Continental Transfert Technique Ltd v Nigeria & Ors

Pending proceedings to challenge an arbitration award do not mean that the award has been set aside or suspended. Recognition or enforcement may therefore be refused under section 103(2)(f) of the Arbitration Act 1996 only where a competent authority has actually set aside or suspended the award.

There is no general state immunity from enforcement. Immunity depends on the particular property and whether it is in use, or intended for use, for commercial purposes. A stay of enforcement requires special circumstances making enforcement unjust. Relevant considerations include the strength of the challenge, whether it is bona fide and has a realistic prospect of success, the likely delay, and resulting prejudice. A stay may be granted subject to substantial security.

The claimant obtained a Nigerian arbitration award against the first to third defendants under a Nigerian law contract. The award remained unpaid. The claimant obtained permission to enforce the award in England and judgment was entered in its terms against the first to fourth defendants.

The claimant then pursued enforcement against property and securities connected with the fifth defendant. The defendants applied belatedly to set aside or stay the English judgments. They relied on the pending Nigerian challenge to the award, alleged non-disclosure of Nigerian and United States proceedings, state immunity, and the discretionary jurisdiction to stay enforcement.

The central issues were whether the pending Nigerian challenge engaged section 103(2)(f) of the Arbitration Act 1996, whether there had been material non-disclosure, and whether enforcement should be stayed pending the Nigerian proceedings.

1. Set aside application. The application under section 103(2)(f) of the Arbitration Act 1996 failed. That provision applies only where the award has been set aside or suspended by a competent authority. A pending application to set aside does not itself suspend or set aside the award. Section 103(5) addresses the different situation where such proceedings are pending. The court adopted the reasoning of Gross J in IPCO v NNPC [2005] 2 Lloyd's Law Rep 326.
2. The application to formalise the earlier conditional judgment was essentially administrative and without notice. Any duty of disclosure ordinarily concerned the status of the English proceedings. The Nigerian proceedings concerned enforcement, not the claimant’s entitlement to enter judgment while the award remained valid and subsisting. The alleged non-disclosure did not justify setting aside the judgment.
3. State immunity. Section 13(2)(b) of the State Immunity Act 1978 is subject to section 13(4). It does not create blanket immunity. The immunity question must be determined by reference to the particular property and whether it is used, or intended for use, for commercial purposes. A general stay was therefore unjustified.
4. Stay of enforcement. The relevant discretion was that under RSC Order 47 rule 1(1), requiring special circumstances making enforcement inexpedient, in the sense of unjust. The principles under section 103(5) remained relevant by analogy. The court considered whether the Nigerian challenge was bona fide and had a realistic prospect of success, the delay likely to result from a stay, and the prejudice to the claimant. The sliding-scale approach in Soleh Boneh International Ltd v The Government and the Republic of Uganda [1993] 2 Lloyd's Rep 208 was also relevant, including the apparent strength of the challenge and the practical difficulty of enforcement.
5. The defendants produced no evidence establishing a realistic prospect that the award would be invalidated. The timing of the Nigerian proceedings indicated an element of delay, and the date of any Nigerian hearing was uncertain. The size of the award meant that further delay would cause substantial prejudice. Those factors strongly favoured enforcement.
6. The stay was granted only on terms that substantial security of £100 million be provided in England within 28 days. The application to set aside the judgments was refused.

Not an appeal. The judgment records that Walker J granted interim permission to enforce the award on 10 December 2008, and Andrew Smith J made the final order entering judgment on 24 June 2009. The present court determined the defendants’ subsequent application to set aside or stay enforcement.