Supreme Court Clarifies Test For Re-Opening Judgment Before Order Is Sealed

• Published date: 23 June 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Herbert Smith Freehills
• Author: Ms Anna Pertoldi and Maura McIntosh

It has long been established that a judge has the power to re-open their judgment or order at any time until the order has been sealed. In a recent decision, the Supreme Court has clarified the approach a judge should adopt if asked to exercise this power, finding that the essential task is to do justice in accordance with the overriding objective of the CPR: AIC Ltd v Federal Airports Authority of Nigeria [2022] UKSC 16.

The Supreme Court rejected the notion that the discretion is constrained by a need to show "exceptional circumstances" before a judgment can be revisited, as stated in the pre-CPR authorities. It also rejected the Court of Appeal's decision that a two-stage process is needed, with the judge first considering whether the application should even be entertained before going on to consider the application on its merits. That would be inconsistent with the flexible nature of the judge's task in weighing the relevant factors.

However, the Supreme Court emphasised that a judge considering such an application should not start from a position of neutrality. Sufficient weight must be given to the principle of finality in litigation, which is inherent in the overriding objective, and is particularly important where the order in question is a final order. The question for the judge will be whether the factors in favour of re-opening the judgment are sufficient to outweigh the finality principle, together with any other factors supporting the original order.

Background

The claimant, AIC, issued proceedings in the English court against the defendant, FAAN, to enforce a Nigerian arbitration award against it for some US$48 million plus interest. The enforcement claim was adjourned pending the outcome of a challenge to the award in Nigeria, but on condition that FAAN provide security of around US$24 million by bank guarantee by an extended deadline of 14 November 2019. AIC had permission to enforce the award if the guarantee was not forthcoming by that date.

The guarantee was not provided by the deadline. FAAN applied for a further extension, to 5 December, and AIC cross-applied for permission to enforce the award. At the hearing of both applications on 6 December, at which point the guarantee still had not been provided, the judge gave an oral judgment permitting AIC to enforce the award.

In fact the guarantee was issued later on 6 December and a copy was provided to AIC. On 8 December, before the enforcement order had been sealed by the court, FAAN...