Zhongshan Fucheng Investment Co Ltd v The Federal Republic of Nigeria

20 July 2023

[2023] EWCA Civ 867

Court of Appeal

Nigeria lost a lot of money in an arbitration case. They tried to get out of paying by claiming they had special legal protection (state immunity), but they waited too long to make that claim. The courts said they missed their chance, so Nigeria has to pay.

Key Facts

•Zhongshan Fucheng Investment Co Ltd (Zhongshan) obtained an arbitration award against the Federal Republic of Nigeria (Nigeria) for US$55.6 million.
•Nigeria did not honour the award and initiated a section 67 challenge under the Arbitration Act 1996, later discontinuing it.
•Zhongshan applied to enforce the arbitration award as a judgment under section 66 of the Arbitration Act.
•Cockerill J granted an ex parte enforcement order with a two-month and 14-day period for Nigeria to apply to set aside or vary the order.
•Nigeria missed the deadline and subsequently applied for extensions of time, raising state immunity only in a late witness statement.
•Cockerill J dismissed Nigeria's applications, finding the breaches significant and without good reason.
•Nigeria appealed, and Males LJ refused permission to appeal.
•Nigeria applied to reopen the refusal of permission under CPR 52.30.

Legal Principles

State immunity

State Immunity Act 1978, sections 1(2) and 9

Enforcement of arbitration awards

Arbitration Act 1996, sections 66, 67, 70(6), 70(7); CPR 62.18

Relief from sanctions

CPR 3.1(2)(a); Denton v White [2014] EWCA Civ 906

Reopening a final determination of an appeal

CPR 52.30

Court's jurisdiction in state immunity cases

J.H. Rayner Ltd. v. Department of Trade [1989] Ch 72; Benkharbouche v Embassy of the Republic of Sudan [2017] UKSC 62

Outcomes

Cockerill J dismissed Nigeria's applications for extensions of time.

Significant breaches of court orders, no good reason for delay, application of Denton principles.

Males LJ refused permission to appeal.

No arguable basis for appeal, judge correctly applied the law and procedure.

Court of Appeal dismissed Nigeria's application to reopen the refusal of permission to appeal.

Nigeria's appeal lacked merit, no real injustice to avoid.

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