IPCO (Nigeria) Ltd. v Nigerian National Petroleum Corporation, Court of Appeal - Commercial Court, April 17, 2008, [2008] EWHC 797 (Comm)

Reporting Judge: [2008] EWHC 797 (Comm)

President: IPCO (Nigeria) Ltd. v Nigerian National Petroleum Corporation

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Extract

IPCO (Nigeria) Ltd. v Nigerian National Petroleum Corporation, Court of Appeal - Commercial Court, April 17, 2008, [2008] EWHC 797 (Comm)

Neutral Citation Number: [2008] EWHC 797 (Comm)

Case No: 2004 Folio 1031

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 17 April 2008

Before:

THE HON. MR JUSTICE TOMLINSON

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Between:

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Michael Lyndon-Stanford QC and Ciaran Keller

(instructed by Messrs Lovells) for the Claimant

Jonathan Nash QC and James Willan

(instructed by Messrs Stephenson Harwood) for the Defendant

Hearing dates: 21-22, 25 February 2008

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Judgment

Mr Justice Tomlinson :

Introduction

1. On this application the court has to consider its power of enforcement of a New York Convention award in circumstances where a challenge to the validity of the award is pending before the supervisory court. An unusual feature of the application is that the court has already once before had to consider whether to adjourn a decision on enforcement of the award, and has adjourned enforcement on terms. There has been compliance by the Defendant with those terms. Now the Claimant returns to court and asks it to make a different order. It does so in part because the resolution of the challenge to the validity of the award of which the supervisory, Nigerian, court is seised is taking very much longer than was first expected and in part because this court was, it is alleged, on the earlier occasion inadvertently misled in a manner material to its evaluation of the strength of the challenge. In these circumstances the question arises whether the court should, as the Defendant would put it, revisit its earlier decision. In view of the further time which may elapse before resolution of the proceedings in Nigeria, there arises also in rather stark relief the question whether the court can and should permit enforcement of such part of the award, if any, as is, in the opinion of the court, incapable of serious challenge.

2. The Claimant company, to which I shall refer as ``IPCO'', is a Nigerian company. It is a subsidiary of a Hong Kong registered company. It is a contractor specialising in the construction of on-shore and off-shore oil and gas facilities. It was incorporated in Nigeria in 1990 in order, as I infer, to exploit the opportunities for business in that country.

3. The Defendant, to which I shall refer as ``NNPC'', is a Nigerian Federal Government corporation. It is and describes itself as the State Oil Corporation of Nigeria. It is one of the principal contributors to the economy of Nigeria, with a turnover in 2005 equivalent to over £5,000,000,000.00. In terms of volume and revenue it is the most important oil and gas producer in Africa.

4. By a contract dated 14 March 1994 IPCO agreed for a lump sum price to undertake the design and construction for NNPC of a petroleum export terminal in the Port Harcourt area of Nigeria to be known as the Bonny Export Terminal. Completion of the project took some 22 months longer than was envisaged in the contract. IPCO contended that that was in part a result of NNPC requiring variations to the agreed specification.

5. The contract was governed by Nigerian law and in the event of disputes which could not otherwise be resolved provided for arbitration in Lagos in accordance with the Nigerian Arbitration and Conciliation Act 1990.

6. Completion of the contract was followed by a lengthy arbitration between the parties. The arbitration tribunal comprised a former Attorney General and Minister of Justice of Nigeria, a former Director of the International and Comparative Law Division of the Federal Ministry of Justice of Nigeria, also the Nigerian representative of UNCITRAL and Honorary Vice President of the International Council for Commercial Arbitration and, thirdly, a retired Chief Judge, the co-author of the leading Nigerian textbook on arbitration.

7. On 28 October 2004 the tribunal issued its award, an expression which I use without prejudice to IPCO's argument that what was issued was a series of divisible awards. After setting off an amount of US$1,348,015.00 found due from IPCO to NNPC on NNPC's counterclaim, the award in favour of IPCO against NNPC was US$152,195,971.55, and Naira 5 million. The latter sum related to costs of the arbitration awarded to IPCO. The Dollar sum included a further US$815,000 on account of the costs of the arbitration. The arbitrators also directed that the sums awarded should bear interest at 14% per annum until payment.

8. Being an award rendered in Nigeria by Nigerian arbitrators in a dispute governed by Nigerian law between two Nigerian entities, this is in every sense a Nigerian domestic award. However, since Nigeria is a state specified by Order in Council under section 100(3) of the Arbitration Act 1996, the award is also a New York Convention award. Accordingly it may be recognised and enforce...

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