A British court of appeal has upturned an order that prevented a Nigerian construction firm from enforcing parts of a $48m arbitration award.
The company, Akande International Corporation, is seeking damages against the Federal Airport Authority of Nigeria for disrupting a contract involving a hotel project.
According to a document obtained by our correspondent and dated November 26, 2020, FAAN in a Deed of Lease dated February 17, 1998, leased a site at Lagos airport to AIC for a term of fifty years to enable AIC could develop a hotel and resort complex.
However, by a letter dated May 16, 2000, FAAN directed AIC to refrain from work on the hotel development, adding that AIC had never been permitted to continue with the construction of the hotel and resort. AIC claimed damages against FAAN for the breach of the Deed of Lease.
The dispute between the parties was referred to a Nigerian-seat arbitration in accordance with an agreed arbitration clause. The commencement of the arbitration was delayed for six years because FAAN refused to appoint (or agree to the appointment of) an arbitrator.
On June 1, 2010, the award was made by Mr Justice Kayode Eso in favour of AIC in the sum of over $48m together with interest.
In July 2010, FAAN applied in the Nigerian High Court to set aside the award on various grounds. Although that challenge was upheld at first, it was overturned on appeal (albeit on a jurisdictional issue).
FAAN sought to appeal again, this time to the Supreme Court of Nigeria.
On January 10 2019, AIC applied to the English Courts for permission to enforce the award in the same manner as a judgment or order of the High Court, pursuant to section 101 of the Arbitration Act 1996. On February 28, 2019, an order giving such permission was made by Mrs Justice O’Farrell (“the O’Farrell Order”).
However, at a hearing on December 6, 2019, the Deputy High Court Judge Veronique Buehrlen, ordered that the construction firm had leave to enforce the arbitration award in its favour in the sum of $48m, together with interest.
In the following week, on December 13, 2019, the judge granted an application by FAAN to reconsider her order of December 6, and also invalidate AIC’s right to enforce the award.
When contacted, General Manager, Corporate Communications of FAAN, Mrs Henrietta Yakubu, declined to comment on the matter.
She said, “Honestly I don’t have a comment. There are more important things we are dealing with in FAAN.”
Buehrlen eventually allowed AIC to enforce the material parts of the award, not without acknowledging the points made by FAAN in Nigerian courts.
She also added that the court did not consider FAAN’s application to set aside the ward while the case dragged on.
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