Federal Government of Nigeria & Anor v Louis Emovbira Williams

A judgment obtained by fraud may be challenged even where the fraud could have been discovered earlier through reasonable diligence. The claim is abusive only where fraud was alleged in the earlier proceedings and new evidence is relied on, or where there was a deliberate decision not to allege known fraud or investigate suspected fraud. The principles apply equally to default judgments. The alleged dishonesty must be conscious and deliberate, material, and an operative cause of the judgment. A claim is not abusive merely because the claimant relied on legal advisers who failed to identify a fraud-based defence.

The Federal Government of Nigeria and the Attorney General sought to set aside a default judgment obtained by Dr Williams in the 2016 Proceedings. The judgment awarded approximately US$15 million on a claim based on alleged losses arising from a 1986 undercover operation.

The Claimants alleged that the judgment had been procured by knowingly false representations and fabricated documents. Dr Williams applied to strike out the claim as an abuse of process, arguing that the fraud allegations could and should have been raised earlier and that the proceedings amounted to a collateral attack on earlier litigation.

The central issue was whether the fraud claim was barred by the principles of finality and abuse of process, particularly in circumstances where the Claimants had not previously alleged fraud.

1. Application dismissed. The claim to set aside the default judgment on the ground of fraud was not abusive and was allowed to continue.
2. The principle that a litigant must bring forward the whole case does not require a party seeking to set aside a judgment for fraud to show that the fraud could not reasonably have been discovered before judgment. Applying Takhar v Gracefield Developments Ltd [2019] UKSC 13, the relevant exceptions arise where fraud was alleged in the earlier proceedings and new evidence is relied on, or where there was a deliberate decision not to allege known fraud or investigate suspected fraud.
3. The evidence showed that the Claimants had not alleged fraud in the 2016 Proceedings or earlier proceedings. They had not deliberately decided not to do so, and had instead relied on external legal advice which did not identify a fraud-based defence. Lack of reasonable diligence therefore did not make the present claim abusive.
4. The principles governing fraud claims required conscious and deliberate dishonesty, materiality, and causation. The dishonesty had to be an operative cause of the impugned judgment and had to be assessed by reference to its effect on the evidence supporting the original decision. Those principles, derived from Royal Bank of Scotland plc v Highland Financial Partners LP [2013] 1 CLC 596, were applicable.
5. A default judgment could also be challenged for fraud. A request for default judgment implicitly represents that the claimant is entitled to judgment on the pleaded case. The court must still be satisfied that there is a viable cause of action and a case to answer. The reasoning in Park v CNH Industrial Capital Europe Ltd [2021] EWCA Civ 1766 was applicable.
6. Even under the multifactorial approach advanced in the minority judgments in Takhar, the claim would not be abusive. The alleged fraud was serious and central, the Claimants’ reliance on legal advice was relevant, the proposed litigation would not duplicate a full trial, and the allegations appeared strong.

The strike-out application was dismissed.