There are no rules or procedures for identifying the asset position of another party in Nigeria, nor for asset disclosure, prior to or at the commencement of an action.
However, in the pendency of a suit, a party can obtain freezing orders to restrain a party from dissipating an asset, dealing with it or removing it from the jurisdiction of the court, having identified such asset. Freezing orders are subject to the discretionary powers of the court, and are usually not granted unless a party shows sufficient reasons that it is necessary to preserve an asset. The principles guiding the decision of a court to grant freezing orders include that:
Post-judgment, a successful party to a suit can initiate garnishee proceedings for the enforcement of monetary judgments against a judgment debtor, having identified third parties in custody of a judgment debtor’s money (garnishees). In such a case, a court may make an order nisi (initial order) directing garnishees (eg, banks) to disclose any sum of money in their custody that belongs to a judgment debtor, and to show cause why they should not be ordered to pay such sum to the judgment creditor. Upon disclosure by the garnishees, the order nisi is made absolute against the garnishees, mandating them to pay the judgment debtor’s funds disclosed as being in their custody to the judgment creditor.
Other options available to obtain information about another party’s asset include a search at the Land Registry of the State where the party’s immovable property has been identified. Such a search would typically disclose information regarding registered ownership, assignment of interest, encumbrances and discharge of any encumbrance on a property. A party can also conduct a search at the Corporate Affairs Commission (the entity established to regulate the formation and management of companies in Nigeria) to ascertain the shareholding of a party in a company registered in Nigeria, including any charges, mortgages or liens on a company’s assets.
A “judgment” is a final decision of the court resolving a dispute between parties and determining their rights and obligations. However, a court may make interim and interlocutory orders before judgment is delivered in a suit. Interim and interlocutory orders are provisional in nature and are usually in the form of injunctions restraining a party from doing an act or mandating a party to act in a particular way.
Interim orders are expected to last for seven or 14 days, depending on the applicable court rules, or as directed by a court pending the hearing of an application that seeks to sustain the injunction until the determination of the suit or the occurrence of a particular event. Interlocutory orders, as they are called, usually take effect until judgment is delivered in a suit.
By nature, judgments could be one or more of the following.
The modes of enforcing domestic judgments in Nigeria, including procedures, are outlined below.
Writ of Attachment and Sale (Writ of Fieri Facias)
A judgment sum becomes immediately due and payable upon a pronouncement in a judgment.
A writ of fieri facias (fi. fa.) is issued for execution against the goods, chattels and immovable property of the judgment debtor for the recovery of any sum of money payable under a judgment of a court in case of default or failure of payment. The writ is obtained by completing the praecipe form at the registry of the court.
The writ empowers the sheriff of the court to seize and sell the judgment debtor’s property within the jurisdiction to satisfy the judgment debt (except wearing apparel and bedding of the judgment debtor or their family and the tools and implements of their trade, to the value of NGN10). The proceeds from the sale are used to cover sale expenses and offset the judgment debt, with any remaining balance being given to the judgment debtor.
In cases where the court ordered the judgment sum to be paid in instalments, the writ can only be issued after the default in payment of some instalment, and execution may be for the remaining sum and costs then unpaid, or for a part of it as the court may order (either in the judgment or subsequently).
Also, unless they are perishable in nature or the judgment debtor requests so in writing, the seized property cannot be sold until the expiration of a period of at least five days from the date of seizure.
Garnishee Proceedings
This is a method of enforcing a monetary judgment by recovery through third parties (garnishees) who are in custody of the judgment debtor’s funds or indebted to the judgment debtor. The judgment creditor steps into the position of the judgment debtor to collect such funds. In most cases, the garnishees are bankers of the judgment debtor.
The judgment debtor files an application ex parte (without notice to the judgment debtor and the garnishees) and, upon being satisfied that the case is deserving, the court would make an order nisi (initial order) directing the garnishees to disclose the amount standing to the credit of the judgment debtor in their custody and show cause why such sums should not be attached and paid to the judgment creditor in satisfaction of the judgment. The order nisi is served on the garnishees, and each garnishee is expected to file affidavits in court disclosing the judgment debtor’s monies in its custody, if any.
Upon disclosure by the garnishees, the order nisi is made absolute against the garnishees, mandating them to pay the judgment debtor’s funds disclosed as being in their custody to the judgment creditor, in satisfaction of the judgment sum.
Bankruptcy/Insolvency Proceedings
In this mode of enforcement, where a judgment debtor defaults in payment of the judgment sum, the judgment creditor is at liberty to commence an action against the judgment debtor under bankruptcy proceedings in the case of an individual debtor or winding-up proceedings in the case of a company. However, it must be shown that the judgment debtor is unable to pay its debt in all instances.
Generally, it involves filing a petition and providing evidence of bankruptcy or insolvency. Once the judgment debtor is declared bankrupt or insolvent, their assets are liquidated and the proceeds are distributed among creditors according to their priorities.
Writ of Possession
This is issued for the recovery of premises where the judgment of the court is for the recovery of land, or for the delivery of possession of land, in an action other than an action between landlord and tenant. An application for a writ of possession is made by filing a praecipe form.
Writ of Sequestration
This is issued upon application to a judge against the property of a person who has had an order or warrant of arrest, commitment or imprisonment made against them but cannot be found, or where a person is taken and detained in custody without obeying the judgment of a court. An application for a writ of sequestration is made to a judge in the prescribed form.
Writ of Delivery
A writ of delivery is issued for the enforcement of a judgment for the delivery of goods. An application for a writ of delivery is made by filing a praecipe form.
Judgment Summons
This is issued by the court upon application of a judgment creditor where a judgment debtor defaults on payment of a judgment sum or any instalment. The judgment debtor is summoned to appear before the court for examination on oath as to their means. An investigation into the judgment debtor’s means is conducted, and the court may make an interim order for the protection of any property applicable or available in discharge of the judgment debt. Upon the conclusion of investigations, the court may make one or more of the following orders:
Compliance with a judgment is expected without the need for a demand or enforcement, as it becomes effective upon delivery unless the court specifies otherwise.
Enforcing a judgment in Nigeria entails costs and time, which vary depending on the specific circumstances of each case. The duration of the enforcement process is influenced by several factors, such as:
In terms of costs, there are no fixed fees for enforcing a judgment. Typically, the costs include filing fees and expenses related to executing the judgment.
For monetary judgments, garnishee proceedings are often the most efficient option. This procedure allows the judgment creditor to recover the judgment sum by attaching the judgment debtor’s funds in the hands of a third party (the garnishee).
Another effective option – particularly when the judgment creditor possesses knowledge or certainty regarding the assets of the judgment debtor within the court’s jurisdiction – is the use of a writ of fi. fa., which involves seizing and selling the judgment debtor’s properties and chattels to satisfy the judgment debt using the proceeds from the sale.
When a writ of fi. fa. is issued, it maintains a life span of one year from the day it was issued. Where the property attached is movable, it cannot be sold until five days after the day it was seized from the judgment debtor. However, such movable goods may be sold before the five days expire if they are of a perishable nature or if the judgment debtor makes a request to the court by written application.
For the enforcement of judgments against companies, a petition for winding-up is often effective where the company is unable to pay its debt.
Overall, the choice of the most efficient enforcement option depends on factors such as the type of judgment, the availability of assets, and the specific circumstances of the case.
There are no specific post-judgment procedures for determining what assets the defendant holds and/or where they are located. However, the judgment debtor’s assets may be discovered through searches conducted at public asset registries like the Corporate Affairs Commission, the lands registries of the various states, the Federal Lands Registry and the National Collateral Registry.
In certain circumstances, the High Courts can also grant orders like freezing orders, asset disclosure orders or such other orders by which a party can lawfully identify another party’s assets in Nigeria. The power of the courts to do this is derived from Section 6 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
The courts may also grant garnishee orders attaching funds or debts due from a third party to the judgment debtor and the use of the amount of that debt in liquidating the judgment debt. In granting garnishee orders, the courts direct the third party to disclose the amount standing to the credit of the judgment debtor in such third party’s custody and control.
Finally, a party can find out what assets the judgment debtor owns through the evidence of the judgment debtor during trial (evidence on oath).
An unsuccessful party may challenge the enforcement of domestic judgments by:
Application to the Trial Court to Set Aside its Judgment
An application to set aside a judgment filed at the trial court may be made on the following grounds:
In granting such application, the court would generally consider:
Appealing the Judgment and Obtaining a Stay of Execution
On appeal, a judgment debtor may apply for a stay of execution of the judgment being appealed – ie, an order suspending the execution/enforcement of the judgment during the period of the appeal. In granting such an application, the court would generally consider special or exceptional factors, including:
Judgments that are unenforceable in Nigeria include the following:
On appeal, a judgment debtor may apply for and obtain an order of stay of execution of the judgment being appealed pending the determination of the appeal. A stay of execution is an order of the court suspending the execution of a judgment or other court order. Once a stay of execution is granted, the judgment becomes unenforceable until the appeal is determined. An appeal does not on its own operate as a stay of execution, hence the requirement for an application for stay of execution.
There is no central register of all judgments delivered in Nigerian courts. However, the registrar or any other proper officer of a court is required to keep a book called “The Nigeria Register of Judgment”.
Where a judgment delivered in one state is to be enforced in another state in Nigeria, a judgment creditor must apply to the registrar of the court that delivered the judgment for a certificate of judgment to be issued. The judgment creditor is then required to take said certificate to the registrar of any court of similar jurisdiction in the state where the judgment is to be enforced, where the registrar of that court would record the following particulars in The Nigeria Register of Judgment:
From the date of registration, the certificate becomes a record of the court in which it is registered and shall have the same force and effect in all respects as a judgment of that court, such that proceedings may be taken upon the certificate as if the judgment had been a judgment of that court.
The registrar of the court where the judgment is to be enforced is required to give written notification under the seal of the court, to the registrar or another proper officer of the court, where the judgment was given when:
Once notified of the satisfaction of the judgment, the registrar of the court where the judgment was given is required to register the satisfaction and notify the registrar of the court where a certificate of the judgment has been registered of said satisfaction. Upon such notification, that registrar must also register the satisfaction of the judgment on the certificate.
Nigerian laws are silent on how and when the name of a judgment debtor can be removed from the register after the satisfaction of a judgment sum. However, as a matter of evidence, such satisfaction would be recognised by courts upon proof thereof.
Nigeria is not a signatory or party to any treaty or convention on the recognition and enforcement of foreign judgments; therefore, no international treaties/conventions are relevant in this regard.
For the enforcement of a foreign judgment in Nigeria, the following laws are relevant:
The 2004 Act stipulates that a foreign judgment must first be registered in Nigeria in order to be enforced. The judgment must be final and conclusive (Section 3 (3) of the 200 Act states that a judgment shall be deemed to be final and conclusive notwithstanding that an appeal may be pending against it, or that it may still be subject to appeal, in the courts of the country of the original court). The judgment must also be obtained from a court that has the jurisdiction to adjudicate over the matter. A foreign judgment that does not conform with the requirements of the 2004 Act cannot be registered and enforced in Nigeria.
The 2004 Act empowers the Nigerian Minister of Justice (the Minister) to make an order extending its application to any foreign country with substantial reciprocity of treatment on enforcement of judgments made by a superior court in Nigeria. A superior court is defined in the Act as the High Court of a State or the Federal Capital Territory, Abuja, or the Federal High Court. The 2004 Act applies to countries with which the Minister has made such an order of extension.
In Macaulay v. R.Z.B., Austria (2003) 18 NWLR (Pt. 852) 282, the Supreme Court of Nigeria held that the Ordinance still applies to the United Kingdom and to dominions to which it was extended by proclamation under Section 5 of the Ordinance before the coming into force of the 2004 Act, until the Minister makes an order under Section 3 of the 2004 Act extending the Act’s application to the United Kingdom or other dominions to which the Ordinance earlier applied.
Furthermore, the 2004 Act allows the registration of foreign judgments prior to the commencement of an order of the Minister extending the applicability of the 2004 Act to a country, within 12 months from the date of the judgment or within any longer period permitted by a superior court in Nigeria.
The Minister is yet to make an order of extension to other countries outside of the commonwealth as provided under the 2004 Act. Thus, the current position under both the Ordinance and the 2004 Act is that, a foreign judgment is registrable within 12 months of the date of judgment subject to any extension by a superior court of Nigeria.
In Nigeria, the approach to the enforcement of foreign judgments does not vary by the type of judgment. By the provision of the 2004 Act and the Ordinance, the approach is the same: every foreign judgment must first be registered in Nigeria before it can be enforced in Nigeria. It is important to state that the registration should be done in the court that has the jurisdiction to entertain the subject matter of the judgment. Therefore, it should be registered in the State High Court, the Federal High Court or the High Court of the Federal Capital Territory in Nigeria as applicable.
The categories of judgment that will not be registered in Nigeria are stated in the Ordinance and the 2004 Act.
Under the Ordinance, a foreign judgment is not enforceable if:
Under the 2004 Act, a foreign judgment is not enforceable if:
To register a foreign judgment in Nigeria, the judgment creditor files a motion ex parte (an application without notice to the other party, thus, the judgment debtor may not be served) seeking leave of the court (the State High Court or Federal High Court) to register the judgment. The application could also be by a motion on notice. Where the application is made ex parte, the judge has the discretion to direct that the judgment debtor be put on notice.
The court can enforce a successfully registered judgment in compliance with the provisions of the Sheriffs and Civil Processes Act in the same way as a domestic judgment. The process of such enforcement includes the following.
Garnishee Proceedings
This process entails attaching any money that belongs to the judgment debtor but is in the custody of a third person, known as the “garnishee”. The judgment creditor files an application for the grant of garnishee order nisi. The application filed by the judgment creditor is served on the garnishees, along with the enrolment of the order nisi of the court to show cause why the money to the credit of the judgment debtor should not be attached and paid to the judgment creditor. Where the procedure is successful, the court will make the order nisi absolute for the satisfaction of the foreign judgment.
Writ of Fi. Fa.
A writ of fi. fa. is issued for execution against the goods, chattels and immovable property of the judgment debtor for the recovery of any sum of money payable under a judgment of a court in the case of default or failure of payment. The writ is obtained by completing the praecipe form at the registry of the court. This is applicable where the amount obtained from the garnishee proceedings is insufficient to pay off the judgment sum.
The costs involved in the enforcement of a foreign judgment include the professional fees of the legal practitioner who will represent the judgment creditor, the monetary sum of the foreign judgment that is expected to be registered and the statutory cost of the court where the foreign judgment will be registered. Under the provisions of the Sheriff and Civil Process Act, the costs of the garnishee proceedings, together with the debt owed, are directed by statute to be paid by the garnishee within a time prescribed by the court.
When a writ of fi. fa. is issued, it maintains a lifespan of one year from the day it was issued. Where the property attached is movable, it cannot be sold until five days after the day it was seized from the judgment debtor. However, movable goods may be sold before the five days expire if they are of a perishable nature or if the judgment debtor makes a request to the court by written application.
In general, a writ of fi. fa. and an order for garnishee proceedings are most appropriate where the foreign judgment to be enforced is a monetary sum.
It usually takes between six months and one year to enforce a foreign judgment. Under the provisions of the 2004 Act, a foreign judgment can be enforced at any time within six years from the date it was delivered. This estimated period can extend where enforcement is being challenged.
The following legislation governs the registration and enforcement of foreign judgments in Nigeria:
The Ordinance
The registration and enforcement of a foreign judgment may be challenged under the Ordinance on the following grounds:
The 2004 Act
Under the 2004 Act, a judgment debtor may challenge the registration and enforcement of a foreign judgment in Nigeria on the grounds that:
The legal issues relating to enforcement of an arbitral award are as follows.
Arbitrability of the Subject Matter
The arbitrability of the subject matter of the dispute is one of the key considerations by the courts in Nigeria in the enforcement of arbitral awards.
Invalidity of the Arbitration Agreement
Where the arbitration agreement is not valid under the law indicated by the parties in their contract or for whatever reason under the law of the country where the award was made, the arbitral award will not be enforceable.
Tax Disputes
Tax disputes are considered not arbitrable in Nigeria. In Esso Exploration and Production (Nig.) Ltd v FIRS [2017] LPELR-51618 (CA), the Court of Appeal decided that tax disputes are not arbitrable in Nigeria because tax is a matter regulated by statute and is a matter of public interest that cannot be settled by arbitration.
Public Policy Considerations
Regard would also be had to whether the contract sought to be enforced is contrary to public policy. For instance, if the subject matter of the contract is illegal, the Nigerian courts would refuse to enforce the award on the basis that it is contrary to the public policy of Nigeria to enforce illegal contracts.
Time Limitation
Section 8(1)(d) of the Limitation Law of Lagos State (with similar provisions in the Limitation Laws of other states in Nigeria) provides that every application to enforce an arbitral award must be brought within six years from the date the award was given. The implication is that a party cannot successfully bring an action for the enforcement of an arbitral award outside the statutory six-year limit.
Judicial Interference: Merit Reviews of Arbitral Awards and Delays
Nigeria recently enacted the Arbitration and Mediation Act, 2023 (AMA), repealing the Arbitration and Conciliation Act, Cap A18, Laws of the Federation of Nigeria 2004 (ACA). The Act clearly seeks to eliminate the frequent interference by the courts in arbitral proceedings and awards. Under the ACA and the Act, the national courts are precluded from interfering in arbitral proceedings and awards, except under stringent and limited grounds provided in the Act itself. Equally, the court cannot consider the merit of the arbitral award as the court is not sitting in appellate jurisdiction over the arbitral proceedings and award. Under the ACA, practitioners had frequently used the omnibus grounds of “misconduct of the arbitrator” or “an error on the face of the award” to ask the court to set aside awards. These omnibus grounds then became an unruly horse and weaponised delays to the enforcement of awards in the national courts.
However, this bar to arbitration and the enforcement of awards in Nigeria has now been decisively dealt with under the new Act, Section 55(2) of which expressly prevents a court from setting aside an arbitral award on “the ground of an error on the face of the award”. This essentially prevents the court from overturning an award on the basis that it believes the tribunal incorrectly applied the law. Section 55(5) of the Act introduces a more onerous test for an award to be set aside, which is likely to result in fewer successful challenges to arbitral awards in courts. It is no longer sufficient for a party simply to show that one of the grounds for setting aside an award is present; it must also show that the ground “has caused or will cause substantial injustice to the applicant”. The Act, therefore, adopts a far more robust approach to the setting aside of arbitral awards, reducing the ability for the courts to intervene in, and potentially set aside, arbitral awards, thereby enhancing the finality and preservation of the awards.
According to Section 56(1) of the AMA, parties may stipulate in their arbitration agreement that an application to review an arbitral award be made to an Arbitration Review Tribunal (ART). Like the court, the ART is unable to review an award on the merits and can only set aside an arbitral award on specified grounds. The AMA empowers the court to review the decision of the ART. The court may uphold the reviewed decision of the ART or set it aside for the status quo to revert to the original award. The degree of judicial intervention is limited by Subsection 9, which provides that the court may only set aside an award made by the ART where the subject matter in dispute is not capable of settlement by arbitration under the laws of Nigeria, or where the award is contrary to public policy.
Section 56(7) of the AMA provides that an application to the ART does not preclude an application to the court; an application for review by the court or the ART must be made within three months from the date the award was received. Thus, to fall within the limitation period, an aggrieved party may simultaneously institute an action in court for the enforcement of the award without prejudice to the proceedings at the ART. The proceedings may be stayed pending the determination by the ART, and may be resuscitated thereafter.
In Nigeria, the approach to enforcement is the same for different types of arbitral awards. The few exceptions are awards given by the International Centre for Settlement of Investment Disputes (ICSID) and awards with certain subject matters. Section 1(1) of the ICSID (Enforcement of Awards) Act Cap I20, Laws of the Federation of Nigeria, 2004 provides that, if it is expedient to enforce an award made by the ICSID in Nigeria, a copy of the award duly certified by the Secretary-General of the Centre shall be filed directly at the Supreme Court of Nigeria by the party seeking its recognition for enforcement in Nigeria.
Except for ICSID awards, other arbitral awards can be enforced at the Federal High Court, the High Court of a state and the High Court of the Federal Capital Territory, Abuja, unless the parties agree otherwise.
The Act is silent on the subject matter jurisdiction of the court in enforcement proceedings that can be filed before a superior court as provided in the Act. A superior court is defined in the Act as the High Court of a State or the Federal Capital Territory, Abuja, or the Federal High Court. However, recent trends and decisions of the court lean toward registration and enforcement in the court whose jurisdiction covers the subject matter of the arbitral award sought to be enforced. Where the subject matter of the award sought to be registered is under the exclusive jurisdiction of the Federal High Court, as provided by Section 251(1) of the 1999 Constitution, the Federal High Court would be the appropriate court to commence the enforcement proceedings.
Arbitral awards are not enforceable in the following instances:
The application for the enforcement of arbitral awards must be filed within six years of the date of delivery of the award.
Enforcement of Domestic Arbitral Awards
In Nigeria, the available means of enforcing an arbitral award depend on the laws of the place where the award is to be enforced.
The AMA provides frameworks for the enforcing of arbitral awards in Nigeria, and the Lagos Arbitration Law 2011 provides for modes of enforcement of arbitral awards and interim measures. The appropriate procedure for enforcing a domestic award depends on the type of arbitral proceedings and the parties involved.
Order 43 Rule 1 of the High Court of Lagos State Civil Procedure Rules 2019 states that all applications shall be by motion, while Order 43 Rule 3(1) states that every motion shall be on notice, unless otherwise provided or permitted by any law or rules. Therefore, an application for the enforcement of arbitral awards thereunder would be by a motion on notice.
Order 52 Rule 16(1) of the Federal High Court (Civil Procedure) Rules 2019 provides that an application for enforcement of an award can be made through a motion ex parte (without notice to the other party). A widely held view is that the courts ought to order the application to be brought on notice to accord the other party the right to a fair hearing.
Furthermore, parties seeking to enforce an award must provide the arbitration agreement or, in the alternative, a certified copy of the arbitration agreement and the original arbitral award or a certified copy of the initial arbitral award, as provided under Section 32(2) of the AMA. These documents would be attached to an affidavit in support of the application for the enforcement of arbitral awards.
Enforcement of Foreign Arbitral Awards
Under the provisions of Section 91(5) of the AMA, an arbitration is international if:
The award emanating from an international arbitration can be enforced by any of the following procedures.
There are no specific/definite costs outlined or expected for the enforcement of an arbitral award. However, processing the enforcement of arbitral awards involves the payment of administrative fees, such as filing fees paid to the court and professional fees paid to counsel (which vary) for representation in court.
The law provides for a limitation period of six years within which an application for the enforcement of an arbitral award must be brought. There is no ambiguity in the timeframe within which an action to enforce an arbitral award must be brought. A proceeding to enforce an arbitral award typically lasts between 12 and 18 months. However, it is usual for unsuccessful parties to appeal the decision; the appeal process can take an indeterminable period, typically another two or three years.
An arbitral award is regarded as a final judgment and, as such, courts are enjoined to, as much as possible, uphold or affirm and enforce arbitral awards when approached. However, the law recognises instances where the enforcement of an arbitral award may be challenged. Section 58(1) of the AMA provides limited grounds for the challenge of the enforcement of an arbitral award, as follows.
A party may appeal to a higher court, in this case the Court of Appeal, against a decision recognising and enforcing an arbitral award. The appeal process is distinct from the process of recognising and enforcing the arbitral award at the High Court before which the judgment is first sought to be recognised and enforced. Where the High Court has made a final order recognising the award, the judgment debtor may thereafter appeal to the Court of Appeal seeking to set aside the order of the High Court.
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info@sskohn.com www.sskohn.comRegistration and Enforcement of Foreign Judgments in Nigeria Under the Foreign Judgments (Reciprocal Enforcement) Act, 1990, Cap 152, Laws of the Federation of Nigeria 2004 – A Case for the Inclusion of Non-monetary Foreign Judgments
Introduction
As a general principle of law, before a judgment can be enforced in Nigeria, and perhaps in countries of the world operating the dual principle of registration and enforcement of judgment, it must first be registered. However, the converse is not the case, as certain judgments may be registrable yet unenforceable.
The Reciprocal Enforcement of Foreign Judgments Ordinance, Cap 175, Laws of the Federation of Nigeria and Lagos, 1958 (the “Ordinance”) and the Foreign Judgments (Reciprocal Enforcement) Act, 1990, Cap 152, Law of the Federation of Nigeria 2004 (the “Act”), are the two statutes regulating registration and enforcement of foreign judgments in Nigeria.
Foreign judgments can only be enforced under the Ordinance and the Act upon registration of same by a superior Nigerian court. Registration can only be done under the Ordinance and the Act. Where a foreign judgment does not conform with the requirements of the Act, it cannot enjoy the benefits of registration under the Act but can only be “enforced” by commencing a new action based on the foreign judgment. (Olawoyin, Adewale. (2014). Enforcement of Foreign Judgments in Nigeria: Statutory Dualism and Disharmony of Laws. Journal of Private International Law. 10. 10.5235/17441048.10.1.129).
By the joint provisions of Sections 3 (2) and 10 of the Act, judgments of the superior courts of any foreign country are registrable and enforceable under the Act if the Minister of Justice of Nigeria (the “Minister”) has made an order to that effect or if such a judgment is given before the contemplated order, within 12 months of the date of the foreign judgment (or as extended by a superior Nigerian court).
The Minister has yet to make any such order since the enactment of the Act. Thus, registration and enforcement of foreign judgment under the Act are only maintainable within 12 months of the date of judgment subject to an extension of time by Nigerian courts. The same tenor is provided for in the Ordinance.
There are various factors provided in the Act to determine its applicability to foreign judgments, among which are that the judgment must be final and conclusive, must be delivered by a court that has jurisdiction to adjudicate over the matter, and must concern the payment of money, excluding sums payable in respect of taxes, similar charges, fines, or other penalties.
This article focuses on the provisions of the Act affording registration and enforcement to only monetary foreign judgments and proposes the possibility of expanding the scope of the Act to cover non-monetary foreign judgments in a changing commercial climate.
Type of foreign judgments registrable and enforceable under the Act
By Section 3 (2) of the Act, for a judgment to be registered and enforceable in Nigeria, there must be “payable thereunder a sum of money, not being a sum payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty,” thus limiting the Act’s application to monetary judgments.
Apart from the Nigerian statutory position, the popular international stance and at common law has been that enforcement of judgments by foreign courts is restricted to monetary judgments, that is, judgment for the payment of a sum of money. The implication of the restriction of registration of foreign judgment by the Act to monetary judgment is therefore that foreign equitable orders such as injunctions, declarative orders and specific performance are not registrable or enforceable by a Nigerian court.
We propose that Nigerian laws need to change in this respect as the world has become more interdependent and interrelated as a result of increasing cross-border commercial transactions. This can be informed by the legal developments in other jurisdictions.
Trends in other jurisdictions – Canada as a case study
Having discussed the law as it is in Nigeria, it is essential to make a comparative analysis with other jurisdictions to provide a structural framework for our proposition that the time is ripe for Nigeria to amend the Act to recognise, register and enforce non-monetary foreign judgments. Our focus will be on the legal advancement in Canada, while noting the developments in other jurisdictions.
There are several reasons to focus on Canada as a case study for this discourse. Firstly, both Nigeria’s and Canada’s legal system are dominantly based on common law. Though Canada’s legal system consists of common law and civil law, Quebec is the only province with a civil code, while all other provinces use common law. Secondly, Canada, like Nigeria is a federation having several provinces and territories with a central government, and the jurisdiction is divided between the federal government and the various provinces.
Thirdly, the law-making process of Nigeria and Canada is the same in that they both have federal laws for the country and state/province laws respectively, dealing with laws in their areas. Fourthly, both Nigeria and Canada operate the executive, legislative and judiciary arms of governance with defined powers for each organ. Fifthly, the court systems of both Nigeria and Canada are similar, having federal courts and state/provincial and territorial courts, with the Supreme Court as the final court of appeal.
Lastly, we are of the view that Canada’s evolution, changing its traditional view that only monetary foreign judgments can be enforced in its courts, both by legislation and by case law is worthy of emulation by Nigeria. These will be discussed further.
The legislation
Some provincial legislation in Canada embraces the recognition and enforcement of non-monetary foreign judgments.
For instance, the Saskatchewan province in Western Canada expands the enforcement of foreign judgments to a non-monetary foreign judgment by virtue of Sections 2 and 7 of the Enforcement of Foreign Judgments Act, 2005, Statutes of Saskatchewan, Chapter E-9. 121. Section 2 of this Act, which provides for an interpretation of specific words under the Act, defines a foreign judgment as a final decision made in a civil proceeding by a court of a foreign state, rendered by means of a judgment, order, decree or similar instrument in accordance with the laws of that state, and includes a final decision made by an adjudicative body other than a court. By this definition, a judgment is not restricted to only monetary judgments.
Also, the Uniform Law Conference of Canada, in transitioning to accommodate the enforcement of non-monetary foreign judgments, adopted a Uniform Enforcement of Foreign Judgments Act in 1988 to apply to the enforcement of foreign judgments rendered in countries with which Canada has not ratified a treaty or convention on the enforcement of foreign judgments.
Simply put, the said Act requires no reciprocity with respect to the territory where the foreign judgment was delivered. This Act has been amended a number of times, with the most recent version being the Uniform Enforcement of Foreign Judgments Act, whose Section 7 makes provision for enforcement of non-monetary foreign judgment and further permits the Canadian courts to make an order that the foreign judgment be modified as may be required to make it enforceable in the enacting province or territory, unless the foreign judgment is not susceptible to being so modified.
Further, while Quebec is not a common law jurisdiction, the Civil Code of Québec, S.Q. 1991, c. 64, does not distinguish between money judgments and non-money judgments in its recognition and enforcement provisions, although the finality requirement has been maintained.
The cases
Historically, the prevailing view within common law jurisdictions, including Canada, was that the recognition and enforcement of foreign judgments were limited to final monetary judgments. As such, Canadian courts previously only recognised and enforced foreign monetary judgments. However, in the case of Pro Swing Inc v Elta Golf Inc 2006 SCC 52; [2006] 2 S.C.R. 612 (Can.) (“Pro Swing”), the Supreme Court of Canada (SCC) lifted this limitation and held that courts have jurisdiction to enforce non-monetary foreign judgments, and thus expanded the scope of recognition and enforcement of foreign judgments in Canada. Briefly, the facts of Pro Swing as reported are as follows:
“Pro Swing manufactures and sells customized gold clubs and golf club heads. It owns the Trident trademark in the U.S. Elta Golf carries on business in Ontario, and it offered for sale on its Website goods bearing marks which resembled Trident. Pro Swing filed a complaint in Ohio for trademark infringement. The parties entered into a settlement agreement, which was endorsed by a consent decree of the U.S. District Court. The decree enjoined Elta Golf from purchasing, marketing or selling golf clubs or golf club components bearing the Trident mark or confusingly similar variations. In 2002, Pro Swing brought a motion for contempt of court alleging that Elta Golf had violated the consent decree, and a contempt order was issued. Pro Swing then filed in the Ontario Superior Court of Justice a motion for recognition and enforcement of the consent decree and the contempt order. The motions judge held that nonmoney foreign judgments can be enforced and declared the consent decree valid and enforceable in Ontario. She also found that the contempt order was restitutionary in nature and that parts of that order were duplicative of the consent decree and were not final, and concluded that the portions not offending the finality requirement could be severed. She recognized the severed portions of the contempt order and declared them to be enforceable. The Court of Appeal set aside the motions judge’s decision, concluding that both foreign orders were not enforceable in Ontario because they were ambiguous in respect of material matters, in particular on the critical issue of the scope of the extraterritorial application of these orders.”
Pro Swing appealed against the decision of the Court of Appeal to the Supreme Court of Canada (SCC). The SCC was unanimous on the need to vary the common law rule that non-monetary foreign judgments were not recognisable or enforceable.
However, the SCC refused to enforce the judgments due to differing views on the propriety of the orders, unrelated to its non-monetary nature. A majority of the Justices held the view that:
While a majority of the Justices ruled that the orders should not be enforced as the balancing exercise did not favour such enforcement, what the SCC did in Pro Swing was to break away from the traditional rule of enforcing only monetary judgment. In Pro Swing, the SCC laid down the following additional factors that courts must consider in determining whether a foreign equitable order should be enforced in Canada:
The SCC further indicated that appropriate distinctions can be drawn on a case-by-case basis and stated that there was “a need to incorporate the very flexibility that infuses equity” in drawing up the criteria for recognising and enforcing foreign non-monetary judgments.
Pro Swing has been applied subsequently in some cases as follows:
In Pro Swing, Deschamps J. noted in the beginning of the judgment that:
“Modern-day commercial transactions require prompt reactions and effective remedies. The advent of the internet has heightened the need for appropriate tools. On the one hand, frontiers remain relevant to national identity and jurisdiction, but on the other hand, the globalisation of commerce and mobility of both people and assets make them less so. The law and the justice system are servants of society, not the reverse. The case for adapting the common law rule that prevents the enforcement of foreign non-monetary judgments is compelling. But such changes must be made cautiously.”
The above excerpt thus set the tone for the Pro Swing judgment. In essence, the SCC advocated for a paradigm shift from the traditional rule that non-monetary foreign judgments are not recognised or enforceable to one that accommodates modern commercial litigation and arbitration by recognising and enforcing such judgments. This shift is gaining global acceptance.
Other than Canada, New Zealand and Australia have legislation for the registration of foreign non-monetary judgments and UK legislation provide for the enforcement of both money and non-money judgments. (Richard Frimpong Oppong, Canadian Courts Enforce Foreign Non-Money Judgments, The Modern Law Review Vol. 70, No. 4 (July 2007)).
Similarly, the basic requirements by the South African courts for the enforcement of a foreign judgment under common law do not include whether the foreign judgment is monetary or not.
Also, the approach taken by Canadian courts was followed in the Jersey Courts in Brunei Investment Agency & Bandone Sdn. Bhd. v. Fidelis Nominees Ltd. (2008) JRC 152 (Jersey). The Jersey judgment “is a significant and progressive judgment which enables the Jersey judiciary to deal with clear cut foreign non-monetary judgments efficiently and quickly”. (Mackereth, E. (2009). Opening the door to enforcement of foreign non-monetary judgments in Jersey: Brunei and Bandone v Fidelis and Others [2008] JRC152. Trusts & Trustees Vol. 15, No. 1, March 2009. https://doi.org/10.1093/tandt/ttn123).
According to Edward Mackereth, the Jersey courts now have discretion to enforce foreign non-monetary judgments, including equitable orders such as specific performance, and injunctive or declaratory relief.
Further, in Davis v Turning Properties Pty Ltd. (2006) 222 ALR 267, a high court of Australia granted a Mareva order enforcing a worldwide Mareva order of the Supreme Court of the Commonwealth of the Bahamas.
Implications of restricting the enforcement of foreign judgments to only monetary judgements
The hardship caused by this restriction under the Act are not farfetched. Foreign judgments may be worthless if not registrable or enforceable where the indebted party has assets. Also, a successful litigant will be forced to institute a fresh action against the other party in Nigeria and adduce fresh evidence, which causes undue delay. The judgment creditor would incur extra costs in re-litigating the cause of action only to obtain similar reliefs which were already granted in his favour in a foreign court.
These are undesirable steps to say the least, especially because the nature of equitable reliefs is such that time is usually of the essence and the cause of justice would be defeated. For example, a worldwide freezing order or Mareva injunction should be enforceable immediately wherever the defendant has assets to be effective, but this would not be possible if such orders are not immediately registrable or enforceable and the party in favour of whom same was granted has to institute a fresh action to obtain the same orders.
The limitations are identified as follows:
The foregoing limitations need to be evaluated to determine whether they align with Nigeria’s legal and economic goals, especially as Nigerian courts apply the provisions of the Act strictly when considering the registrability or setting aside of a foreign judgment.
Enforcement of foreign judgments in Nigeria is a crucial aspect of international litigation and, as shown above, recent developments have raised concerns about the limitations imposed by the rule of not recognising or enforcing non-monetary foreign judgments. There have been various developments in other jurisdictions which have changed the trajectory of the type of foreign judgment registrable and enforceable by their domestic courts.
However, Nigerian laws have not yet been amended to reflect these developments. The Act, since its enactment, has remained unchanged. Rather than remaining resistant to progressive approaches, Nigeria should embrace these changes, albeit with caution, to mitigate the identified hardships and align with evolving international practices.
To curb the undesirable outcomes and excesses identified in Pro Swing, the Act can, in allowing non-monetary foreign judgments to be registrable and enforced, impose on the Nigerian courts a duty to ensure a balanced measure of restraint and involvement that may be otherwise unnecessary in the case of monetary foreign judgment.
Conclusion/Recommendation
The world is becoming a global “village”, and the rate of cross-border commercial litigation and arbitration has increased over time, leading to a rise in judgments from foreign courts that are binding on parties or “res” domiciled in Nigeria.
This shift in the commercial litigation and arbitration landscape necessitates that equitable remedies, such as prohibitive and declaratory orders, become more readily available for registration and enforcement by Nigerian courts. It is therefore imperative for Nigeria to reassess and review its provisions on the applicability of the Act to only monetary judgments, as some other jurisdictions have done by incorporating these changes into their common law.
While judicial activism might seem like a desirable approach to expedite this process, courts are constrained to interpreting the law rather than making it. Any reform regarding the registration and enforcement of foreign judgments in Nigeria must occur through legislative action, as the current framework is governed by the Ordinance and the Act.
It is incumbent upon the Nigerian legislature to proactively review existing laws to accommodate the increasingly cross-border nature of litigation and arbitration, while considering the potential challenges associated with applying the Act to non-monetary judgments.
Such an undertaking would undoubtedly raise novel issues regarding the enforcement of foreign judgments for Nigerian courts to address. Our proposition is that Nigerian laws must evolve to meet the needs of society through an amendment to the Act, coupled with cautious application and judicial discretion on a case-by-case basis.
In addition, we recommend that the Minister exercises the powers granted under the Act to issue orders that activate its full provisions.
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