International -- 2022



Esso Exploration & Production Nigeria Ltd. & Shell Nigeria Exploration & Production Co. Ltd. v. Nigeria National Petroleum Corp.   (2nd Circuit)

Protecting foreign investments through enforcement of international arbitration awards

The NAM filed an amicus brief seeking to reverse a lower court's refusal to enforce a valid $1.8B arbitral award related to Exxon's off-shore operations in Nigeria that was wrongly set aside by Nigerian courts. Pursuant to the parties' agreement, the award was rendered in Nigeria by a competent panel following fair procedures, yet was erroneously set aside by politically motivated Nigerian courts. The Southern District of New York followed suit, giving deference to the Nigerian set-aside judgment and refusing to enforce the award. On appeal to the 2nd Circuit, the NAM filed an amicus brief arguing that under the New York Convention, a U.S. court should not defer to a foreign court's judgment setting aside an arbitral award where the arbitration involved a state-owned entity, securing the set-aside judgment in its own sovereign courts, based upon parochial grounds far removed from international norms. This litigation is important for all manufacturers that employ arbitration clauses in their international dealings and rely on proper construction of the treaties governing their enforceability and the enforceability of the resulting awards.

On July 8, 2022, the 2nd Circuit concluded that the Nigerian judgments did not strike all parts of the arbitral award. The 2nd Circuit vacated the district court's decision "as to those parts of the award that were not struck by Nigerian judgments" and affirmed on all other grounds. The 2nd Circuit remanded the case to the district court "so that it may first determine precisely which aspects of the Award are enforceable under the Nigerian judgments, and then enter a partial enforcement order based on that determination."


Related Documents:
Decision  (July 8, 2022)
NAM brief  (January 17, 2020)