ReSolution Issue 26, December 2020 | Page 20

Resolution November 2019

remedies for procedural unfairness in respect of the procedural order were available to Nigeria but it did not utilise them. In fact, Nigeria had not pursued, and allowed to be struck out, the Nigerian proceedings seeking to set aside the procedural order. Furthermore, Nigeria had invoked the English court’s jurisdiction itself, by seeking an order to set aside the award on liability.
Mr Justice Butcher noted that the tribunal’s procedural order as to seat was issued before the order of the Nigerian court setting aside the award on liability. As such, the Nigerian order was ineffective, on the basis that it was made by a court that was not the supervisory court. Neither the procedural order, nor the final damages award, had been set aside by any court. The procedural order determined the arbitral seat as being London and therefore Nigeria could not ask the court to revisit this question.
Issue estoppel
Mr Justice Butcher also held, as alternatively argued by PID, that the tribunal’s procedural order as to the arbitral seat created an issue estoppel which then precluded any further argument before the court on this issue. There was no issue between the parties that two of the four conditions required for an issue estoppel had been met, namely identity of parties and subject matter. Whilst a further condition is that a decision should be final and conclusive and the key determination on the seat formed part of a procedural order only, the judge found that this could in fact be regarded as final and conclusive at the point at which the order could no longer be reviewed by the tribunal, which was at the latest when the arbitration concluded. The final condition, that a judgment must be given by a foreign court of competent jurisdiction, was met as the judge found that the tribunal did have jurisdiction to make the procedural order.
Construction of arbitration agreement
It was not in issue that construction of the agreement was governed by Nigerian law and it was agreed by the parties that Nigerian principles of construction should be taken to be the same as those of English law. On that basis, the judge agreed with the tribunal that the agreement provided for the seat of arbitration to be in England. The reference to a venue represented an anchoring of the entire arbitration to London rather than simply providing that the hearings should take place there. A reference to venue solely as geographical location would be an inconvenient provision which the parties were unlikely to have intended. The judge also held that there had been an agreement by conduct, based upon the wording contained within the interim award and the award on liability as to seat and venue of the arbitration. Nigeria did not object to these statements and continued to participate in the arbitration.
Enforcement of final award
The judge dismissed Nigeria’s argument that the court should refuse enforcement of the arbitral award, as contrary to public policy. Mr Justice Butcher did not consider that there was any element of penalty or punitive damages in the sums awarded; in any event, whilst it was open to Nigeria to challenge the final award, it had not done so. The grounds on which enforcement of an award can be refused by reason of public policy are narrow and it is necessary to have regard to the strong public policy in favour of enforcing arbitral awards. There was no public policy requiring the refusal of an enforcement of an arbitral award of compensatory damages, even if those damages were higher than those which might be awarded by the English court.
Comment
The judgment emphasises the importance of the seat of arbitration, as determinative of which courts have supervisory jurisdiction over the arbitration proceedings. The choice of seat will have significant implications for an arbitration and is therefore an issue which merits careful consideration at the outset when drafting the arbitration agreement. Parties should be reminded that a reference to a ‘venue’ or ‘place of arbitration’ may be taken to mean the arbitral seat, so should pay attention to this in their drafting, particularly in ad hoc arbitration agreements.
The judgment also confirms the English court’s general support for arbitration, in terms of recognising the terms upon which parties agree to arbitrate as well as confirming the policy arguments in favour of upholding arbitral awards themselves where possible. In these types of high value disputes, the judge’s pro-arbitration comments should be welcomed by parties involved in arbitrations with some nexus to England.

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