NIGERIA Law and Practice Contributed by: Ben Unaegbunam, Omolola Coker, Sanford Mba, Promise Osimhen, Chidera Chikere and Oluwaseun Denagan, Dentons ACAS-Law (Adepetun, Caxton-Martins, Agbor & Segun)
any other enforcement trigger expressly provided in the finance documents. Lenders have several methods available for enforc- ing security interests. One common method is the appointment of a receiver or receiver/manager under CAMA, which may be made under the terms of the debenture or security document, or, where necessary, by obtaining a court order. The lender or appointed receiver may also exercise the statutory power of sale, which is typically included in legal mortgages and fixed-charge instruments, such that upon default occurring and statutory or contractual notice require- ments being satisfied, the lender or receiver will sell the secured asset without court intervention. For equitable securities, the lenders or receiver may also apply to the court for an order of foreclosure to obtain ownership of the secured asset. Where a personal or corporate guarantee secures a loan, a lender may file a suit to enforce the guarantee and recover the debt. There are certain restrictions and considerations that affect enforcement. Under CAMA, a receiver or receiv- er/manager must act in the best interests of the com- pany and its creditors and is required to file statutory returns with the CAC. Secured lenders must comply with all statutory notice requirements before exercis- ing remedies such as sale or possession, as failure to do so can render the enforcement action invalid. 6.2 Foreign Law and Jurisdiction Under Nigerian law, parties to a contract are gener- ally free to choose a foreign governing law for their agreement. Nigerian courts will uphold such a choice where the transaction bears a reasonable connection to the selected foreign jurisdiction or where the par- ties have clearly expressed their intention in the con- tract to adopt that choice of law for their transaction. However, this is subject to whether such foreign law is genuine, bona fide, legal and reasonable. Notwithstanding the above, where a security asset is necessarily governed or regulated by Nigerian laws, Nigerian courts are inclined to apply the law that reg- ulates such assets. Assets typically regulated under local laws include shares in a Nigerian company, land in Nigeria, upstream petroleum assets, etc.
Similarly, Nigerian courts will ordinarily respect a con- tractual submission to a foreign jurisdiction, including clauses specifying that disputes should be resolved by foreign courts or arbitral tribunals. A Nigerian court will enforce exclusive jurisdiction clauses unless there are strong reasons not to do so, such as fraud, oppres- sion, or a denial of justice. A waiver of sovereign immunity by a Nigerian state- owned entity or government body is also generally recognised under Nigerian law and will be deemed valid and enforceable. Nigerian courts have upheld waivers of immunity in cases involving international financing and investment agreements, provided that the waiver is clear and unequivocal. However, enforce- ment against certain categories of state-owned prop- erty, especially assets used for diplomatic or public purposes, may still be restricted under principles of public international law and the Nigerian State Immu- nity Act. 6.3 Foreign Court Judgments Nigerian courts will generally recognise and enforce foreign judgments without a further review of the merits, subject to certain conditions. Any final and conclusive judgment obtained in a foreign jurisdic- tion, including an award against an obligor under the finance documents, may be registered and enforced as a judgment of the courts of Nigeria, provided that specific conditions are satisfied. These include: • The country whose court or institution entered the judgment accords reciprocal treatment to judg- ments delivered by Nigerian courts. • The parties to the finance documents had the capacity to enter into the agreements. • It is established that the foreign court or arbitral tribunal was properly constituted and had jurisdic- tion over the subject matter of the judgment. • Notice of the proceedings in the foreign court or arbitral tribunal was duly served on the defendant in sufficient time to enable a defence to be made. • The judgment was not obtained by fraud. • Enforcement of the judgment would not be con- trary to Nigerian public policy. • The matter in dispute had not already been the subject of a final and conclusive judgment by another competent court.
436 CHAMBERS.COM
Powered by FlippingBook