The Court of Appeal has dismissed an appeal by Kaduna Electricity Distribution Company Plc against the Transmission Company of Nigeria (TCN), ruling 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 appellate court also affirmed that courts cannot use proceedings to enforce an arbitral award as an opportunity to rehear the dispute already decided by an arbitration panel.
In its judgment delivered on October 30, 2026, in Kaduna Electricity Distribution Company Plc v. Transmission Company of Nigeria Plc, the court upheld the Federal High Court’s decision refusing to set aside an arbitral award in TCN’s favour.
The panel, led by Justice Ibrahim W. Jauro, with Justices Mohammed Danjuma and Ntong Festus Ntong concurring, dismissed the appeal and awarded ₦500,000 in costs against Kaduna Electric.
The dispute arose from a Deferred Payment Agreement entered into by the parties on March 16, 2018. The agreement led to arbitration, which produced a final award on November 22, 2021.
Kaduna Electric later approached the Federal High Court in Abuja, seeking to nullify the award. It argued that the agreement was an illegal moneylending transaction because it included interest, while TCN had not shown that it held a moneylender’s licence.
TCN opposed the challenge and sought enforcement of the award. It maintained that extending credit or charging interest as part of legitimate commercial operations does 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 award.
At the appeal, the court 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 2023 Act’s transitional provisions. It also stressed that an arbitral award could only be challenged on grounds recognised by the applicable law.
The court reiterated that judicial intervention in arbitration is limited. Enforcement proceedings, it said, are not a platform for a court to sit on appeal over an arbitral tribunal’s decision or reopen the substance of the dispute.
On the moneylending issue, the court held that Kaduna Electric had failed to prove that the agreement was unlawful. It also considered the statutory exception for lending carried out in the course of a legitimate business whose principal object is not moneylending.
The justices further rejected the argument that describing an enforcement application as a counterclaim invalidated the proceedings, noting that a procedural error would not necessarily defeat an application where its substance was clear and no miscarriage of justice had been shown.
The court consequently affirmed the Federal High Court’s decision and dismissed Kaduna Electric’s appeal in full.
The ruling reinforces the principle that interest-bearing commercial arrangements do not automatically fall within moneylending restrictions, while underscoring the courts’ limited role in reviewing arbitral awards.
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