Judge: Bryan J.
Citation:  EWHC 3714 (Comm)
In a complex case concerning enforcement of an arbitral award against the Federal Republic of Nigeria, the Court had to consider an application for relief from sanctions. It held that any prejudice to the claimant if relief were granted could be mitigated in part by an order for costs on the indemnity basis.
In proceedings against the Federal Republic of Nigeria concerning a gas supply and processing agreement, a London arbitral tribunal made a liability award in favour of the Claimant and found it was entitled to damages. There was a dispute between the parties as to whether the Nigerian High Court had set aside the liability award in 2016. In 2017, the arbitral tribunal made an award against the FRN in the sum of US$6.6 billion plus interest. The award remained unpaid and the Claimant commenced proceedings in the High Court to enforce the arbitration award. The Defendant did not serve an Acknowledgement of Service and the Claimant applied for permission to enforce the award. The Defendant then filed an Acknowledgement of Service and applied for relief from sanctions. The Court considered the three stage test in Denton but held that there were other factors in favour of granting relief. Any prejudice that the Claimant might potentially suffer if relief were granted could be mitigated by a Costs Order that the costs of the application for relief should be paid by the Defendant on the indemnity basis. The Court also took into account the impact of the size of the award on the system and the taxpayers of Nigeria. The size of the award was extraordinary and consideration of enforcement would benefit from hearing arguments from both parties. The Court did not comment on the merits of the Defendant’s case. Relief from sanctions was granted, together with an extension of time for service of the Acknowledgement of Service.