A:
Introduction
Men have never cherished breasts as much as
they did last month. Last month – October – marked breast cancer awareness
month. This year’s had been exceptional in that, a great number of men were
seen on social media platforms promoting awareness about the debilitating
disease that has caused, and continue to cause, immense grief to many families.
It is a refreshing development and one can only pray for a sustained male
interest in such mammalian matters.
One other subject that gained traction last
month was international arbitration. October, 2023 could well have being
christened ‘African international arbitration awareness month.’ Here is why. Nigeria
won a sweet victory over Process & Industrial Development (P&ID) in the
English High Court (Commercial Division). The win came when the Court set aside
an arbitral award of about US$11 billion made against Nigeria in favour of
P&1D sometime in 2015. Thus, Nigeria escaped Armageddon by the skin of its
white and green teeth. Sister nation – Ghana – was not so lucky. Court bailiffs
and auctioneers were reportedly sniffing out Ghana’s assets in the United
Kingdom that are unencumbered by diplomatic immunity to sell and pay off an
arbitration-induced judgment debt. This judgment debt of about US$140 million,
according to reports, arose when Ghana lost arbitral proceedings filed against
the country by a company called Ghana
Power Generation Company Ltd (GPGC).[1]
Thus, as Nigeria is deservingly popping
Champagne, Ghana is gnashing its teeth in the teeth of crippling domestic debt
exchange and potentially losing Regina House.[2] Though
the outcome of the two cases are different, there are some interesting
similarities between them. For instance, both cases involved investor-State
arbitration. Also, both cases arose out of the termination of gas processing
plant agreements. The investor companies that took the African States to arbitration
were owned by foreign investors or, at least, had majority foreign share
ownership.
Again, the arbitration panel in each case
had, at least, one arbitrator who is a national of the State involved. In both
cases, the panels had majority of its members being foreign nationals (mostly
UK nationals). Furthermore, both arbitration proceedings were held in London as
the seat of arbitration, though under different tribunals.[3]
One striking difference between the two cases is that, whereas the Nigerian arbitrator
on the arbitral panel dissented and held that Nigeria was not liable to pay any
money to P&ID, the Ghanaian arbitrator sided with the majority and held
that, Ghana must pay compensation to GPGC.
This article discusses the antecedents to the
two arbitral awards. Considering that both arbitral decisions ended up before
the English High Court, the article also discusses the concept of judicial
supervision of arbitral awards under English law. Most importantly, it
highlights this unique feature in English Arbitration law that gives the High
Court jurisdiction not only to judicially review arbitration proceedings but
also, to judicially consider the substantive
matter that was the subject of arbitration. This law may appear to be in
conflict with the autonomy of arbitral proceedings. But the writer argues that
seeing the positive outcome of the English High Court’s intervention in the Nigeria v P&ID case as a result of
the Court’s jurisdiction to reopen and examine the merits of the arbitral award
on grounds of alleged fraud, perhaps other jurisdictions (including Ghana and
Nigeria) should consider adding such a provision to their arbitration laws.
B:
Nigeria’s sweet victory in Federal
Republic of Nigeria v Process & Industrial Development
On 23rd October, 2023, the world
woke up to the relieving news that the High Court in England had set aside a
humungous US$11 billion arbitral award that had been made against Nigeria in
2015.[4]
The arbitral award had been made in favour of a British Virgin Islands company called
Process & Industrial Development (P&ID). Sensing that paying such a
colossal amount of money could literally bring the country on its knees,
Nigeria applied to the High Court in London[5]
for an order to set aside the arbitral award. Nigeria’s grounds for applying to
set aside the award were that, the underlying contract was obtained by fraud
and corruption, among other reasons.
Now, to the background of the case.[6] In
2006, two Irish businessmen set up a company called Process & Industrial
Development (P&ID). Sometime in 2010, that is, four years after the company
was formed, it entered into a contract with Nigeria’s Ministry of Petroleum Resources
to build a gas-processing plant in Calabar, Cross Rivers State. But the plant
was never built. In 2012, P&ID filed arbitration proceedings against
Nigeria. The contract’s arbitration clause specified London as the seat of
arbitration, meaning the arbitration had to be held in London. The 3-member
arbitration panel was made up of the following:
1. Lord Hoffmann, retired UK judge (chair);
2. Sir Anthony Evans, KC, retired UK judge, and
3. Chief Bayo Ojo, SAN, former Attorney-General
of Nigeria
At the arbitration, P&ID argued, among
others, that Nigeria had not supplied adequate infrastructure and wet gas for
the project to commence. The arbitral tribunal held[7]
that, Nigeria had repudiated its contract with P&ID and made an award on
liability in 2015 against Nigeria. Nigeria was ordered to pay US$6.6 billion as
compensation for the lost gas contracts, plus interest at 7%.
In 2016, Nigeria filed an application at the
High Court in London to challenge the liability award. But the application was
dismissed on the grounds that it was filed too late and it also had no merit. Nigeria
did not give up. It obtained discovery orders from the courts in Cayman
Islands, New York and Cyprus. In 2020, the English High Court[8]
granted Nigeria an extension of time to bring a fresh challenge against the arbitral
award.
The Court found that there was a “strong prima facie” case that the award was
procured by corruption, perjury and dishonest conduct.
In January, 2023, an eight-week
trial began at the English High Court.[9]
Nigeria alleged that the gas processing plant contract was a sham from the
outset and had been obtained through bribery of government officials and that,
P&ID never intended to construct the plant. It also alleged that the gas
plant was a device to procure an arbitration award from the State. P&ID
denied the allegations of bribery, saying Nigeria had lost the arbitration
because of institutional incompetence.
The Court gave its decision on 23rd
October, 2023 and held that Nigeria had suffered substantial injustice. The
Court set aside the $11 billion arbitral award. It found that P&ID had paid bribes to a former legal
director at the Ministry of Petroleum Resources to procure the contract; and
had made further payments to her during the arbitration. Also, P&ID had provided the tribunal with
evidence it knew to be false, namely a witness failed to mention the bribes
paid to the legal director in his witness statement. Additionally, P&ID had received several of Nigeria’s
privileged and confidential internal legal documents, and had improperly
retained them. According to the Court, if the bribery and suppression of evidence
had been known to the arbitral tribunal, it would have reached a different
decision.
Apart from the relieving outcome of the case,
the Judge also touched on many salient points that are important to arbitration
practitioners. First, he touched on the need for diligence in drafting
commercial contracts, especially where there are State parties involved. Secondly,
the Judge provoked debate on whether more attention must be given to arbitral
proceedings where huge sums of money are involved. This is a debate that
touches on the age-old principle of autonomy of arbitral proceedings. Further,
the Judge commented on the unsatisfactory legal representation that Nigeria had
during the arbitral proceedings. He noted as follows:
“The
case has shown examples where legal representatives did not do their work to
the standard needed, where experts failed to do their work, and where
politicians and civil servants failed to ensure that Nigeria as a State
participated properly.” … Even without the dishonest behaviour of P&ID,
Nigeria was compromised.”
The Judge noted that the case also raised
concerns about confidentiality in significant arbitrations involving an
investor and a State. He lamented about the fact that there was no public or
press scrutiny of what was going on and what was not being done right. According
to the Judge, an open process gives the chance for the public and press to call
out what is not right.[10]
The High Court’s momentous decision has been
hailed in many circles, not least, by Nigeria’s current and former presidents.
For instance, former President Muhammadu Buhari has given a statement, praising
the Court’s decision and giving insights into the trauma Nigeria suffered to
secure the sweet victory in the end.[11] I
cannot help but quote him in detail:
“Rarely in
modern times can so few have tried to take so much from so many. If Nigeria had
lost its arbitration dispute with Process & Industrial Development in a
London court on 23rd October, it would have cost our people close to USD15
billion. We won, and all decent people can sleep easier as a result. Justice
Robin Knowles said Nigeria had been the victim of a monstrous fraud… But
ordinary Nigerians never took the decisions that ended up before Justice
Knowles. Had Nigeria lost, it would have required schools not to be built,
nurses not to be trained and roads not to repaired, on an epic scale, to pay a
handful of contractors, lawyers and their allies - for a project that never
broke ground. How did it get to this point? How did Nigeria prevail? Was this a
one-off, or par for a shabby and distasteful course? What are the lessons for
the future? The ‘P&ID Affair’ was already firmly set by the time I came
into office in 2015. A company registered in the British Virgin Islands that no
one had heard of, with hardly any staff or assets, had won a contract to build
a gas processing plant in Cross Rivers. The company was owned by Irish intermediaries
who knew Nigeria well and had done business in everything from healthcare to
fixing tanks. The previous government could not supply the gas. The plant was
never built. Construction was not started. P&ID did not even buy the land
for the facility. But the contract, incredibly, was clear: P&ID could sue
Nigeria, and claim all the profits it might have made over 20 years as if
everything had been completed. Nigeria was in court in London, trying to talk
down liability and costs. Back at home, fixers were looking to work out a quiet
settlement. This is often the way. A lot of contracts end up in dispute.
P&ID won a settlement in 2017 of USD6 billion, with compound interest.
People, including out of work ex-British Cabinet Minister Priti Patel, were
queuing up to insist we paid, or risk Nigeria becoming an untrustworthy trade
pariah. It was clear that far from the whole story had been told. I tasked Abba
Kyari, my chief- of-staff and Attorney-General of the Federation, Abubakar
Malami, with finding a way, even at that late stage and despite so much
conflicting advice, to get us a fair hearing. Working with a number of
different agencies and senior officials of government, we began to find a huge
amount of evidence, not all of which Justice Knowles was to accept. But he
agreed that P&ID had paid bribes... My own view is that this whole, sorry
affair shows how important it is to follow the legal process in resolving a
dispute. It shows that given time and opportunity for each side to present
their case, the temple of justice can satisfactorily resolve all disputes
without resort to extra-judicial measures. It was definitely worth the
struggle: this was an attempted heist of historic proportions, an attempt to
steal from the treasury a third of Nigeria’s foreign reserves… We need better
contracts, in the public and private sectors. And we need greater transparency:
the reality is that, had P&ID not conjured up quite such an outlandish
ransom, they may have found themselves in the same place as the myriad [of] other
invisible contractors who all too often quietly take Nigeria for many millions
in out of court settlements. Sterner sanctions are indicated for Nigerian
public officials who have been proven to connive with foreign criminals to
defraud our country. Nigeria has won this battle with corruption, but the war
is far from over.”
In a press release issued by the Nigerian
Government after the decision, it noted as follows:
“[It] marks the
culmination of over a decade of legal action and is not just a victory for the
people of Nigeria, but any similar target of corruption and fraud
… The judgment also
serves as a damning indictment of predatory international investors, who should
now rightfully be deterred from preying upon Nigeria and other developing nations
to satisfy their greed. P&ID and its associates shamelessly attempted to
defraud the country and enrich themselves through the sharing of Nigeria’s
privileged documents, fraud, bribery and corruption on an industrial scale.
Those efforts, which took place over many years, have finally been uncovered
for all to see… Nigeria is confident that this judgment will draw a line in the
sand, ensuring that any parties who think African nations are an easy target
for exploitation are forced to think again… States would no longer be held
hostage by economic conspiracies between private firms and solitarily corrupt
officials.”
C: Ghana,
the vanquished in GPGC v The Government
of the Republic of Ghana
Just a few days before Nigeria’s victory in Nigeria v Process & Industrial
Development was announced, Ghana had been scared out of its wits by
impending execution against her assets in the United Kingdom to settle a $140
million arbitration award. How so? Well, this is what reportedly happened. In February, 2015, Government of Ghana entered into
negotiations with Ghana Power Generation Company Ltd (GPGC) to procure
a power-generation plant as part of efforts to curb the country’s electricity
supply crisis (popularly known as ‘dumsor’). The contract was signed and ratified
by Parliament.
By November 2016, the power plant
was shipped to Ghana after an inspection by a Ghanaian official. But just one year
after signing the contract, the government set up a committee to review all its
26 power purchase agreements, including that of GPGC.
There was a change in government
in 2017 but the committee continued its work and submitted its report. The
committee recommended that GPGC’s contract must be terminated due to the high
cost of operating the power plant and the likelihood that the plant will be
idle. The Government was also concerned about the excess capacity generated by
the various power plants and its effect on the public purse, among other
reasons. The Government terminated the contract.
GPGC challenged the Government’s
decision to terminate the contract. It alleged that the Government delayed in providing
a site for the plants and securing requisite statutory licenses for GPGC. Also,
the Government assured GPGC that its contract will not be deferred or
terminated. The contract was terminated in August, 2018 but Ghana failed to
make the ‘early termination payment’ as contained in the contract. GPGC,
therefore, hauled Ghana to arbitration to stake a claim for compensation for
breach of contract. The seat of arbitration was London.
On 26th January, 2021,
the tribunal gave its decision and held that, Ghana had breached the contract
and made an award of US$140 million in favour of GPGC for the wrongful
termination of the contract. In November, 2021, GPGC applied to the High Court
for an order to enforce the arbitral award.[12] Ghana also applied to set
aside the award but the application was dismissed. Ghana’s application to
challenge service of court processes by alternative means (that is, by email
and service on Ghana’s High Commissioner in the UK) was dismissed on October,
2023. Ghana has no option now but to pay the judgment debt.
D: Similar
circumstances, different approaches, different results
A reading of the facts, instances and
circumstances surrounding the Nigerian and Ghanaian cases show a similar
pattern of events. Not surprisingly, both countries moved to set aside the
arbitral awards made against them at the High Court in London. But the countries adopted different
approaches and, therefore, obtained different results. When Nigeria did not
succeed in its effort to set aside the arbitral award on grounds of delay, the
country did not relent. It filed an application for extension of time to set
aside the arbitral award on grounds of fraud relating to the underlying gas processing
plant agreement.
Ghana also moved the English High Court to
set aside the arbitral award and the application was dismissed. But unlike
Nigeria, Ghana did not put any application before the High Court to challenge
the gas processing agreement itself. That is the point of divergence that sets
the two cases apart. At the arbitration hearing, Ghana had stated that it
terminated the agreement with GPGC due to the high cost of operating the gas
plant. Secondly, the plant was going to be idle because there was not enough
natural gas to power its turbines in Tema where it was to be located. Thirdly,
Ghana was concerned about the substantial
excess capacity – being generated by about 26 such emergency plants - and its
effect on the public purse.
Additionally, the then Minister of
Energy is reported to have stated that GPGC had failed to fulfil conditions
subsequent to the signing of the agreement. Also,
contrary to the requirements of section 11 of the Energy Commission law,[13] GPGC had not obtained a
license to engage in the business or commercial activity for the sale of
electricity from the Energy Commission. GPGC, therefore, had no capacity to
execute the emergency power agreement and so, the agreement was null and void
for want of capacity. Furthermore, GPGC had illegally started construction
activities on site without siting and construction permits. Since the
non-fulfilment of the conditions subsequent was wholly attributable to the
action or inaction of GPGC, it was rather GPGC that was liable to pay Government
of Ghana ‘early termination payment’ and other reasonable costs within 90 days when
the Government issued the termination notice.
In the light of the above facts,
it could be argued that Ghana had legitimate grounds for terminating its
agreement with GPGC. Even if the arbitration panel unanimously rejected Ghana’s
case and made a huge compensatory award in favour of GPGC, Ghana could apply to
the English High Court for redress as Nigeria did. Under its power of judicial
supervision, the High Court could have reopened the substantive case that was
heard before the arbitration panel. Thus, the Court could have delved into the
circumstances under which Government of Ghana entered into the emergency power
agreement with GPGC when the Government knew, or ought to have known, that the
country’s 25 or so gas processing plants’ production capacity already far
exceeded its total energy needs.
Ghana could plead that the terms
of the emergency power agreement were unconscionable. For instance, the ‘take
or pay’ policy clause meant that whether Ghana took any power or not, GPGC
stood to make millions of US dollars every year from Ghana for, at least, 4
years. Also, at the time the agreement was made, the country was facing a
severe power crisis and the owners of GPGC took undue advantage of Ghana’s
vulnerable situation, hurriedly registered GPGC and entered into the agreement.
GPGC itself was a new company with no record of producing power. In fact, as Ghana
stated, the GPGC did not even have a license from Energy Commission to produce
power or electricity. Yet, it managed to secure an agreement with the
Government to supply electricity. As it happened, a few months after signing
the agreement, the Government saw there was something wrong and set up a
committee to review its power agreements, including GPGC’s.
Similar to the Nigeria/P&ID
case, pertinent questions that could be raised before the High Court include
the following:
·
Who were the Government
ministers and other officials (Ministry of Power/Energy, Energy Commission, etc.)
who supervised or signed the Ghana/GPGC agreement?
·
Were they influenced
by any acts of bribery and corruption by GPGC officials?
·
Were there any
persons (Ghanaian or foreign) who were criticizing Government of Ghana for terminating
the contract?
·
Are there any persons coercing, browbeating or
stampeding Ghana into paying the arbitral award to GPGC?
So far, Ghana has taken no such
steps at the High Court to abrogate the underlying agreement with GPGC, in
spite of all the sound grounds it stood on to terminate the agreement. It
appears Ghana considers its fate sealed and it is only flailing its arms in
despair. From whence cometh help, no one knows. All we know is that, debt-ridden
Ghana – currently under a debilitating IMF programme that has allowed foreign citizens
to be physically planted at our Ministry of Finance and Bank of Ghana - is to
pay about US$140 million for zero kilowatt of electricity. A huge part of the money
will go to Trafigura in Singapore. The remainder will be ‘spoils of war’ for
the local Ghanaian shareholder(s), contractors, lawyers[14] and their allies – ‘for a
project that never broke ground.’ The losers will be the people of Ghana. The loss also
means schools will not be built, nurses and teachers will not be trained,
hospitals will not be built, roads will not to constructed or repaired, and IMF
may have a permanent home in Ghana.
E: The
concept of “judicial supervision” under English arbitration law
It is interesting to observe how the English High
Court delved into the substance of the underlying gas plant agreement - that was the subject of the arbitration
proceedings - before reaching its
decision in Nigeria v P&ID. The
Court was able to do so because of the unique provisions in English arbitration
law that empowers a court to deal with the substance of the subject-matter of
arbitration.[15]
The provisions – sections 45 and 69 of the Arbitration Act, 1996 - have been
described as more controversial, perhaps less adaptive or modern, and a more
uniquely English provision for judicial supervision. The provisions establish a
basis for court intervention in arbitral proceedings on a substantive law
basis. But
the parties may exclude this form of judicial supervision by agreement in an
international arbitration through an "exemption agreement." It is
more difficult to exempt it in domestic arbitration, though.[16]
As Carbonneau rightly notes,
“[t]he objective of
substantive recourse to the courts is to provide the consumers of arbitral
services with a remedy in those exceptional circumstances when an arbitral
ruling on the merits would significantly compromise the parties' rights, the
legitimacy of the arbitral process, or the
integrity of the law itself. The right of
judicial recourse in section 69 makes it abundantly clear that its aim is to
act as a means of avoiding or repairing instances of fundamental injustice.”[17] (My
emphasis in italics)
This exact objective was what was achieved in
Nigeria v P&ID.
The questions that should
interest us are these: Should the English High Court have reopened the
substantive case that went to arbitration in GPGC v Ghana to unravel how Government
of Ghana entered into a contract for such an expensive power-generating plant
when there were already several such contracts in operation? Is it possible
that the inquiry into the substantive issues would have revealed acts of
bribery and corruption, suppression of evidence, and other vitiating factors –
such as unconscionability – and acts of malfeasance as was the case in Nigeria v P&ID? Should other countries emulate UK law on substantive
judicial supervision of arbitral proceedings in both domestic and international
arbitration – both during the arbitral proceedings and in relation to the award
itself?
F:
The role of lawyers in arbitration
proceedings
One issue that stuck out like a sore thumb,
especially in Nigeria v P&ID, was the role of lawyers in
arbitration proceedings. The High Court judge, Knowles, J., criticised the poor
legal representation Nigeria had at the arbitration proceedings. He observed
that the legal representatives did not do their work to the standard needed.
For instance, Nigeria’s lead Counsel apparently did not understand points being
put to him when the quantum of compensation was being determined. Counsel had
also not put issues to P&ID’s experts at the quantum stage. It also emerged
that, P&ID had paid bribes to a former legal director at the Ministry of
Petroleum Resources before P&ID got the contract to build the gas plant.
The judge said he would refer a copy of his
judgment to the Bar Standards Board and Solicitors Regulation Authority in relation
to the conduct of the two lawyers who represented P&ID at the arbitration
proceedings. He found that the two lawyers had reviewed privileged documents
obtained from Nigeria and that “their decision not to put a stop to it, at
least by informing Nigeria or immediately returning the documents they knew
were received, was indefensible.” He said they behaved in this way “because of
the money they hoped to make.” Nigeria had alleged that the pair were set to
receive “life-changing sums of money” in case of P&ID’s success. One of the
lawyers owns an offshore company that acquired a majority interest in P&ID
after the award was issued. The other lawyer is a nephew of one of the owners
of P&ID.[18]
In the light of these developments, it is
contended that, perhaps, the rules on disclosure by arbitrators, such as disclosures
on potential conflict of interest situations, should be demanded of lawyers who
represent parties in arbitration proceedings. The jury is still out on the pros
and cons of such a proposition, though.
G: Why
do African countries still choose London as seat of arbitration?
One nagging issue that African arbitration
practitioners have failed to confront and address is the seeming unbridled
appetite of African States to choose London as seat of arbitration. It is
almost a matter of course that every dispute resolution clause in international
agreements between African countries and foreign companies opts for arbitration
and cites London as the seat of arbitration. This development has proven
inimical to the growth of arbitration as a mode of resolving international
commercial disputes in Africa.
Be that as it may, many African countries
have in recent years seen the need to set up arbitration centres within their
own jurisdictions to bring arbitration proceedings close to home.
Currently, nearly 100
arbitration institutions of various sizes and areas of focus exist across
Africa.[19] The top five arbitral centres in Africa are
the Arbitration Foundation of Southern Africa (AFSA), the Cairo Regional Centre
for International Commercial Arbitration (CRCICA), the Kigali International
Arbitration Centre (KIAC), the Lagos Court of Arbitration (LCA), and the
Nairobi Centre for International Arbitration (NCIA).[20]
Other notable arbitration institutions are Ghana Arbitration Centre, Ghana ADR
Hub, Mauritius International Arbitration Centre and Nairobi Centre for
International Arbitration. In the light of the above statistics, it is a shame
that London appears to be the de facto
seat of choice for arbitration between African countries and so-called foreign
investors.
Of course, there are those who benefit from
the status quo and are quick to rationalize
the situation.[21]
That is not the end of the continent’s ignominy. Most of the arbitrators empanelled
for arbitral proceedings in London are foreign citizens - mostly British,
European, American or Canadian. It is only in recent times that African
countries are appointing their citizens as arbitrators.[22] Moreover, with London mostly chosen as the seat of
arbitration, the parties also hire lawyers from law firms based in London.
Their legal fees ran into millions of dollars, whilst equally qualified and
experienced African law firms are sidelined. In the result, by choosing London
as seat of arbitration, African countries create
jobs for foreign arbitral institutions and citizens when we have comparably
distinguished institutions and human resource in African countries. Most
foreign arbitrators who are appointed to sit on international arbitral
proceedings involving African countries are retired judges and lawyers of many
years standing at the Bar. Needless to say, African countries have their own
home-grown and respected retired judges and accomplished lawyers who can hold
their own in handling arbitral proceedings of any magnitude and subject-matter
anywhere in the world.[23]
H:
Conclusion
Nigeria’s victory and Ghana’s vanquish in
recent cases that came out of international arbitration proceedings have given
enough food for thought about so-called foreign investments in Africa. The
cases have exposed the potential for abuse of arbitration as a dispute
resolution mechanism. The role of lawyers and arbitrators in such cases have
also been highlighted and many lessons have been learnt from both cases.
FOOTNOTES
[1] This company is
reported to be a subsidiary of Trafigura, a company based in Singapore
[2] Excuse the pun. “Regina House” is Ghana’s commercial property in London, UK, that serves as offices for
Ghana International Bank and other business entities, and reportedly targeted
for attachment in execution of the judgment debt.
[3] The Ghanaian arbitration was held before the London-based
United
Nations Commission on International Trade Law (UNCITRAL)
tribunal whereas the Nigerian proceedings were held before the London Court of
International Arbitration (LCIA).
[4] The original award
made against Nigeria in 2015 was for the amount of about US$6.6 billion, which
ballooned to US$11 billion over an 8-year period due to added compound interest
of 7%. The US$11 billion is almost four times the amount of US$3 billion Ghana
is borrowing from the IMF, for which reason Ghana’s liver and intestines are
now in brine in Washington, DC
[5] This was because
London was the seat of arbitration
[6] As summarized from an article by Susannah Moody of Global Arbitration Review dated 23rd October,
2023, titled: “The most severe abuses of the arbitral process: UK court overturns
mega-award on grounds of fraud”
[7] By a 2-1 majority decision; Bayo Ojo dissenting. The award is now
worth over US$11 billion, amounts to a third of its annual budget this year
(2023).
[8] Coram: Sir Ross Cranston
[9] Coram: Robin Knowles, J. Nigeria’s challenge was made under section 68 of the English Arbitration
Act, 1996
[10] Customary arbitration
under customary law scores high marks on this as proceedings are held in
public. Perhaps, the time has come for formal arbitral institutions (at least,
in proceedings involving State parties) to make their proceedings public. It is
suggested that all governmental administrative tribunals must also hold their
hearings in public for scrutiny, transparency and openness to avoid abuse
[11] See: Former President Muhammadu Buhari’s 29th October, 2023
insightful tweet on X (formerly Twitter) titled “A matter of principle.”
Source: https://twitter.com/mbuhari/status/1718564529049628683?s=48&t=j41QfUgfOUfr0iSOTvGdLw
(accessed on 29th October, 2023)
[12] Under section 66 of
the English Arbitration Act, 1996
[13] Energy Commission Act,
1997 (Act 541) (as amended)
[14] For instance, in Federal Republic of Nigeria
v Process & Industrial Development, two
London-based lawyers who advised P&ID during the arbitration, Trevor Burke,
KC of Three Raymond Buildings and Seamus Andrew, now of Velitor Law, reportedly
stood to receive up to US$850 million and US$3 billion respectively in the
event of a successful outcome for P&ID. In GPGC v The Government of the Republic of Ghana, the arbitration tribunal
ordered Ghana to pay costs of US$3 million for GPGC’s legal
fees and the tribunal also awarded US$614,353.86 as the tribunal’s costs. Then
also, Ghana has to pay legal fees to the lawyers it retained in Ghana and London
for the arbitration hearing, as well as the setting aside proceedings at the
High Court - Omnia Strategy, Volterra Fietta, White & Case, etc.
[15] Section 45 (1) of the Arbitration Act, 1996 provides as follows:
"Unless otherwise agreed by the parties, the court may on the application
of a party to arbitral proceedings (upon notice to the other parties) determine any question of law arising in the
course of the proceedings which the court is satisfied substantially affects
the rights of one or more of the parties.” (Emphasis in italics supplied).
Section 69, on Powers of the court in
relation to award, also states: “(1) Unless otherwise agreed by the
parties, a party to arbitral proceedings may (upon notice to the other parties
and to the tribunal) appeal to the court on a question of law arising out of an
award made in the proceedings… (3) Leave to appeal shall be given only if the
court is satisfied— (a) that the
determination of the question will substantially affect the rights of one or
more of the parties.” (Emphasis in italics supplied)
[16] See: Thomas E. Carbonneau, A Comment on the 1996 United Kingdom
Arbitration Act, 22 Tul. Mar. L.J. 131 (1998) at 148-151
[17] Same place at 150-151
[18] See p. 3 of “The most severe abuses of the arbitral process”: UK court overturns
mega-award on grounds of fraud” article by Susannah Moody of Global Arbitration Review, dated 23rd October, 2023
[19]https://www.whitecase.com/insight-our-thinking/institutional-arbitration-africa-opportunities-and-challenges#:~:text=According%20to%20survey%20respondents%20in,Arbitration%20(CRCICA)%2C%20the%20Kigali (accessed on 29th October, 2023)
[20] Same source as above.
[21] For instance, according to White & Case, a London-based law
firm with many African States as clients (including Ghana), “despite the multitude of emerging African
arbitration institutions, most African users appear to continue to prefer to
resolve their disputes primarily under the auspices of the ICC and LCIA. The
reasons for this are complex and multi-faceted, though this preference is most
likely linked to the ICC's and the LCIA's proven track records and substantial
experience, which underlie their well-established reputations. The emphasis on
reputation, recognition and experience effectively results in a greater
weighting towards long-established institutions. This means it may take a long
time before newer arbitration institutions in Africa can build their own
international following and performance track record.” These oft-cited factors
are just a ruse to perpetuate the unacceptable preference of London to other
African cities as seats of arbitration. If we fail to use our arbitration
centres, how do we expect them to develop the so-called experience and
reputation? At any rate, the ICC and LCIA would not have developed if their
services had not been patronized. African arbitration centres and institutions
need the same patronage for growth.
Source: https://www.whitecase.com/insight-our-thinking/institutional-arbitration-africa-opportunities-and-challenges#:~:text=According%20to%20survey%20respondents%20in,Arbitration%20(CRCICA)%2C%20the%20Kigali
(accessed on 29th October,
2023)
[22] For instance, Nigeria
appointed Chief Bayo Ojo – a distinguished, experienced and affable arbitrator
– in the Process
& Industrial Development case and Ghana
appointed Prof. Albert Fiadjoe – an accomplished and respected professor of law
and astute arbitrator in the Ghana Power
Generation Company Ltd case. It is also gratifying to note that African
countries are appointing qualified young arbitrators to sit on international
panels and the results have been great.
See, for example, Prof. Richard Oppong as a panel member in Beijing Everywhere Traffic & Lighting
Tech. Co. Ltd v Ghana where the arbitration panel unanimously dismissed a
multi-million dollar claim filed by a Chinese company against the Republic of Ghana
[23] Here, reference is not
made to the corruption-infested ‘local champion’ types whose exploits on and
off the Bench are honoured more for their political sycophancy and boot-licking
rather than any appreciable knowledge of law
