A Comparison Of The Use Of The Public Policy Defence By Different Countries To Resist The Enforcement Of International Arbitral Awards – A Rising Star Or Setting Sun?

A Comparison Of The Use Of The Public Policy Defence By Different Countries To Resist The Enforcement Of International Arbitral Awards – A Rising Star Or Setting Sun?

We conclude this review of the scope of interpretation of the public policy on the African continent, noting that Zimbabwe has modified the text of the UNCITRAL Model Law with regard to the public policy exception to its enforcement, but its modification has been interpreted as emphasizing the limited nature of the public policy exception. Zimbabwe’s Arbitration Act 2002 supplements the wording of the Model Law to provide in art 34(5) that “For the avoidance of doubt … it is declared that an award is in conflict with the public policy of Zimbabwe if (a) the making of the award was induced or effected by fraud or corruption; or (b) a breach of the rules of natural justice occurred in connection with the making of the award.” In Zesa v Maposa , this additional wording led the Zimbabwe Supreme Court to construe the public policy defence restrictively in accordance with the pro-enforcement character of the New York Convention. Specifically, the Zimbabwe Supreme Court reasoned that

“an award may be refused on the basis of public policy only where it was based on so fundamental an error, and constituted an inequity so far-reaching and outrageous in its defiance of logic or acceptable moral standards, that a sensible and fair-minded person would consider that the conception of justice in Zimbabwe would be intolerably hurt by the award”.

In a Nigerian case the public policy defence in enforcement /setting aside proceedings has also been raised before the English courts. In Ipco (Nig.) Ltd v. NNPC (2015) EWCA 1144 and 1145. On 28 October 2004, the arbitral tribunal constituted to determine the parties’ dispute rendered an award in favour of IPCO for an amount of over USD 340 million. While NNPC instituted set aside proceedings in Nigeria, initially on the grounds that there was an error of law on the face of the award and an inadequacy of reasoning, IPCO sought to have the award enforced in England, which was granted ex parte pursuant to section 101(2) and (3) of the 1996 Arbitration Act 1996. The order was for the payment by NNPC to IPCO of the sterling equivalent of the total sums due under the award. NNPC applied to set that order aside which was granted on conditions which NNPC complied with.

Funke Adekoya

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