The Federal Government of Nigeria (Nigeria) has been allowed to pursue its proceedings to set aside a default judgment granted on 9 November 2018. The default judgment in question awarded businessman Dr Williams around $15 million plus costs, but Nigeria claim that the judgment was obtained fraudulently.
Dr Williams brought an application to strike out Nigeria’s set aside claim on the grounds that it is an abuse of process and vexatious, but the Commercial Court ruled that Nigeria’s claim should be allowed to continue.
Interaction with the principles of res judicata
Nigeria issued the proceedings, alleging that Dr Williams made knowingly false representations and relied on fabricated documents to procure the default judgment.
Dr Williams submitted that action is a collateral attack on the previous judgments of the court and the the allegations of fraud were well known by the claimants earlier, but the claimants failed to plead them in previous proceedings. Dr Williams relied on res judicata principles that “a litigant should bring forward his whole case” and should not be allowed to litigate the same issues twice.
On the other hand, the claimants cited the Supreme Court decision in Takhar v. Gracefield Developments Ltd [2019] UKSC 13, [2020] AC 450 (Takhar), saying that they were not aware of the fraud in earlier proceedings.
Takhar established that a party seeking to set aside a judgment on the ground of fraud is not required to show that the fraud could not have been uncovered in advance of the obtaining of the judgment. An absence of reasonable diligence is not a reason to stay the proceedings.
When is an action ‘abusive’?
The action is abusive only if:
- fraud was actually alleged in the earlier proceedings, or
- there was a deliberate decision in the earlier proceedings not to allege a known fraud or not to investigate a suspected fraud.
The claimants did not actually allege fraud in any of the previous proceedings, and did not take a deliberate decision in earlier proceedings not to allege a known fraud or not to investigate a suspected fraud. As such, this case did not offend the principles of res judicata, and the claimants’ claim was not abusive.
In fact, the advice from the claimants’ legal representation at the time was to apply to set aside the judgment because it had not been properly served.
The evidence indicated that the claimants were not actually aware of the possibility of defending the proceedings on the ground of fraud, and no consideration was given to doing so.
Comment
This case shows that the courts will not allow allegedly fraudulent behaviour to go unexamined even when the importance of finality in litigation is emphasized. It is not the fault of the victim of fraud if they have been hoodwinked by dishonest actions.
Dictum from Lord Sumption sums it up:
“it is not a defence to an action in deceit to say that the victim of the deceit was foolish or negligent to allow himself to be taken in…. It follows that unless on the earlier occasion the claimant deliberately decided not to investigate a suspected fraud or rely on a known one, it cannot be said that he ‘should’ have raised it.”
The proceedings to set aside the award will continue, as the application to strike them out was dismissed.
Read the full judgment here: Federal Government of Nigeria & Anor v Louis Emovbira Williams [2025] EWHC 1096 (Comm)
