Zhongshan Fucheng Investment Co Ltd v The Federal Republic of Nigeria

A court enforcing an arbitral award against a foreign state may make an ex parte enforcement order where the material establishes that state immunity does not apply. The order may stand unless the state makes a timely application to set it aside.

Section 1(2) of the State Immunity Act 1978 does not exempt a state from procedural time limits. A late challenge requires relief from sanctions under the Denton criteria. The court may refuse relief where the breach is serious, lacks good reason, and justice favours speedy finality in award enforcement.

An application under CPR 52.30 cannot establish real injustice where the proposed appeal has no real prospect of success.

Zhongshan obtained an arbitral award against Nigeria under a bilateral investment treaty. It sought enforcement under section 66 of the Arbitration Act 1996. Cockerill J made an ex parte enforcement order, giving Nigeria 74 days to apply to set it aside, including on state-immunity grounds.

Nigeria applied late for extensions of time but did not initially advance a state-immunity case. Cockerill J dismissed the applications, applying the Denton principles: [2022] EWHC 3286 (Comm). Males LJ refused permission to appeal. Nigeria then applied under CPR 52.30 to reopen that refusal, contending that section 1(2) of the State Immunity Act 1978 required a further determination of immunity on the balance of probabilities.

1. The application to reopen was dismissed. Nigeria's proposed appeal had no real prospect of success. It could therefore not show that reopening the final refusal of permission was necessary to avoid real injustice under CPR 52.30.

2. The summary procedure in CPR 62.18 applies to enforcement of an arbitral award against a state. A judge may make an ex parte order where satisfied on the evidence that the award should be enforced and that there is no arguable case of state immunity. The order may allow the state a specified period to apply to set it aside.

3. That procedure complied with section 1(2) of the State Immunity Act 1978. Applying J.H. Rayner Ltd v Department of Trade [1989] Ch 72 and Benkharbouche v Embassy of the Republic of Sudan [2017] UKSC 62, the Court held that a court has jurisdiction to determine whether immunity applies and to impose appropriate procedural rules for that determination. A further investigation on the balance of probabilities was neither required nor workable after a valid enforcement order and an unexercised opportunity to challenge it.

4. Nigeria had to comply with the time limit or seek an extension in time. Its late request required relief from sanctions under Denton. State immunity did not displace that ordinary procedural consequence. The judge was entitled to find the delay serious and significant, without good reason, and to conclude that justice favoured refusal, given the need for speedy finality and the arguable abuse in rerunning abandoned jurisdiction arguments.

5. The first-instance assessment was a case-management discretion. There was no error of law and the judge was not plainly wrong. Underhill LJ agreed with the Chancellor's reasoning.

• Court of Appeal (Civil Division): The Court dismissed Nigeria's CPR 52.30 application to reopen Males LJ's refusal of permission to appeal: [2023] EWCA Civ 867.
• Court of Appeal (Civil Division): Males LJ refused permission to appeal on 30 January 2023, holding that the proposed appeal had no real prospect of success.
• High Court, Commercial Court: Cockerill J dismissed Nigeria's applications for extensions of time to challenge an ex parte order enforcing the arbitral award: [2022] EWHC 3286 (Comm).