AIC Ltd (Respondent) v Federal Airports Authority of Nigeria (Appellant)

This case involved an appeal by the Federal Airports Authority of Nigeria (FAAN) against a decision of the Court of Appeal which had reinstated an order made by the High Court permitting AIC Ltd to enforce a foreign arbitration award against FAAN. The High Court had set aside the order permitting enforcement on the ground that FAAN had provided security for part of the award late and that AIC would thereby receive an unintended windfall. The Court of Appeal had set aside the judge’s order, holding that she should have carried out a two-stage analysis of the application to reconsider the order and that there was no sufficient reason for the late provision of the security to justify reconsideration of the order. The Supreme Court allowed the appeal in part, holding that the Court of Appeal had erred in requiring a two-stage analysis and in its assessment of the reasons for the delay in providing the security. The Supreme Court held that the discretion to set aside an order made before it is sealed should be exercised by weighing all relevant factors in the balance, the principle of finality being a weighty factor to be given central importance, but not necessarily decisive. It was also held that there had been no good reason for the delay in providing the security. The result was that the order permitting enforcement of the award was to be set aside, but the security already provided was to be retained by AIC.

The Supreme Court emphasised that the discretion to set aside an order before it is sealed should be exercised by weighing all relevant factors in the balance, the principle of finality being a weighty factor to be given central importance, but not necessarily decisive. It was held that the discretion should not be exercised by reference to a two-stage process. The Court of Appeal had also erred in its assessment of the reasons for the delay in providing the security, having failed to take into account the extent to which FAAN had delayed in taking steps to provide it. The result was that the order permitting enforcement was to be set aside, but the security already provided was to be retained by AIC. The Court held that the security should not be returned to FAAN because that would be an unduly favourable outcome in the circumstances.