The Court of Appeal in Nigerian National Petroleum Corporation v IPCO (Nigeria) Ltd has reinforced the need for quick and effective enforcement of awards within the international arbitration system.
A Nigerian domestic arbitration tribunal, in 2004, awarded $152 million in favour of IPCO Nigeria Ltd (IPCO) in proceedings against the Nigerian National Petroleum Corporation (NNPC). The NNPC subsequently applied to the Federal Court of Nigeria to set aside the award on the grounds of procedural irregularity and errors of law. The High Court in England was simultaneously asked by IPCO to enforce the award, and this application was adjourned by the Court.
In this long-running case, no decision had been made by the Nigerian court after three years and no conclusion seemed imminent. The application to enforce the award was renewed in the English Courts on the basis that the challenge in Nigeria was taking longer than expected. Tomlinson J revisited the decision on enforcement and gave judgment on two heads of claim in the award.
The decision of Tomlinson J was challenged by the NNPC in the Court of Appeal. The court looked to the terms of the New York Convention 1958 and the Arbitration Act 1996 to see if Tomlinson J had been justified in enforcing part of the award.
They found that nothing in the Convention or the Arbitration Act expressly prevented part enforcement of an award. In the circumstances, it would be unfair to keep the claimant from the large sums of money to which it was entitled under parts of the award, since the purpose of the New York Convention is to “ensure the effective and speedy enforcement of international arbitration awards”. The court was willing to allow part enforcement of the award, provided that the part to be enforced could be ascertained from the face of the award, so that judgment could then be given in the same terms as those in the award.
This long-awaited decision will be appreciated by parties using arbitration to resolve their disputes. It reduces the ability of parties to lodge appeals as part of a stalling tactic, and should increase the efficiency and speed of the award enforcement process.