Williams v Central Bank of Nigeria

Factual and Procedural Background

This opinion concerns an appeal from an order dated 24 January 2012 by Judge Beatson regarding whether the Appellant ("Dr Williams") could obtain permission to serve proceedings out of the jurisdiction on the Respondent ("the CBN") on a broader basis than previously granted. Dr Williams, a Nigerian qualified barrister residing in England, claims he was deprived of sums of US$6.5 million and Naira 5 million in 1986 due to a fraudulent sting operation allegedly involving the CBN and Nigeria's State Security Services ("SSS").

Dr Williams initiated proceedings in England in February 2010, obtaining initial permission to serve the CBN in Nigeria. Two of three original bases for his claim were later disallowed by Supperstone J, with the CBN's appeal dismissed but granted permission to appeal again on one issue by the Supreme Court. In July 2011, Dr Williams sought permission to re-amend his claim to add three new bases founded on a 1993 document known as "the Fidelity Guarantee," purportedly a directive from the Nigerian President, which came into his possession after the initial permission decision.

The CBN challenged this application, leading to an inter partes hearing before Beatson J in January 2012. Initially intending to refuse permission for all new claims, the judge ultimately granted limited permission to serve out jurisdiction for part of the Nigerian law claim relating to US$6.5 million, contingent on the failure of the CBN's appeal on the original claim. The appeal condition remains under consideration due to ongoing Supreme Court proceedings.

Subsequently, permission was given to Dr Williams to appeal the refusal to serve out jurisdiction on the contract and breach of trust claims and to rely on a newly discovered document, a 1993 letter from the CBN to the Nigerian President ("the CBN Letter"), acknowledging trustee duties and the holding of funds in a London account. This letter supports Dr Williams' argument for broader permission to serve proceedings out of jurisdiction.

The appeal hearing was held on 26 March 2013 with judgment reserved.

Legal Issues Presented

1. Whether there is a serious issue to be tried that the Fidelity Guarantee creates a private law trust in favor of Dr Williams.
2. Whether there is a serious issue to be tried that the Fidelity Guarantee creates a contract between the CBN and the Nigerian State for the benefit of Dr Williams, with the Nigerian State holding the benefit on trust.
3. Whether England is clearly or distinctly the appropriate forum for the determination of each of the three new bases of claim.
4. Whether the condition imposed by Beatson J—that permission to amend and serve out jurisdiction is dependent on the 1986 Trust claim continuing—should be removed.

Arguments of the Parties

Appellant's Arguments

• Dr Williams argued that the CBN Letter’s concession that the claim relates to property situated within the jurisdiction satisfies the jurisdictional gateway under PD6B paragraph 3.1(11).
• He submitted that there is a serious issue to be tried regarding the Fidelity Guarantee evidencing an intention to create a private law trust, based on express wording such as "custodian," "utmost good faith," and the ability to enforce payment with compound interest.
• He contended that the contract claim arises from the same document, which was intended to create legal relations and rights enforceable by Dr Williams as beneficiary, with the Nigerian State holding the benefit on trust.
• Dr Williams argued that England is clearly or distinctly the appropriate forum, supported by the CBN’s acceptance of English law and the choice of forum clause in the Fidelity Guarantee, as well as prior findings relating to the 1986 Trust claim.
• He sought removal of the condition that the permission to serve out jurisdiction depends on the survival of the 1986 Trust claim, arguing the Nigerian law claim stands independently.

Respondent's Arguments

• The CBN accepted for the appeal’s purposes that the Fidelity Guarantee is Nigerian legislation giving rise to a serious issue to be tried regarding enforceability under Nigerian law.
• However, the CBN argued that the language of the Fidelity Guarantee is inconsistent with it creating a private law trust, emphasizing that it is an executive order rather than a bilateral contract or trust document.
• The CBN contended that the document does not create a separate fund or private law rights, and that acknowledgement of the order does not amount to assuming private law obligations.
• The CBN relied on analogy with Swain v The Law Society, where statutory schemes do not imply private law trusts.
• Regarding forum, the CBN accepted that England is not clearly or distinctly the appropriate forum for enforcing Nigerian law claims, particularly given the conditional nature of permission tied to the 1986 Trust claim’s continuation.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by considering the nature of the Fidelity Guarantee, an executive order by the Nigerian President directing the CBN to return funds to Dr Williams with compound interest and waiving sovereign immunity defenses. The document was treated as valid and not forged.

In analyzing the trust claim, the court applied established English law principles on express trusts, requiring intention to create a trust, identification and segregation of trust property, identifiable beneficiaries, and administrative workability. While the Fidelity Guarantee’s language contained elements suggestive of trust (e.g., "custodian," "utmost good faith"), the court emphasized the document’s public law origin and executive character.

The court concluded it was not reasonably arguable that the Fidelity Guarantee was intended simultaneously as a public law legislative instrument and a private law trust or contract. The executive nature of the order and absence of express intention to create private law obligations precluded the existence of a private law trust or contract claim on the facts.

The CBN Letter, while acknowledging trustee duties and the holding of funds in London, was considered post hoc and insufficient to establish private law obligations, amounting only to the subjective understanding of the CBN Governor.

Regarding the forum question, the court found England to be clearly or distinctly the appropriate forum for the Nigerian law claim. This was supported by the CBN’s acceptance of English law applicability and the choice of forum clause in the Fidelity Guarantee, as well as the prior finding that England was the natural forum for the related 1986 Trust claim.

Finally, the court examined the conditionality imposed by Beatson J that permission to serve out jurisdiction was dependent on the survival of the 1986 Trust claim. Given the concession that all relevant sums were situated in England and the independent jurisdictional basis of the Nigerian law claim, the court held that this condition should be removed.

Holding and Implications

The court's final decision was to allow the appeal in respect of the Nigerian law claim but to reject the appeal concerning the trust claim and the contract claim.

Holding: Permission to amend and serve out of the jurisdiction is granted solely for the Nigerian law claim based on the Fidelity Guarantee, with the removal of the prior condition linking permission to the continuation of the 1986 Trust claim.

Implications: The direct effect is that Dr Williams may proceed with the Nigerian law claim against the CBN in the English courts, including claims for both the US$6.5 million and the Naira 5 million sums. The trust and contract claims founded on the Fidelity Guarantee are not permitted to proceed. No new precedent was established beyond the application of existing jurisdictional principles and trust law to the unique facts of this case.