Asset Management Corporation Of Nigeria v Qatar National Bank

A challenge under section 68 of the Arbitration Act 1996 requires both a serious irregularity and substantial injustice. Section 68 addresses exceptional failures of due process, not alleged errors in the tribunal’s construction of a contract, findings of fact, or application of foreign law. A subsidiary submission or line of reasoning is not an “issue” which the tribunal must separately determine where the central issue has been decided. The court may summarily dismiss a section 68 application on paper where the challenge has no real prospect of success, although an oral hearing will ordinarily be appropriate where one is sought and the underlying application is not plainly abusive.

Asset Management Corporation of Nigeria challenged an arbitral award concerning whether preference dividends formed part of the rights sold to Qatar National Bank under a sale and purchase agreement. The challenge relied on section 68 of the Arbitration Act 1996 and alleged that the tribunal had failed to deal with issues concerning Nigerian law, sections 143 and 144(a) of the Companies and Allied Matters Act, and the nature of preference dividends.

Carr J dismissed the challenge on paper and dismissed a subsequent application to set aside that order. Cockerill J extended time for the present applications. The central questions were whether the challenge had any realistic prospect of success and whether the tribunal had failed to determine an issue within section 68.

1. Disposition. The applications to set aside Carr J’s orders were dismissed. The section 68 application remained dismissed. AMCON was ordered to bear the costs, and permission to appeal was refused.
2. Section 68 requires proof of a serious irregularity and substantial injustice. It is concerned with due process in exceptional cases. It does not provide a route for challenging errors of law, errors of fact, or the tribunal’s construction of a contract governed by Nigerian law.
3. The tribunal had identified and determined the central contractual issues. Its conclusion that the meaning of Article 8.11 was plain, clear and obvious dealt implicitly with AMCON’s subsidiary argument concerning the more reasonable construction. That argument was no more than a line of reasoning and did not constitute an issue for section 68 purposes.
4. The tribunal had expressly considered section 143 of the Companies and Allied Matters Act and found it irrelevant because it concerned voting rights. It had also addressed section 144(a), construing Article 8.11 as requiring a declaration before preference dividends became due and payable. No issue of unlawfulness arose on that construction.
5. The tribunal had dealt with the nature of cumulative preference dividends. It was entitled to rely on English authorities as highly persuasive on a question for which there was no direct Nigerian authority. The dividends were calculated cumulatively when declared, but were payable in respect of the financial year in which they were declared.
6. Carr J was entitled to dismiss the application without a hearing under the Commercial Court Guide where it had no real prospect of success. The court observed that an oral hearing would ordinarily be granted when sought, unless the underlying application was akin to vexatious, but that procedural observation did not affect the correctness of the result.

Carr J dismissed the section 68 challenge on paper and later dismissed AMCON’s application to set aside that order. Cockerill J subsequently extended time for AMCON’s applications. The present court dismissed the applications to set aside Carr J’s orders and confirmed that the section 68 application remained dismissed.