AIC Ltd v Federal Airports Authority of Nigeria [2022] UKSC 16 (15 June 2022)
Citation:AIC Ltd v Federal Airports Authority of Nigeria [2022] UKSC 16 (15 June 2022).
Subjects invoked: 12. 'Procedure'. 1. 'Nation'. 43. 'Insolvency'.
Rule of thumb:Has the Judge in a case made a clear mistake? Missed a Court deadline and the Judge has made a decision? Can you still lodge things late and get the Judge to potentially change their mind? Yes, a Judge’s decision can still get overturned. This case affirmed/expanded the grounds for when a Judge’s decision can get overturned. There are 2 fundamental grounds: (1) If there is a good reason for the lateness; and (2) despite there being no good reason for the lateness, if this would lead to a clear and significant error being made with the Judgment, things can still be done late, and a decision can still be overturned. FAAN were able to rely on the second ground - FAAN were a bit late in providing $24m deposit, so the Judge ordered them to pay the full $48m, but when FAAN paid this $24m a bit late, despite having no good reason for this lateness except human clumsiness, FAAN were still able to overturn the decision because it was such a large amount of money and it would have led to a Judgment with a clear and significant error in it.
Background facts:
This case invoked the subject of procedure. It involved the ‘finality’ principle being pitched against the ‘interest of justice’ principle in litigation when a Judge realises that they have made a wrong decision and seeks to overturn it.
The material facts of this case were that the Federal Airports Authority Nigeria (FAAN) were being sued for $48m in the Nigerian Courts by AIC Ltd. AIC were successful in this action in the first instance in the Nigerian lower Court. However, FAAN were continuing to appeal this matter in the upper Courts in Nigeria. FAAN had a bank account in the UK, and AIC were suing to freeze the $48m money in FAAN’s UK account so that if AIC’s arguments were successfully upheld in the Nigerian appeal Courts they could obtain this money smoothly and efficiently – there were 2 simultaneous actions going on at the same time in other words, one in Nigeria to debate the merits and another insolvency action in the UK. However, FAAN were told by the UK Courts that they had to provide $24m before a certain deadline, with the parties then waiting to find out the final decision from the Nigerian Appeal Courts, but FAAN did not provide this. The Judge therefore made a decision at that time to order FAAN to provide the $48m. FAAN provided the $24m shortly after the deadline, and therefore sought to have the decision for the full $48m overturned. The Judge realised that the past decision made was wrong and sought to change this – it was right for the $24m only to be provided to respect the Nigerian Appeal Courts’ right to decide the matter.
AIC sought to stop the Judge doing this and relied upon the ‘Finality’ principle in making these arguments. AIC argued that there was a 2 part test for deciding whether to overturn a past decision: 1) whether there was a good reason for the lateness, and 2) to then consider the merits of the arguments. AIC argued that FAAN had provided no good reason for why they were late, meaning part 1 of the test to overturn a past decision was not passed, and therefore the finality principle had to apply. However, FAAN argued that the test for a Judge changing their mind should be expanded. They argued that it was just human imperfection and human clumsiness that led the deadline to be missed, but as the amount of money involved was so significant then the decision should still be changed as it would lead to there being a UK Court Judgment with a clear & significant error in it. They essentially sought for the test for overturning a wrong decision to be expanded..
Judgment:
The Court upheld the arguments of FAAN and the test of when Judgments should be overturned was expanded in this case. The Court affirmed that the finality principle is the starting point, and a Judge should only overturn this in exceptional circumstances. The Court affirmed that in addition to the ground of their being a legitimate reason for the lateness, another ground will be if the Judge realises that a clear and significant error has been made in their Judgment with the ‘justice of the matter’ determining that it should be changed – the Court affirmed essentially that a Judge making a clear and significant error in a Judgment is grounds for doing this. The Court did affirm that if the matter was ‘sealed’, and the time-limit for appeal, had run out then the matter could not be overturned.
Ratio-decidendi:
'63. Even though we have disagreed with the Judge’s underrating of the finality factor and her view that there had been good reason for the delay, we consider that her trenchant view that justice demanded that the windfall thereby conferred upon AIC be undone commands real respect. She had presided over all the first instance hearings of AIC’s enforcement application apart from the original without notice order, and was well placed to assess the justice of the matter. AIC was, by the end of 6 December, in substance in a better position than if its application to enforce the Award had simply been unopposed. 64. We have not found the answer to the question whether to set aside the Enforcement order nearly as clear cut as it seems to have appeared to the Judge. The combined effect of the finality principle and FAAN’s culpable delay in providing the Guarantee add up to a very serious obstacle in the way of doing so. But we are persuaded on balance that AIC should not retain the right to enforce the Award, pending the outcome of the Nigerian proceedings, beyond the significant enforcement which it has already lawfully achieved by calling on the Guarantee. The fact that this outcome is less favourable to FAAN than the order that would have applied if the guarantee had been provided on time is an appropriate reflection of FAAN’s failure to comply with the deadline imposed by the court by its orders. It is a result which serves the Overriding Objective in its modern form. 65. Accordingly we would allow FAAN’s appeal to that extent'. Lord Briggs
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.