Process & Industrial Developments Ltd v Nigeria

<center><span class="news-text_italic-underline">Court: Court of Appeal (Civil Division)</span></center>

<center><span class="news-text_italic-underline">Judgment Date: 12 July 2024</span></center>

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Summary

The Appellant (Process & Industrial Developments) challenged a decision requiring payment of costs in sterling following proceedings under section 68 of the Arbitration Act 1996. The appeal considered whether this challenge required permission under section 68 and whether the judge correctly ordered costs to be paid in sterling.

Facts: The Respondent (Federal Republic of Nigeria) had successfully applied under section 68 of the Arbitration Act 1996 to set aside two previous arbitration awards in favour of the Appellant. The judge ordered the Appellant to cover Nigeria's legal costs and considered the appropriate currency for this payment. Nigeria argued, according to the indemnity principle, costs should be in sterling because it had engaged English solicitors, was invoiced in sterling, and paid those invoices in sterling. The Appellant contended Nigeria’s real loss was in naira, as Nigeria would have converted naira from its central government funds to pay in sterling. The judge decided in favour of sterling and refused the Appellant's permission to appeal.

Issues

1. Does an appeal concerning the currency of a costs order require permission under section 68(4) of the Arbitration Act 1996?
2. Did the judge correctly order for costs to be paid in sterling?

Held

Appeal dismissed.

1. <span class="news-text_medium">Jurisdiction:</span></br></br>
   
   • The court determined the restriction in section 68(4) did not apply to appeals on the currency of a costs order. This interpretation was guided by principles established in cases such as National Iranian Oil Co v Crescent Petroleum Co International Ltd [2023] EWCA Civ 826 and Czech Republic v Diag Human SE [2023] EWCA Civ 1518.
   • The court reasoned section 68(4) was designed to limit appeals capable of delaying or complicating arbitration proceedings. A decision on the currency of a costs order, being a relatively narrow issue, did not pose such risks. Further, the decision on currency was made under the Senior Courts Act 1981 rather than the Arbitration Act 1996 and was not part of the process of resolving the section 68 challenge.
2. <span class="news-text_medium">Currency of Costs Order:</span></br></br>
   
   • The court upheld the judge’s decision to award costs in sterling, viewing the costs order as a statutory indemnity against the liability incurred by Nigeria to its own solicitors. The court upheld Nigeria’s argument that since Nigeria was invoiced and paid in sterling, the costs should be ordered in sterling. This decision followed the principles established in <span class="news-text_italic-underline">Edwin Coe LLP v Popat [2013] EWHC 4524 (Ch)</span>.

Conclusion

The court confirmed the decision to order costs in sterling was correct, and the appeal was properly dismissed. The jurisdictional challenge under section 68(4) was not applicable and the judge's order reflected the appropriate indemnity principle relating to the costs incurred.