Irregularity], and that the continued bribery or corrupt payments sought to suppress [the Bribery Irregularity]. It is that that P&ID was monitoring (among other things) by its retention of Nigeria's Internal Legal Documents [the Documents Irregularity].”
Judgment [510] was introduced by referencing P&ID's argument on causation by the Perjury Irregularity. But the paragraph goes on to make the broader findings that:
“… The Awards were the result of the Arbitration that happened. There is not question to my mind that the Arbitration would have been completely different, and in ways strongly favourable to Nigeria, had the fact of bribery of Mrs Grace Taiga when the GSPA was being made been before the Tribunal. It would have brought in the issue whether the GSPA was procured by fraud, and as a result voidable. Discovery of the concealment would have completely altered the Tribunal's approach to the rest of Mr Michael Quinn's evidence.”
Judgment [493] also expressed the finding that each irregularity “amounted to fraud by which the Awards were obtained”.
P&ID contends that any analysis of causation in relation to “the payments to Ms Taiga in 2015–2016” (that is, the payments the subject of the Bribery Irregularity) would “inevitably have concluded that the Different Result Test was not satisfied”.
P&ID justifies this contention as follows:
“Nigeria never made any attempt to contact Ms Taiga during the arbitration; and it would be beyond fanciful to suggest that she might have spontaneously confessed to receiving bribes of her own motion, in circumstances where (i) she would likely face serious criminal sanctions, and (ii) it was common ground that she expected to receive a benefit from the proceeds of any award.”
But P&ID does not challenge the findings at Judgment [404] and [495] (and see [509]) that the purpose of the payments was “to keep [Mrs Grace Taiga] ‘on-side’ and to buy her silence about the earlier bribery”. In choosing to make the payments to her for that purpose, P&ID plainly did not have the confidence, now contended, that Ms Taiga would not otherwise confess. The payments were made, and she was silent as intended.
In its written argument P&ID also suggests that whether the Bribery Irregularity caused “a substantial injustice” is not addressed in the Judgment. P&ID refers to the sentence in Judgment [505] that reads “Section 68(2)(g) says simply that it is ‘substantial injustice to the applicant’ that must be shown”.
However in the following sentence, I continued: “And this is substantial injustice that the serious irregularity “has caused or will cause”.” At Judgment [508] I said:
“508. … Perhaps there is much to be said for this aspect of these challenges to be left with the words of the section “serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant”, keeping in mind the text of the DAC report to which the Privy Council...
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