In Process & Industrial Developments Limited v The Federal Republic of Nigeria  EWHC 2241, the English High Court enforced a US$9 billion arbitral award against the Republic of Nigeria, rejecting Nigeria’s arguments that (i) the arbitration was legally “seated” in Nigeria, and Nigeria’s Courts had set aside (part of) the award rendering it incapable of enforcement in England, and (ii) that even if the arbitration was “seated” in London, and not Nigeria, the Final Award was excessive, punitive in nature and contrary to England’s “public policy”.
The English Court found that:
- The language in the arbitration clause—that the “venue of the arbitration shall be London, England”—meant that the arbitration was legally seated in England, and not merely that the proceedings would be conducted in England;
- There was a “strong public policy in favour of enforcing arbitral awards”; and
- It was not contrary to public policy for the Court to enforce an award even if the damages awarded are higher than the English Court would consider correct and that the public policy grounds on which enforcement of an award can be refused are “narrowly circumscribed”.
In relation to public policy, the Court stated :
“The grounds on which enforcement of an award can be refused by reason of public policy are narrowly circumscribed. In Deutsche Schachtbau-und Tiefbohrgesellschaft mbH v Ras Al-Khaimah National Oil Co  2 Lloyd’s Rep 246, at page 254 Sir John Donaldson MR said this: “Considerations of public policy can never be exhaustively defined, but they should be approached with extreme caution. As Burrough J remarked in Richardson v Mellish (1824) 2 Bing. 229, 252, ‘It is never argued at all, but when other points
fail.’ It has to be shown that there is some element of illegality or that the enforcement of the award would be clearly injurious to the public good or, possibly, that enforcement would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the powers of the state
Concluding that :
“I am clearly of the view that there is no public policy which requires the refusal of enforcement to an arbitral award which states and is intended to award compensatory damages, and where, even if the damages awarded are higher than this Court would consider correct (as to which I express no view), that arises only as a result of an error of fact or law on the part of the arbitrators. The enforcement of such an award would not be “clearly injurious to the public good” or “wholly offensive to the ordinary reasonable and fully informed member of the public”. Furthermore, the public policy in favour of enforcing arbitral awards is a strong one, and, if a balancing exercise is required at all, outweighs any public policy in refusing enforcement of an award of excessive compensation. The labelling of such excessive compensation as “punitive” or “penal”, as the FRN seeks to do in this case does not alter this conclusion.”
See the following reviews of this case: