AIC Ltd v Federal Airports Authority of Nigeria

Factual and Procedural Background

The matter concerns an application under the Civil Procedure Rules (CPR) to reconsider a judgment and order that had been pronounced in open court but had not yet been sealed. Company A obtained a substantial arbitral award against Company B in a foreign arbitration. Company B challenged the award in the foreign courts, and those proceedings remain pending. In parallel, Company A applied in the courts of The State to enforce the award. A judge granted enforcement on a without-notice basis, giving Company B time to apply to set the order aside. Company B applied for an adjournment, and the judge ruled that the adjournment would be granted only if Company B provided security by way of a bank guarantee.

Security was not provided by the deadline. On 6 December 2019 the judge therefore made a final order (the “Enforcement Order”) permitting Company A to enforce the award. Within hours, Company B obtained the guarantee from Company C and asked the judge to reopen the Enforcement Order. On 13 December 2019 the judge re-opened the matter, set aside the Enforcement Order, granted relief from sanctions, accepted the late guarantee and again adjourned enforcement pending the foreign court proceedings.

Company A appealed. The Court of Appeal restored the original Enforcement Order, criticising the judge for not adopting a two-stage test when asked to reopen her order. Company B appealed to the Supreme Court.

Legal Issues Presented

1. What principles govern a judge’s discretion to reopen and vary a judgment and order that has been pronounced but not yet sealed?
2. Whether a structured two-stage test (permission stage followed by merits stage) is mandatory when such an application is made.
3. Whether late provision of the ordered security and the attendant change in circumstances justified setting aside the Enforcement Order.
4. The relevance of relief from sanctions principles (CPR 3.9 and Denton guidance) in deciding whether to maintain or overturn the Enforcement Order.

Arguments of the Parties

Appellant’s Arguments (Company B)

• The unsealed status of the Enforcement Order empowered the judge to revisit it to achieve justice under the CPR overriding objective.
• Provision of the guarantee within hours of judgment was a material change of circumstances warranting reconsideration.
• Relief from sanctions should be granted because the delay in obtaining governmental approvals constituted good reason for late compliance.

Appellee’s Arguments (Company A)

• The principle of finality should prevail once judgment is delivered; reopening should occur only in the most compelling situations.
• The judge failed to apply a preliminary permission stage, contrary to Court of Appeal guidance, and under-valued the importance of finality.
• Company B’s delay in providing the guarantee was unexplained and serious; therefore, relief from sanctions should have been refused.

Table of Precedents Cited

Court's Reasoning and Analysis

The Supreme Court held that a judge possesses discretion to revisit an unsealed order, but that discretion is structured by the CPR overriding objective, which now expressly includes enforcement of compliance with court orders. Finality therefore carries “real weight” and is not merely one neutral factor.

Contrary to the Court of Appeal, the Supreme Court rejected the notion of a mandatory two-stage analysis; requiring such a rigid framework would fetter a flexible discretion and risk unnecessary cost and delay. Instead, the judge must decide whether the factors favouring reopening are sufficiently “strong, weighty or compelling” to overcome the dead-weight of finality.

Applying that approach, the Supreme Court assessed:

• Finality: The Enforcement Order was a final determination of Company A’s claim. This strongly militated against reopening.
• Delay and Compliance: Company B’s failure to arrange the guarantee in good time was serious and unexplained; this counted heavily against granting relief.
• Change of Circumstances: Delivery of the guarantee within hours of judgment was nonetheless a genuine and material change, transforming the guarantee from security into an asset immediately enforceable by Company A—an outcome the court had not intended.
• Relief from Sanctions (Denton): Although the breach was serious and without good reason (stages (i) and (ii)), stage (iii) required considering all circumstances, including the windfall conferred on Company A and the overarching aim of proportionality.

Balancing these factors, the Court found that justice required partially undoing the windfall while still recognising Company B’s culpable delay.

Holding and Implications

Holding: The appeal was allowed in part. The Enforcement Order reinstated by the Court of Appeal is set aside. Company A’s application to enforce the award is adjourned pending the outcome of the foreign proceedings, with liberty to apply if those proceedings stall. Company A may retain the sum already realised under the guarantee; no further enforcement may proceed in the interim.

Implications: The judgment clarifies that:

• The discretion to reopen unsealed orders is governed by the CPR overriding objective, with finality carrying substantial, though not absolute, weight.
• No mandatory two-stage permission/merits test is required; judges may refuse or entertain applications flexibly, provided they accord appropriate weight to finality.
• When late compliance with a court-ordered condition results in a windfall, the court may craft a nuanced remedy that preserves proportionality while upholding the importance of compliance and finality.