West Law Report

Enforcing part of arbitration

Posted in Times Law Report by mrkooenglish on November 21, 2008

From The Times
November 11, 2008
Enforcing part of arbitration

Court of Appeal

Published November 11, 2008

IPCO (Nigeria) Ltd v Nigerian National Petroleum Corporation

Before Lord Justice Tuckey, Lord Justice Wall and Lord Justice Rimer

Judgment October 21, 2008

Only part of a foreign arbitration award governed by an international Convention could be enforced in England under the Arbitration Act 1996.

The Court of Appeal so held in a reserved judgment in dismissing an appeal brought by the defendant, Nigerian National Petroleum Corporation, against the decision of Mr Justice Tomlinson ([2008] Bus LR D105) when he gave judgment for the claimant, IPCO (Nigeria) Ltd, for over US$85 million.

The claimant was a Nigerian subsidiary of a Hong Kong registered company. In March 1994 it entered into a contract with the defendant, the state oil company of Nigeria, to design and construct a petroleum export terminal.

The progress of the project was delayed by 22 months because, as the claimant contended, the defendant required substantial variations to the contract works. The claimant’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.

On October 28, 2004, the arbitrators issued their award in favour of the claimant in the net amount of US$152,195,971.55. In November 2004, the defendant applied to the Federal Court in Nigeria to set aside the award and the claimant successfully applied to the English High Court to enforce it.

Mr Justice Gross adjourned enforcement provided the defendant paid the claimant US$13 million. The claimant renewed its application to enforce the award before Mr Justice Tomlinson who enforced part of the award for over US$85 million. The defendant appealed.

Mr Jonathan Nash, QC and Mr James Willan for NNPC; Mr Michael Lyndon-Stanford, QC and Mr Ciaran Keller for IPCO.

LORD JUSTICE TUCKEY said that the question whether part of an international arbitration award could be enforced was one of some importance upon which there was no English authority.

The purpose of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York (1976) (Cmnd 6419), adopted by the 1976 Act, 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. His Lordship could see 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. The word “award” in sections 101 and 103 of the 1996 Act should be construed to mean the award or part of it. The judge was therefore entitled to order part-enforcement of the award.

Lord Justice Wall and Lord Justice Rimer agreed.

Solicitors: Stephenson Harwood; Lovells LLP.

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