Anti-Suit Judgment in $2 billion Financing Dispute

6 April, 2022

In a reserved judgment handed down on Friday 1 April 2022 in Africa Finance Corporation & others v Aiteo Eastern E & P Company Limited [2022] EWHC 768 (Comm), Sir Nigel Teare sitting as a Judge of the Commercial Court upheld claims for final anti-suit injunctive relief and dismissed the defendant’s applications to challenge jurisdiction and set aside an interim anti-suit injunction granted by Cockerill J in December 2020.

The underlying dispute concerns two financing agreements for the total sum of about $2 billion between, respectively, eight ‘onshore’ lenders and one ‘offshore’ lender (together, the “lenders”) and the defendant (the “borrower”) relating to purchase of an interest in oil fields and facilities in Nigeria.  Both facilities contained arbitration agreements in favour of London-seated ICC arbitration.  Following a formal demand letter from the lenders in October 2019, the borrower instituted proceedings in the Federal High Court (Abuja Judicial Division) (the “Nigerian proceedings”) and obtained ex parte interim injunctive relief.  The lenders, save for the first claimant (“AFC”), appealed against such interim injunctive relief in Nigeria in mid-November 2019 on the basis of the relevant arbitration agreements, resulting in the transfer of proceedings to the Nigerian Court of Appeal.  AFC disputed the Nigerian courts’ jurisdiction on the basis of its immunity from jurisdiction.  The appeal and application remained pending in Nigeria.

The lenders and borrower then engaged in restructuring negotiations for thirteen months.  The lenders commenced arbitration proceedings under both facility agreements and sought anti-suit and declaratory relief from the English High Court on 11 December 2020.  They sought and obtained interim negative anti-suit relief on a without notice basis on 14 December 2020.  The borrower challenged jurisdiction and applied to set aside the interim anti-suit order.  Both applications were rolled into the hearing of final relief on the lenders’ claim.  The combined hearing took place over three days on 22-24 March 2022 and included cross-examination of Nigerian law expert witnesses.

In summary, the Judge held as follows:

  1. The borrower’s commencement and pursuit of the Nigerian proceedings was a breach of both arbitration agreements from the outset (onshore lenders) and from a reasonable time after the offshore lender’s election to arbitrate through its notice of appeal, respectively; and such breaches subsisted at commencement of these anti-suit proceedings because the relevant arbitration rights were not waived or compromised by any of the lenders during the intervening period of 13 months through their chosen methods of challenging (the exercise of) jurisdiction in the Nigerian court system: see paragraphs [46] to [65].
  2. There are no strong reasons sufficient to justify refusal of anti-suit relief to enforce the arbitration agreements in light of (1) above.  In particular, the delay in seeking such relief was justified in circumstances where (i) the lenders were engaged in complex restructuring negotiations with the borrower and did not wish to commence arbitration proceedings before concluding that they had no realistic option to obtain a withdrawal of the Nigerian proceedings through negotiation; and (ii) there was no substantive progress in the Nigerian proceedings during such period of delay: see paragraphs [66] to [99].
  3. There was no basis for setting aside the interim anti-suit order on the borrower’s alleged grounds of unfair presentation or absence of justification for proceeding without notice in mid-December 2020: see paragraphs [100] to [125].

A link to the judgment can be found here.

Ben Juratowitch QC (leading Belinda McRae at Twenty Essex) acted for the claimants/lenders, instructed by Christopher Pugh, Eid-Daniel Jadon and Guy MacInnes-Manby at Freshfields Bruckhaus Deringer LLP.

Stephen Houseman QC and Tom Ford acted for the defendant/borrower, co-instructed by Daniel Wilmot at Stewarts Law LLP and Cherie Blair QC at Omnia Strategy LLP.