Court of Appeal highlights leave to appeal process where challenges to arbitration awards are involved

Seamus Ronald Andrew -v- Federal Republic of Nigeria [2025] EWCA Civ 715

In October 2023, the Commercial Court overturned a number of arbitration awards dated from October 2017 onwards that awarded Process & Industrial Developments Ltd (P & ID) a total of about US$11 billion in damages against the Federal Republic of Nigeria (Nigeria) in relation to the breach of a Gas Supply and Processing Agreement (GPSA).

Among other things, the Commercial Court upheld FRN’s challenges to the awards on the grounds that they were procured by fraud and that the GPSA and the arbitral proceedings were tainted by bribery, corruption and perjury.

Mr Andrew acted as the lawyer for P & ID in the arbitration and, after the arbitration had concluded, he became a director of P & ID when his company acquired a stake in it. He gave written and oral evidence at the trial but was not a party to the proceedings. He subsequently sought to appeal the judgment because the Court had made adverse findings against him. Among other things, he alleged that his rights under the ECHR had been breached.

The Court of Appeal held that it did not have jurisdiction to entertain the application for leave to appeal, because Mr Andrew had not obtained leave to appeal from the Commercial Court.

Among other things, the decision is a timely reminder that where an arbitration award has been challenged and the challenge dealt with by a court at first instance (usually the High Court) it is the first instance court that must give permission to appeal. If it does not, then that is the end of the matter. Here, therefore, the Court of Appeal did not have jurisdiction to grant leave to appeal because Mr Andrew had not first made a formal application to the Commercial Court for permission to appeal.

The decision also highlights the importance in such cases of applying for leave to appeal (whether from the lower court or from the Court of Appeal) within the time permitted because a failure to do so, and a failure to obtain an extension of time to make the application, might result in the applicant being shut out of any opportunity to appeal.

The Commercial Court decision

The Commercial Court judgment is lengthy and has generated much industry and academic comment because it highlighted a number of concerns regarding the arbitral process, particularly where such large amounts are involved, and a state is one of the parties.

In particular, the Court called for debate and reflection within the international arbitral community with regard to four issues:

1. The importance of proper professional standards and ethics in the drafting of major commercial contracts involving a state, given the potential exposure of states and public funds.

2. Robust document production and related ethical obligations with regard to disclosure in arbitral proceedings. The Court commented that this was a difficult issue for tribunals because there is no standardised set of ethical obligations applicable to counsel from different jurisdictions. There exist important “soft” guidelines, such as those published by the International Bar Association, but arbitrators need the means to be able to enforce them so that they have real effect.

3. Whether and to what extent a tribunal should intervene where one party has inadequate legal representation. A tribunal has to achieve an appropriate balance between ensuring a fair fight and not making a party’s case for them.

4. The importance of respecting privacy in confidentiality, whilst considering whether there is a case to be made for more transparency to allow scrutiny of the arbitral process as a whole. The Court posed the question of whether greater transparency in arbitrations involving a state or state-owned entities is part of the answer.

These are important issues and merit their own article. However, for the purposes of this article, we focus only on the issues related to Mr Andrew’s appeal.

The key allegation against Mr Andrew was that he and others had received leaked internal FRN documents and had used them improperly and that Mr Andrew, as a legal professional, had understood that those documents were privileged, and that P & ID were not entitled to them. The Court found that the privileged documents had been obtained from corrupt FRN officials through bribery. It also highlighted that Mr Andrew stood to gain financially and the Court considered that his failure to return the documents was motivated by greed. The Court further stated that Mr Andrew had given untrue evidence.

The Court indicated it would be referring a copy of its judgment to the Solicitors Regulation Authority and the Bar Standards Board so that they could consider the professional consequences for Mr Andrew.

Leave to appeal

In December 2023, the Commercial Court refused P & ID leave to appeal and also declined to remit the final award to the tribunal for reconsideration. In the Court’s view, the serious irregularities affecting the arbitral process went to the root of the award and there was no real prospect of justice being done by the tribunal upon reconsideration.

Prior to that consequentials hearing, Mr Andrew’s legal representatives had provided the Court with draft grounds of appeal and a skeleton argument in support of Mr Andrew’s application for permission to appeal against the findings in the judgment that he had breached his professional duties by failing to return FRN’s internal documents. However, no written formal application for leave to appeal was made prior to the consequentials hearing and the Commercial Court did not therefore deal with it.

Subsequently, Mr Andrew’s lawyer informed the Court that Mr Andrew would not be making his application to the Commercial Court judge but would instead seek leave to appeal directly from the Court of Appeal. The explanation given was that as Mr Andrew’s application was not considered and determined at the consequentials hearing, and no extension of time was granted, the lower court was now functus officio and no longer had jurisdiction to determine an application for permission to appeal.

Grounds of appeal

In essence, Mr Andrew complained that he had not been given the opportunity to respond to the allegations against him of professional misconduct and being somehow implicated in the wider allegations of bribery and corruption. He complained further that the Court had not given adequate reasons for its findings against him and his rights, including the right to a fair trial, under the ECHR had been breached.

The Court of Appeal decision

First, the Court of Appeal noted that Mr Andrew had not served his appellant’s notice and grounds of appeal within 21 days of the judgment as required by the Civil Procedure Rules. He, therefore, required an extension of time but had failed to request one from the judge. The suggestion after the consequentials hearing that the judge was functus officio was misconceived because the consequentials hearing was an adjournment of the hearing at which the judgment was handed down and the judge retained jurisdiction over the matter until the consequentials judgment was handed down and the judge had made the relevant order.

Additionally, Mr Andrew did not promptly issue his appellant’s notice and grounds of appeal in the Court of Appeal but waited until the outcome of the consequentials hearing. No excuse or explanation was provided for the additional delay. In the circumstances of this case, the Court of Appeal was not prepared to grant relief from sanctions and the application for permission to appeal was, therefore, out of time and should be refused on that ground alone.

Secondly, the Court of Appeal did not have jurisdiction to entertain the proposed appeal because Mr Andrew had failed to obtain permission to appeal the judge’s decision from the judge himself, as required by s.68(4) of the Arbitration Act 1996. The Court of Appeal dismissed the argument that this requirement did not apply to a non-party, such as Mr Andrew. A non-party could not be in any better position than a party to the proceedings.

The Court also rejected the submission that s.68(4) should be read down because Mr Andrew’s rights under the ECHR had been breached. In the Court of Appeal’s view, Mr Andrew’s rights under the ECHR had either not been breached or, if they had been breached, there was no question of s.68(4) being read down, as proposed. Given that Mr Andrew did not have permission to appeal from the judge under that sub-section, the position was that the Court of Appeal did not have jurisdiction to entertain an appeal by Mr Andrew.

In any event, the Court of Appeal thought that none of the grounds of appeal were arguable. Even if any of them were arguable, the Court of Appeal should refuse permission to appeal on discretionary grounds. Nothing should be done that might affect the finality of the judgment obtained by FRN. If Mr Andrew was successful with regard to the judge’s findings about his misconduct, this would not affect the remainder of the judgment so far as P & ID was concerned. However, the Court of Appeal did not want to give P & ID any excuse to try and reopen the judgment. The findings against Mr Andrew were an integral part of the judge’s decision to set aside the award under s.68 for serious irregularities and FRN was entitled to the finality of the judgment.

Furthermore, Mr Andrew still had the option of challenging the judge’s reasoning in the event that disciplinary proceedings were brought against him in the Solicitors’ Disciplinary Tribunal.

Comment

The s.68(4) requirement reflects the policy underlying the New York Convention, namely the importance of finality of arbitration awards, which the English courts strive to uphold. The Court of Appeal clearly wished to discourage satellite litigation such as the present proposed appeal entailed, and it wished to avoid any subsequent opportunistic actions by P & ID.