Process & Industrial Developments Ltd v The Federal Republic of Nigeria

A tribunal’s unchallenged determination of the juridical seat of an arbitration may bind the parties when the arbitration agreement authorised the tribunal to determine that issue. A contractual reference to the “venue” of the arbitration may designate the juridical seat where the clause anchors the entire arbitration to a particular place. Procedural objections to an arbitral determination must be pursued through the available curial remedies within time. Enforcement will rarely be refused on public-policy grounds merely because an award of compensatory damages is alleged to be excessive. The policy favouring enforcement of arbitral awards is strong. A party cannot raise a separate jurisdictional objection to pre-award interest where the seat was England, the objection could have been brought under the Arbitration Act 1996, and no such challenge was made.

Process & Industrial Developments Ltd applied under section 66 of the Arbitration Act 1996 for leave to enforce a substantial arbitral award against the Federal Republic of Nigeria as a judgment.

The arbitration arose from a gas supply and processing agreement governed by Nigerian law. The agreement provided that the venue of the arbitration was London, England, or otherwise as agreed. The tribunal later determined in Procedural Order No. 12 that London was the juridical seat. Nigeria contended that the seat was Nigeria, that Nigerian court orders had set aside or remitted the liability award, and that enforcement should be refused because the damages were punitive or because pre-award interest was beyond the submission.

The central issues were whether the tribunal’s determination of seat was binding, whether the English court could revisit it, and whether the asserted public-policy and jurisdictional objections defeated enforcement.

1. Seat of arbitration. The parties’ agreement to arbitrate under the Nigerian Arbitration and Conciliation Act authorised the tribunal to determine disputes about the location of the seat. The tribunal was therefore entitled to determine the issue in Procedural Order No. 12.
2. Binding effect. The tribunal’s determination, coupled with the absence of any successful challenge to Procedural Order No. 12 or the Final Award, meant that the seat was London, England and could not be revisited on the section 66 application. The same conclusion followed from issue estoppel. An arbitral tribunal can create an issue estoppel, and the relevant requirements were satisfied. Nigeria’s failure to pursue available remedies meant that recognising the estoppel would not be unfair.
3. Construction. If the issue were open, clause 20 of the GSPA would nevertheless be construed as selecting England as the seat. The reference to the venue “of the arbitration”, rather than to the place of hearings, anchored the entire arbitration to London. The provision was compatible with the tribunal retaining power to hold particular hearings elsewhere.
4. Nigerian proceedings. The Nigerian injunction did not restrain the tribunal from issuing Procedural Order No. 12. The Nigerian order purporting to set aside or remit the liability award was ineffective because the Nigerian court was not the supervisory court.
5. Public policy. Enforcement of an award intended to be compensatory would not be contrary to public policy merely because the damages might be excessive through an error of fact or law. Public-policy objections are narrowly confined, and the strong policy favouring enforcement of arbitral awards outweighed any asserted policy against excessive compensation.
6. Pre-award interest. Any excess-of-jurisdiction objection to pre-award interest could have been brought under section 67 of the Arbitration Act 1996. No such challenge had been made. In any event, interest had been claimed in the arbitration and the issue was not shown to be jurisdictional.
7. The court was prepared to make an order enforcing the Final Award in the same manner as a judgment or order of the court.

First-instance decision. No earlier appellate decision is stated in the judgment.