Commercial Disputes Weekly – Issue 18031 October 2023

Arbitration – fraud
The Federal Government of Nigeria (“Nigeria”) entered into a ‘Gas Supply and Processing Agreement for Accelerated Gas Development’ (“GSPA”) with Process & Industrial Developments Limited (“P&ID”). Performance of the agreement was unsuccessful and P&ID obtained an arbitration award that Nigeria had committed a repudiatory breach and was liable for damages. Nigeria challenged the award before the Commercial Court in London on the basis of bribery, corruption and perjury, and was successful. The award was held under section 68 of the Arbitration Act 1996 to have been obtained by fraud and in a way that was contrary to public policy. The GSPA was procured on favourable terms to P&ID as a result of bribery of government officials and the bribes were kept hidden from Nigeria. Such bribery continued to be concealed throughout the arbitration by false witness evidence. In addition, P&ID had continued to pay bribes to ensure that Nigeria did not become aware of what had happened in relation to the GSPA. P&ID had also been able to monitor Nigeria’s legal strategy during the arbitration because they had obtained copies of Nigeria’s privileged legal documents. Nigeria had suffered substantial injustice as a result of P&ID’s actions.
The Federal Republic of Nigeria v Process and Industrial Developments Limited [2023] EWHC 2638 (Comm), 23 October 2023

Aviation
When an aircraft lessee suffered disruption to its business resulting from the Covid-19 pandemic, it was able to enter into an agreement with the lessor to defer outstanding rental payments on the proviso that “rental deferral and other agreements of the parties in the deferral letters shall remain valid if and for so long as no event of default occurs that is continuing under the lease”. When the lessee subsequently failed to pay amounts due under the leases, the lessor was entitled to accelerate all amounts and demand repayment of all outstanding sums. The reference to a continuing event of default meant that the default had to be continuing when the lessor exercised its rights under the deferral letters. It did not mean that the deferral was just suspended whilst the default was continuing and revived when the event of default was cured. The lessor had only agreed forbearance in relation to the exercise of its rights under the deferral letters on the basis that the lessee complied strictly with the terms of the leases.
Djinn Issuer Designated Activity Co v Vietjet Aviation Joint Stock Co [2023] EWHC (Comm), 20 October 2023

Jurisdiction
A number of workers in Dyson’s factories in Malaysia sought to bring claims for damages against the Dyson defendants in the English courts, alleging that the defendant companies, who were domiciled in England, knew of the high risk of forced labour in their Malaysian operations. The judge weighed up the factors in favour of both England and Malaysia as the appropriate jurisdiction and concluded that the matter should be heard in Malaysia. The matter involved novel points of Malaysian law and it was better for such legal issues to be decided by Malaysian judges, rather than English judges based on expert evidence as to Malaysian law. The harm occurred in Malaysia and obtaining documents would be more convenient if the matter was held in Malaysia. The judge did not consider that this was an exceptional case in which the absence of litigation funding in the foreign jurisdiction would lead to the non-availability of substantial justice. There was no real risk the claimants would not be able to obtain legal representation or funding. A stay was ordered of the English proceedings.
Limbu and others v Dyson and others [2023] EWHC 2592 (KB), 19 October 2023

Misrepresentation – Guarantees
Dr Alanizi gave personal guarantees in favour of Decisive, the claimant lender in a refinancing arrangement with the defendants. When Decisive sought to enforce the guarantees against Dr Alanizi, he unsuccessfully argued that he had been induced to enter into the guarantees by misrepresentation. The alleged misrepresentations included that Decisive would not seek to and would not need to enforce the guarantees. Dr Alanizi had considerable relevant information available to him, including the full picture behind the refinancing but chose not to look at it. He could not therefore rely on the Misrepresentation Act 1967 or the law of negligence to correct that choice.
Decisive Capital Management SA v Les Geonnais Limited and others [2023] EWHC 2658 (Ch), 25 October 2023

Should you wish to discuss any of these cases in further detail, please speak with a member of our London dispute resolution team below, or your regular contact at Watson Farley & Williams: