Home Information Cases Nigerian National Petroleum Corporation v IPCO (Nigeria) Ltd (2008)

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Nigerian National Petroleum Corporation v IPCO (Nigeria) Ltd (2008)

Summary

The terms of the New York Convention 1958 and the Arbitration Act 1996 did not prevent part enforcement of an award in an appropriate case provided the part to be enforced could be ascertained from the face of the award and judgment could be given in the same terms as those in the award.

Facts

The appellant (D), the state oil company of Nigeria, appealed against a decision ((2008) EWHC 797 (Comm), (2008) 2 Lloyd's Rep 59) permitting partial enforcement of a New York Convention arbitration award. The respondent company (C) had entered into a contract with D to design and construct a petroleum export terminal near Port Harcourt. The project had been delayed by 22 months because, as C contended, D had required substantial variations to the contract works. C's disputed claims to be paid substantially more than the contract price were referred to arbitration in Lagos in accordance with Nigerian law as the contract provided. The arbitrators had issued an award in favour of C in a net amount of US$152,195,971.55. D applied to the Federal High Court in Nigeria to set aside the award. C applied to the High Court in England to enforce the award. The enforcement application was adjourned on terms by Gross J. Some three years later C renewed its enforcement application on the basis that D's challenge to the validity of the award in Nigeria was taking very much longer than expected. Tomlinson J decided that the circumstances justified revisiting the decision on enforcement and gave judgment for the amounts awarded by the arbitrators on two heads of claim. D submitted that Tomlinson J had no jurisdiction to enforce part of the award as he had done and that he should not have revisited Gross J's evaluation of the merits of D's challenge to the award.

Held

(1) The terms of the New York Convention 1958 and the Arbitration Act 1996 did not prevent part enforcement of the award in the instant case. The purpose of the Convention was to ensure the effective and speedy enforcement of international arbitration awards. An all or nothing approach to the enforcement of an award was inconsistent with that purpose and unnecessarily technical. There was no objection in principle to enforcement of part of an award provided the part to be enforced could be ascertained from the face of the award and judgment could be given in the same terms as those in the award. The purpose behind the Convention was reflected in the language of the 1996 Act. Enforcement "shall not be refused" except in the limited circumstances listed in s.103(2) of the Act where the court was not required to refuse but might do so. Under s.103(5) the court could adjourn enforcement but only if it considered it proper to do so. The enforcing court's role was not therefore entirely passive or mechanistic. The mere fact that a challenge had been made to the validity of an award in the home court did not prevent the enforcing court from enforcing the award if it considered the award to be manifestly valid, Soleh Boneh International v Uganda and National Housing Corp (1993) 2 Lloyd's Rep 208 CA (Civ Div) considered. There was nothing which expressly prevented part enforcement in the language of the Convention or the statute. The statute referred to "an" or "the" award, but that did not mean the whole award and nothing but the whole award. Such a construction would be commercially unreal. The word "award" in Part III of the 1996 Act should be construed to mean the award or part of it. To be enforceable it had to be possible to enter judgment "in terms of the award", as it had been in the instant case. The judge had been entitled to order part enforcement of the award in the way that he did. (2) Gross J had concluded that D's challenge to certain heads of claim had a realistic prospect of success on grounds of duplication and inadequacy of reasons. Tomlinson J had been persuaded to reconsider Gross J's decision on duplication. However that exercise did not affect the two heads of claim for which Tomlinson J gave judgment and there was nothing in his judgment which suggested that his decision to allow those parts of the award to be enforced was affected by his re-evaluation of the merits of the duplication challenge. Faced with the fact that no decision had been made by the Nigerian court after three years and none was imminent Tomlinson J was fully justified in enforcing the two unchallengeable parts of the award. He would have made that order irrespective of his reconsideration of the merits of the other claims and it was unnecessary to decide whether it had been open to him to revisit Gross J's conclusion on the merits.

Appeal dismissed

Court of Appeal
Tuckey LJ, Wall LJ, Rimer LJ
Judgment date
21 October 2008
References

​LTL 21/10/2008