English High Court Adjourns Application To Enforce Nigerian Arbitral Award Pending Application In The Nigerian Courts, But Makes ‘Substantial' Interim Security Order

In AIC Limited v The Federal Airports Authority of Nigeria [2019] EWHC 2212, the English High Court adjourned an application made by AIC Limited ("AIC"), a Nigerian construction and property development company, to enforce a Nigerian arbitral award pursuant to the New York Convention worth approximately US$123 million (including accrued interest) made in its favour against the Federal Airports Authority of Nigeria ("FAAN"). The reason for the stay in enforcement was to allow the outcome of long-running court proceedings in Nigeria, concerning the validity of the original arbitral award.

Veronique Buehrlen QC (sitting as a Deputy High Court Judge) said that although the award lay "towards the 'manifestly valid' i.e. top end of the scale, in which significant further delay [was] likely to ensue and in which some element of prejudice to AIC will result from a continuing delay in enforcement", that had to be balanced against other factors. They included, in particular, the fact that the award had been set aside on the only occasion that the Nigerian application had been considered on its merits by the Nigerian courts (albeit that such order no longer stood), and the fact that it was "important to avoid conflicting judgments". Further, she considered that the factors militating against such an adjournment could be addressed by the provision of security, which she awarded in the sum of approximately US$24 million (equivalent to half of the original award, or just under three years' worth of accrued interest on it).

Background The original award, dating back to 2010, relates to a dispute between the parties over the lease of land at Murtala Mohammed Airport, Lagos. AIC leased the land from FAAN in 1998 in order to develop a hotel and resort complex. In 2000, FAAN directed AIC to refrain from work on the development, AIC promptly complied with this but was then prevented by FAAN from any further construction as planned. The dispute was referred to arbitration seated in Nigeria. After a lengthy dispute, in June 2010, the arbitrator awarded AIC approximately US$48 million plus interest of 18% per annum.

Following publication of the award, both parties commenced proceedings before the Nigerian courts. FAAN filed a motion to set aside the award, whilst the AIC requested the Nigerian High Court in Lagos to remit the award to the arbitrator on the ground he ought to have ordered specific performance. At the same time, the AIC asked the Court to enforce...