The US Court of Appeals in Washington, DC has affirmed a decision of the District Court that found it had jurisdiction in a suit for recognition and enforcement of a USD9 billion award arising from a London-seated arbitration conducted under the rules of the Nigerian Arbitration and Conciliation Act.

The Foreign Sovereign Immunities Act (FSIA) is the sole basis to obtain jurisdiction over a foreign state in US courts. Nigeria claimed to be immune from suit under the FSIA, while the award creditor invoked that statute's arbitration exception. As the High Court of Nigeria set the award aside, the Court of Appeals had earlier remanded the matter to the District Court to consider that issue (Legal update, Foreign sovereign entitled to argue immunity before defending against arbitral award enforcement (DC Circuit)).

On remand, the District Court concluded that it could proceed with the case because Nigeria had waived sovereign immunity. Nigeria made a second appeal.

The Court of Appeals noted that two FSIA exceptions were relevant: the waiver exception (28 U.S.C. § 1605(a)(1)) and the arbitration exception (28 U.S.C. § 1605(a)(6)).

The court held that Nigeria's sovereign immunity was abrogated by the arbitration exception and declined to address the District Court's application of the waiver exception.

The arbitration exception applies where there is:

The only issue in contention was the existence of the award. Nigeria argued that the award was not valid and enforceable because the Nigerian court had set it aside. The court rejected that argument, holding that the validity or enforceability of an arbitral award is a merits question, not a jurisdictional one. The Court of Appeals again remanded the case to the District Court to consider the merits of the enforcement action, including Nigeria's request that enforcement be refused under article V(1)(e) of the New York Convention.

Case: Process & Indus. Devs. Ltd. v. Fed. Republic of Nigeria, (D.C. Cir. Mar. 11, 2022) (Henderson, J).