STRANGE BEDFELLOWS- CONTRACT REGISTRATION UNDER THE NOTAP ACT AND THE VALIDITY OF FOREIGN AWARDS

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STRANGE BEDFELLOWS- CONTRACT REGISTRATION UNDER THE NOTAP ACT AND THE VALIDITY OF FOREIGN ARBITRAL AWARDS Background In a consolidated decision made in Suit Nos. CV/481/18 and CV/2443/18 on 17th July, 2020 the High Court of the Federal Capital Territory set aside a foreign arbitral award on the ground that the underlying contract between the parties was non-compliant with the registration requirement of the National Office for Technology Acquisition and Promotion Act (NOTAP Act). The facts of this case are that the Applicant- Sahelian Energy and Integrated Services Limited (Sahelian), is an indigenous company that needed a technical partner with an electricity distribution licence in a foreign country for the purpose of participating in the privatization process of the Kaduna Electricity Distribution Company. Pursuant to this, Sahelian and the 1st Respondent- Limak Yatirim, Enerji Uretim Isletme Hizmetleri Ve Insaat A.S (Limak) entered into a Cooperation Framework Agreement (CFA). Under the CFA, Limak was to provide Sahelian with technical support over a five-year period for a fee of $17.5 Million. In August 2013 Limak applied to register the CFA with the National Office for Technology Acquisition and Promotion (NOTAP) but the application was refused on the ground that it violated the requirements of the NOTAP Act and the 2011 Revised Guidelines for the Registration and Monitoring of Technology Transfer Agreements in Nigeria. When a dispute subsequently broke out between the parties, they went to ICC arbitration and a final award was made in Limak’s favour. High Court Set Aside Proceedings Sahelian applied to the High Court of the Federal Capital Territory to have the award set aside on the grounds that the award was against public policy of Nigeria and that there was an error of law on the face of the award. In the set aside proceedings, Sahelian essentially argued that section 5(2) of the NOTAP Act requires a contract such as the CFA to be registered with NOTAP but the CFA was not so registered, by reason of which performance of the payment obligations under the CFA is illegal under section 7(1) of the NOTAP Act. It was also argued that the Arbitral tribunal found that the CFA required registration with NOTAP but nevertheless held that the non-registration was not sufficient to discharge the Applicant of its payment obligations under the agreement, by reason of which the award is perverse in law as it seeks to enforce a payment obligation that clearly contravenes mandatory requirements of a Nigerian statute. Limak opposed the set aside proceedings and in doing so argued that it was a gross abuse of court process deliberately designed to irritate, annoy and harass because the power of the Nigerian Court to set aside an Arbitral Award is limited by the Arbitration and Conciliation Act 2004 to only Domestic Awards and not International Awards.


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STRANGE BEDFELLOWS- CONTRACT REGISTRATION UNDER THE NOTAP ACT AND THE VALIDITY OF FOREIGN AWARDS by Mofesomo Tayo-Oyetibo - Issuu