The Court of Appeal has dismissed an appeal by Kaduna Electricity Distribution Company Plc against the Transmission Company of Nigeria (TCN), upholding the enforcement of an arbitral award in favour of TCN.
The appellate court held that charging interest on a loan or deferred payment arrangement does not, by itself, make a lender a moneylender who must obtain a licence.
The court also reaffirmed that proceedings to enforce an arbitral award cannot be used as an opportunity to reopen the substance of a dispute already determined by an arbitral tribunal.
The judgment was delivered on October 30, 2026, in Kaduna Electricity Distribution Company Plc v. Transmission Company of Nigeria Plc. The panel was led by Justice Ibrahim W. Jauro, with Justices Mohammed Danjuma and Ntong Festus Ntong concurring.
The court dismissed Kaduna Electric’s appeal and awarded ₦500,000 in costs against the company.
The dispute arose from a Deferred Payment Agreement entered into by the parties on March 16, 2018. The agreement subsequently led to arbitration, which produced a final award on November 22, 2021.
Kaduna Electric later approached the Federal High Court in Abuja, seeking to set aside the arbitral award. It argued that the agreement was an illegal moneylending transaction because it included interest, while TCN had not shown that it possessed a moneylender’s licence.
TCN opposed the challenge and sought enforcement of the award, maintaining that extending credit or charging interest as part of legitimate commercial operations did not automatically turn a business into a moneylender.
On October 14, 2025, the Federal High Court rejected Kaduna Electric’s application and granted TCN leave to enforce the arbitral award.
At the Court of Appeal, the justices considered which arbitration law applied to the dispute, given that the agreement and award predated the Arbitration and Mediation Act 2023.
The appellate court held that the former Arbitration and Conciliation Act governed the relevant proceedings, taking account of the transitional provisions of the 2023 Act.
The court also emphasised that an arbitral award could only be challenged on grounds recognised by the applicable law.
On the question of judicial intervention, the appellate court held that enforcement proceedings are not an avenue for a court to sit on appeal over an arbitral tribunal’s decision or reconsider the substance of the dispute.
The court also rejected Kaduna Electric’s argument that the agreement was unlawful because TCN had not obtained a moneylender’s licence. It held that the company failed to establish that the transaction fell within the prohibited category, considering the statutory exception for lending undertaken in the course of a legitimate business whose principal object is not moneylending.
The justices further rejected the argument that describing the enforcement application as a counterclaim invalidated the proceedings, holding that a procedural error would not necessarily defeat an application where its substance was clear and no miscarriage of justice had been shown.
Related News:
Court Strikes Down 177% Default Fee
behind Games Village, Abuja
5A, CGH, Games Village, Abuja