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Friday, June 14, 2024 | Back issues
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Nigerian Effort to Quash Judgment Action Fails

(CN) - Nigeria cannot block a motion to compel its payment of a nearly $12 million arbitration award while it pursues other avenues of appeal, a federal judge ruled.

In 1999, Enron Nigeria Power Holding Ltd. entered into an agreement guaranteed by the Republic to supply three barge-mounted electricity generating units and later build a gas-fired power plant in the country.

After the venture fizzled, U.S. District Judge Christopher Cooper wrote, Enron Nigeria and the Republic submitted their dispute over compensation to the International Court of Arbitration as required under contract.

The court is part the Internal Chamber of Commerce and its primary function is to resolve international business disputes.

The arbitrators eventually awarded Enron Nigeria $11.2 million in damages and $870,000 in legal costs and expenses.

But the Republic balked at paying the award, which caused Enron Nigeria to file a motion to compel its payment.

The Republic prevailed in quashing that motion - mainly on the grounds that Enron Nigeria failed to properly effectuate service -- but Judge Cooper gave the energy company an additional 120 days to effect service by alternative means.

Attorneys for the Republic immediately filed an appeal of Cooper's order with the D.C. Circuit. Cooper notes in his opinion that the nation did this without getting the permission of the court.

In its appeal, "Nigeria argues it did not require permission because the Court in effect rendered a final judgment by noting in its Memorandum and Order that Nigeria 'appear[ed] to be using this action to re-litigate and delay the payment of claims already resolved by the agreed upon arbitration procedure,'" Cooper wrote. "Nigeria now seeks a stay of these proceedings pending the outcome of its appeal."

But from the beginning of his analysis, it's clear that Judge Cooper took a dim view of the Republic's argument.

"In this case, the Court explicitly reserved judgment on the merits of Nigeria's motion to dismiss. ..." he wrote. "The Court never stated in writing 'that an immediate appeal from the order may materially advance the ultimate termination of the litigation,' and neither party asked the Court to do so."

"Nigeria alleges that the Court's reasoning that Nigeria would not be prejudiced because it 'appear[ed] to be using this action to re-litigate and delay the payment of claims already resolved by the agreed upon arbitration procedure' automatically converted the decision into a final, appealable order," he continued.

Cooper responded by saying the court "explicitly" did not do this.

"The Court explicitly reserved judgment on the merits pending ENPH effecting proper service, making it clear that its order was not a final ruling," he wrote.

The judge also rejected the Republic's contention that it would suffer irreparable harm if a stay were not granted.

"Awaiting proper service for four months - during which nothing is required of or will happen to Nigeria - in a dispute that is over a decade old is hardly the type of 'certain and great' injury that constitutes irreparable harm," Cooper wrote.

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