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Introduction
To date, public policy remains one of the grounds for setting aside an arbitral award. 1 However, whether an arbitral award will be successfully set aside on the grounds of public policy depends on various factors, such as the provisions of the national laws, judicial interpretation, and the attitude of courts to arbitration. Notwithstanding, the question of how far a party may rely on public policy to set aside an arbitral award remains a subject of debate across various jurisdictions. 2
The recent decision by the Court of Appeal in Champion Breweries Plc v Brauerei Beck GMBH & Co. KG3 brews a twist between public policy and party's conduct. The decision reflects how a party's conduct may prevent it from seeking to set aside an arbitral award on the grounds of public policy, particularly when it had, by its conduct, condoned the act complained against and had enjoyed benefits from the wrong. The Court's decision reaffirms the sanctity of arbitral awards and draws a firm line between legitimate public policy concerns and mere opportunism by parties seeking to evade contractual obligations.
Facts of the Case
In October 2005, Brauerei Beck GmbH (Beck) entered a Manufacturing, Distribution, Technology, and Trademark License Agreement with Champion Breweries Plc (Champion) to sell its trademark brand, Beck's Beer, in Nigeria
The Agreement required registration under the National Office for Technology Acquisition and Promotion (NOTAP) Act, which mandates that all technology transfer agreements be registered within sixty (60) days. Champion, however, failed to register the contract but went ahead to perform substantial aspects of it, producing and selling Beck's Beer in Nigeria and benefitting commercially from the Agreement.
When disputes later arose over unpaid royalties, the matter was referred to arbitration in Geneva, pursuant to the arbitration clause contained in the Agreement. The arbitral tribunal eventually rendered an award in favour of Beck.
Upon Beck's application to enforce the award in Nigeria before the High Court of Lagos State, Champion resisted, arguing that because the Agreement had not been registered with NOTAP, it was illegal, void, and contrary to Nigerian public policy, and therefore incapable of giving rise to a valid arbitration or enforceable award.
The Court of Appeal's Decision
The Court of Appeal dismissed the appeal and affirmed the lower court's decision, confirming the recognition and enforcement of the arbitral award.
According to the Court, the non - registration of the Licensing Agreement was not contrary to public policy, as the NOTAP Act merely renders a contract that fails to meet its outlined requirements non - registrable, 4 with the consequent effect of not being able to receive payments due under the Agreement through the named channels. The Court also found it equitably unjust for Champion to allege the illegality of the Agreement as a means of escaping its contractual obligations under the Agreement when it had substantially benefited from it. 5
While the Court reprimanded Beck for proceeding with the arbitral proceeding despite an anti - arbitration injunction, the Court was of the view that Champion could not complain about Beck's disobedience of the Court's order, having withdrawn the contempt proceedings initially commenced against Beck.
Commentary
This is not the first time the Court of Appeal has had to determine the resistance to an arbitral award on the grounds of public policy based on the non - registration of an Agreement under the NOTAP Act. In Limak v Sahelian Energy and Integrated Services Limited , 6 whether the non - registration of an Agreement under the NOTAP Act is a public policy ground capable of preventing the recognition and enforcement of an arbitral award was a question that the Court of Appeal had to determine.
In Limak's case, the court set aside a foreign arbitral award because the Agreement that gave rise to the arbitration was not registered under the NOTAP Act and was therefore held to be contrary to Nigeria's public policy.
While the Court in Limak focused on the registration of the Agreement required under the NOTAP Act, and the intent and purpose of registration, the Court in Champion's case considered the statutory effect of non - registration, and Champion's conduct in determining whether the contract, and by extension, the award, was tainted with breach of public policy.
Between public policy and party conduct
The recent decision of the Court reveals that whether a public policy defence would succeed in an action for the setting aside of an arbitral award depends on various factors. In this case, the Court held that the failure to register the Agreement under the NOTAP Act does not amount to illegality, as the Act expressly provides for the effect of non - registration, which is the non - entitlement to payment through authorised channels. This further raises an interesting debate as to whether it is a party's act of non - compliance with a statutory provision that amounts to a breach of public policy, or whether the statutory effect of non - compliance defeats a public policy defence . While the primary consideration in determining breach of public policy is the offending conduct, the resultant effect cannot be excluded in determining whether the Courts should declare a breach of public policy.
In the Limak case, 7 the Court remarked that the phrase 'public policy' appears to mean the ideas, which for the time being, prevail in a community as to the conditions necessary to ensure its welfare; so that anything is treated as against public policy if it is generally regarded as injurious to the public interest. The court went further to hold that public policy, in relation to this question is that principle of the law which holds that no subject can lawfully do that which tends to be injurious to the public, or against the public good, which may be termed, as it sometimes has been, the policy of law, or public policy in relation to the administration of the law. Thus, the effect of the action/ breach is as important as the action, as the court would not consider the action without the consequence on the public good and welfare.
Remarkably, the most striking aspect of the Court's decision is the Court's focus on Champion's conduct. The Court reasoned that Champion could not rely on illegality to resist the recognition and enforcement of the arbitral award when it was its contractual obligation to ensure that the Agreement was duly registered with NOTAP.
The Court held that, having enjoyed the benefits under the Agreement, it is estopped from relying on illegality or public policy in escaping its contractual obligations to Beck. Indeed, the Court of Appeal considered the conduct of Champions, which it described as an "I - too - know" attitude, and held that such conduct was a ploy to conceal its default in performing its own obligations under the agreement while seeking to retain the profits derived therefrom. The Court held that it would be conscienceless and inequitable to permit Champions, by whatever antics, to evade its obligations and still retain the benefits of the agreement. Accordingly, it must disgorge all profits obtained thereunder.
Furthermore, the Court proceeded to consider the consequences of the failure to register the agreement under the National Office for Technology Acquisition and Promotion (NOTAP) Act, which stipulates that no payment shall be made by or under the authority of the Ministry of Finance, the Central Bank of Nigeria, or any licensed bank to the credit of any person outside Nigeria, unless the parties concerned present a certificate of registration issued under the Act, together with a certified copy of the agreement
Thus, it can be seen that while the Court acknowledged that the non - registration of the agreement constitutes a breach of the statute, the resultant effect does not impinge upon public interest, public good, or public welfare. The statute provides that the parties to such an unregistered agreement shall not be entitled to receive payment from, or through, the Ministry of Finance, the Central Bank of Nigeria, or any licensed bank in Nigeria. Consequently, the implications are not far - reaching to society at large but are rather intended to affect only the defaulting party adversely.
Remarkably, Beck's disobedience of the anti - arbitration injunction may have amounted to a proper public policy defence , given the Court's reaction to Beck's disobedience as "an affront to the society, state, and the citizens". However, this route could not be explored because Champion had, by its conduct, condoned Beck's disobedience by withdrawing the contempt proceedings initially commenced against Beck.
The reasoning of the Court is to the effect that Champion cannot be heard to rely on its own default as a basis to avoid or nullify its payment obligations under the agreement reflects how a party's conduct may prevent it from successfully relying on a public policy defence in refusing the recognition and enforcement of an arbitral award. This position mirrors a judicial trend of Nigerian Courts being increasingly unwilling to allow parties to take advantage of technical defects to escape liability under arbitral awards. The Court's position establishes that public policy should promote, not undermine, commercial morality and consistency in business dealings.
It is pertinent to note that every case is determined on its peculiar facts. Hence, the factual circumstances of a case are pivotal in arriving at a just decision. In the instant case, the Court undoubtedly took into account the conduct of the parties, particularly that of Champion, in reaching its decision. Champion was under a clear obligation to register the contract within sixty (60) days but failed to do so. It equally failed to demonstrate that it made any effort to renegotiate the offending clauses of the agreement with Beck, which ordinarily constituted a breach of the Agreement. Instead, it proceeded to distribute Beck's Beer and made substantial benefit from the Agreement. To the Court, it would be unconscionable to resist the recognition and enforcement of the award, as that would enable Champion to benefit from its own wrong.
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Footnotes
1 Limak Yatirim , Enerji Uretim Isletme Hizmetleri Ve Insaat A.S. & Ors v. Sahelian Energy & Integrated Services Ltd (2021) LPELR - 58182(CA); Section 55(3)(b)(ii) of th e Arbitration and Mediation Act, 2023; Bayshore Technologies Limited v. Green Fuels Limited (Unreported) FHC/L/CS/377/2025
2 Arbitrability and Public Policy Challenges by Penny Maddenn KC and Ceyba Knoebel. Link Accessed on 24 October 2025
3 [2025] LPELR - 81422(CA)
4 Section 6(2) of the NOTAP Act, LFN 2004
5 Section 7 of the NOTAP Act, LFN 2004
6 [2021] LPELR - 58182(CA)
7 Supra
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