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?

After evidence emerged in Nigeria which suggested to the Respondent that the award had been obtained by fraud, it filed an application to (i) vary an earlier order so as to provide that enforcement be set aside on grounds of public policy or (ii) to adjourn enforcement. The application was unsuccessful before both the High Court but succeeded [with additional conditions attached] before the English Court of Appeal. The Court of Appeal held inter alia, that IPCO’s application to enforce should be adjourned pending the determination by the Commercial Court pursuant to section 103(3) of the Act as to whether or not the award should be enforced because it was contrary to English public policy. However this order was conditional upon the provision of USD 100 million security by NNPC. The court also held that if the security was provided, then IPCO would only be able to enforce the award if the court found that its enforcement would not be contrary to public policy. NNPC appealed to the English Supreme Court which unanimously set aside the Court of appeal’s order, allowing NNPC to advance its defence of public policy in the English courts free of those conditions. Trial is supposed to commence in 2018.

The public policy defence has also been raised [but not determined] before the Nigerian courts in Ogbuneke Sons & Co. LTD v. Ed & F man Nigeria Ltd & Ors (2010) LPELR – 4688CA or (2010) 7 iLAW/CA/PH/408/2005. A dispute arose between the parties arising from the alleged underpayments as opposed to alleged short-delivery of agricultural products by the Appellant to the Respondent. The Respondents procured 4 arbitration awards against the Appellant who then applied to the Federal High Court, Umuahia to set aside enforcement of the arbitration awards obtained in London. The grounds of the Appellant’s application were, amongst other things, for the arbitration awards to be set aside because they were contrary to public policy in Nigeria, having being procured by misrepresentation of facts and fraud. The application was however struck out by the High Court on the grounds that it was anticipatory since there was no evidence that the awards had been registered in Nigeria, and thus not yet capable of being enforced. The Appellant successfully appealed against this decision to the Court of Appeal, which did not however decide the appeal on the basis of the public policy defence.

A guess at Nigeria’s stance on the public policy defence can be gleaned from the statement of the Supreme Court in Sonnar Nigeria Ltd. v. Partenreedri M. S. Nordwind (Owners of the Ship M. V. Nordwind) & anor (1987) 3 NWLR. (Pt. 66) 520, where it warned that:

“It is dangerous for a court to base its decision mainly on public policy, which indeed would be another means of avoiding the rules, law and procedure which govern a matter. Public policy is usually equated with public good. To ask a court to decide only as a result of public policy or public good, goes beyond the measure of liberalism in the application of the law or even viewing a matter from the socio-economic context of law. Who is to determine what constitutes public policy? To rely on public policy or public good simpliciter is to give room for uncertainty in the law. It is a way ‘to beg the question”.

This indicates a pro-enforcement stance.

Funke Adekoya

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