The UK Supreme Court has overturned a Court of Appeal decision requiring Nigerian National Petroleum Corporation ("NNPC") to provide US$ 100m in security while the case was remitted to the Commercial Court to decide on IPCO (Nigeria) Limited's ("IPCO") challenges to enforcement of an award. The Supreme Court held that while the English courts had the express power to make such orders for security under section 103(5) of the Arbitration Act 1996 (the "Act") in the context of an adjournment pending a challenge to the award in the jurisdiction where it was made, the present proceedings rather concerned a challenge to the enforcement of the award under section 103(3) of the Act. As such, no power to order security was available under the Act or the scheme of the New York Convention 1958 (the "Convention").: IPCO (Nigeria) Limited v Nigerian National Petroleum Corporation  UKSC 16.
The Supreme Court also provided guidance on the relationship between the Act and the New York Convention (the "Convention"), on which the relevant sections of the Act are based.
In its judgment in IPCO (Nigeria) Limited v Nigerian National Petroleum Corporation (No.3)  EWCA Civ 1144 & 1145, handed down on 10 November 2015, the Court of Appeal considered whether the Appellant ("IPCO") was entitled to enforce an arbitration award made against the Respondent ("NNPC") in Nigeria in October 2004 (the "Award").
In this significant decision, the Court of Appeal ordered that IPCO should be able, in principle, to enforce the Award, notwithstanding the existence of challenges to it in Nigeria, given the very significant delay in resolving those challenges before the Nigerian courts. On the facts of this case, the Court of Appeal considered that the alternative result (of yet further adjournment) would, in commercial terms, be absurd and inconsistent with the principles underpinning the New York Convention.
The Court of Appeal of the Lagos Judicial Division recently issued a pro-arbitration decision holding that courts may only intervene in arbitral proceedings where specifically permitted by Nigeria’s arbitration law and set aside an injunction obtained ex parte by Nigeria’s state oil company NNPC restraining arbitration proceedings brought by Chevron and Statoil.
Meanwhile, the Democratic Republic of Congo (DRC) has become the 150th state to accede to the New York Convention, making a notable reservation that excludes enforcement of arbitral awards that relate to mining interests in the DRC.
Whilst these developments continue the encouraging trend towards international norms in arbitration judicial practice and legislation in parts of Africa, careful planning and an awareness of the continent’s legal diversity remain as important as ever for businesses operating in the region.