Arbitration Gordian Knot Must Be Cut Pleads Judge

In a striking example of an arbitration award merely firing the starting gun on years of intractable litigation, the High Court has lamented that, almost a decade after a contractor was awarded more than $99 million, not a penny has yet been paid.

The contractor had been engaged by a Nigerian company to design and construct a petroleum export terminal in Nigeria. There were a number of disputes between the parties after completion of the project was delayed by 22 months. Arbitrators had awarded the contractor more than $99 million in October 2004.

The dispute had subsequently been the subject of numerous hearings before the High Court and the Court of Appeal in which both the jurisdiction of the arbitrators and the quantum of the award were challenged. There were parallel proceedings in Nigeria which had featured allegations of conspiracy and fraud.

The parties had in 2009 entered into a consent order by which English proceedings seeking the enforcement of the award were adjourned. In dismissing the contractor’s application to restore those proceedings, the Court found that there had been no change in circumstances to justify re-opening the matter.

The Court observed, “It is in Nigeria where the enforceability of the award must be decided and I call upon the Nigerian courts to use their powers of case management to expedite (this matter). The award was issued on October 28 2004…and still there has been no substantive determination as to its validity. For the sake of the parties and the reputation of the Nigerian legal system, the Gordian Knot must surely be cut as quickly as possible.”