AIC Ltd v Federal Airports Authority of Nigeria [2022] UKSC 16

AIC sought to enforce a Nigerian arbitration award in England. FAAN failed to provide a required bank guarantee on time, leading to an enforcement order. When the guarantee arrived hours later, the judge set aside the enforcement order. The Supreme Court clarified principles for reopening judgments before sealing, emphasising the finality principle within the CPR overriding objective.

Facts

AIC Ltd obtained an arbitration award of US$48.13m plus interest against the Federal Airports Authority of Nigeria (FAAN) in Nigeria. AIC sought to enforce this award in England under the New York Convention. The High Court initially granted enforcement without notice, but FAAN applied to set this aside pending Nigerian proceedings challenging the award. The court adjourned enforcement on condition FAAN provide a bank guarantee of approximately US$24m.

FAAN repeatedly failed to provide the guarantee by various deadlines. At a hearing on 6 December 2019, with no guarantee forthcoming, the judge made an Enforcement Order permitting AIC to enforce the award. Hours later, FAAN provided the guarantee. FAAN applied to reopen the judgment before the order was sealed, and the judge set aside the Enforcement Order.

Issues

Principal Legal Question

What principles should govern a judge’s decision whether to reopen a judgment and/or order before the order is sealed?

Secondary Issues

Whether a two-stage analysis is required when considering such applications; the weight to be given to the finality principle; and the relevance of relief from sanctions principles.

Judgment

The Supreme Court allowed FAAN’s appeal in part. Lords Briggs and Sales (with whom Lord Hodge, Lord Hamblen and Lord Leggatt agreed) held that while both lower courts erred in their approaches, the Enforcement Order should be set aside but AIC should retain the proceeds of the guarantee already paid.

The Finality Principle

The Court emphasised the fundamental importance of finality in civil litigation under the CPR overriding objective:

The principle of finality is of fundamental public importance… The successful party should not have to worry that something will subsequently come along to deprive him or her of the fruits of victory.

The Court rejected the Court of Appeal’s requirement for a mandatory two-stage process:

That would in our view be to impose a straitjacket upon the judicial exercise of a discretionary jurisdiction which is contrary to the way in which it was addressed in Re L and alien to the essentially flexible nature of the judge’s task when weighing competing considerations of potentially limitless variety against each other.

Applicable Principles

The Court stated:

The question is whether the factors favouring re-opening the order are, in combination, sufficient to overcome the deadweight of the finality principle on the other side of the scales, together with any other factors pointing towards leaving the original order in place.

The Court noted that a judge receiving such an application:

should not start from anything like neutrality or evenly-balanced scales.

Implications

This judgment provides authoritative guidance on the principles governing applications to reopen judgments before sealing under the CPR. It clarifies that while Re L established the overriding objective as the governing principle, the specific factors and their weight differ between family and civil proceedings. The addition of CPR Part 1.1(2)(f) regarding compliance with orders reinforces the finality principle.

The decision confirms that finality carries particular weight for final orders as opposed to case management decisions. Courts must balance this against competing factors but should not treat the scales as evenly balanced at the outset. The judgment provides flexibility for judges while emphasising that departing from finality requires compelling justification.

Verdict: Appeal allowed in part. The Enforcement Order was set aside and AIC’s application to enforce the Award was adjourned pending the outcome of Nigerian proceedings, but AIC was entitled to retain the proceeds of the bank guarantee already paid (approximately US$24m).

Source: AIC Ltd v Federal Airports Authority of Nigeria [2022] UKSC 16