… Presidency accuses firm of planning to arm-twist Nigeria
Three aircraft belonging to the Nigerian presidential fleet have been seized in France and Switzerland following a court order.
The seizure was initiated by Zhongshan, a Chinese company embroiled in a long-standing legal dispute with Ogun State over the management of an export processing zone.
The seized jets include a Dassault Falcon 7X in Paris, a Boeing 737, and an Airbus A330 valued at over $100 million. The latter two are currently undergoing maintenance in Switzerland.
Zhongshan was awarded $74.5 million in damages after a court ruled in its favour over the contract termination by Ogun State. The seizure of the presidential jets is part of the company’s efforts to recover this amount.
Here’s a timeline of the events from the investment deal to the legal battles:
2001: China and Nigeria signed a bilateral investment treaty to encourage investment between the two countries.
2010: Zhongshan Fucheng Industrial Investment, through its parent company Zhuhai Zhongfu Industrial Group, acquired rights to develop the Ogun Guangdong Free Trade Zone (OGFTZ) in Ogun State, Nigeria.
2011: Zhongshan set up a local entity, Zhongfu International Investment (NIG) FZE, to manage the development of the free trade zone. The Chinese firm then carried out several works, including the development of infrastructure such as roads, sewerage and power networks, within the zone.
2012: Ogun State appointed Zhongfu as the interim manager of the OGFTZ.
2013: A joint venture agreement was signed, making Zhongfu the permanent manager of the OGFTZ and giving it a majority shareholding in the project.
2016: Ogun State abruptly terminated Zhongfu’s appointment and took actions to expel the company from Nigeria, including harassment of its executives and revocation of immigration papers.
2017: Zhongshan initiated arbitration proceedings against Nigeria, claiming breach of the bilateral investment treaty.
2021: On 26 March 2021, the tribunal, chaired by Lord Neuberger, the former president of the UK Supreme Court, ruled that Nigeria breached its obligations under the China-Nigeria BIT and issuing a final award of $55,675,000 in addition to an interest of $9.4 million and costs of £2,864,445 payable by Nigeria to Zhongshan. The total amount is about $70 million.
All efforts by the federal government to amicably resolve the dispute between Ogun State and the Chinese firm were fruitless.
2023: Nigeria sought state immunity in a legal case but was denied by the High Court in the UK, which ruled that the country had exceeded the time limit for appealing arbitral awards.
In July 2023, the UK Court of Appeal upheld a $70 million arbitration award against Nigeria.
As part of its efforts to recover the funds, the company secured interim charging orders over the two Liverpool properties owned by the Nigerian government in June and August 2022.
Nigeria argued that the properties were used for consular services and as residences for Nigerian officials, thus granting them immunity from seizure.
However, the court dismissed this claim, finding that the properties had not been used for diplomatic purposes in over 34 years. Evidence presented showed one property to be in a dilapidated state, with no consular activities taking place on either property.
2024: The United States Court of Appeals for the District of Columbia affirmed the enforceability of the arbitration award.
Nigeria challenged the enforcement but the court held that it had the jurisdiction to enforce the arbitral award under the US Foreign Sovereign Immunities Act.
August 2024: Nigerian jets were seized in France as part of efforts to enforce the arbitration award against Nigeria.
Presidency fires back at Chinese firm
Meanwhile, the Presidency, on Thursday, said Zhongshan Fucheng Industrial Investment Co. Limited is trying to arm-twist the Nigerian government to take over offshore assets of the federal government of Nigeria through subterfuge.
Bayo Onanuga, special adviser to the president on information and strategy, explained that the Federal Government is not under any contractual obligation with the company.
Onanuga, in a statement, said the case in which Zhongshan is trying to use every unorthodox means to strip Nigeria’s offshore assets is between the company and the Ogun State government.
He noted that the federal government is fully aware of efforts being made by the Ogun State Government to reach an amicable resolution on the matter.
“It must be said without any equivocation that Zhongshan has no solid ground to demand restitution from the Ogun State Government based on the facts regarding the 2007 contract between the company and the State Government to manage a free-trade zone,” Onanuga said.
He revealed that as at the time the contract with Ogun State was revoked in 2015, the company had only erected a perimeter fence on the land earmarked for a free trade zone.
“While the Attorney-General of the Federation and Minister of Justice is working with the Ogun State Government on an amicable resolution, Zhongshan obtained two orders from the Judicial Court of Paris dated March 7, 2024, and August 12, 2024, without any notice being duly served on the Federal Government of Nigeria and Ogun State Government.
“This arm-twisting tactic by the Chinese company is the latest in a long list of failed moves to attach Nigerian government-owned assets in foreign jurisdictions.
“The material facts in the transaction between the Ogun State Government and Zhongshan point to another P&ID case in which unscrupulous and questionable individuals falsely present themselves as investors with the sole objective of undercutting and scamming Governments in Africa.
“Undoubtedly, Zhongshan withheld vital information and misled the Judicial Court in Paris into attaching the Nigerian government’s presidential jets, which are on routine maintenance in France. The use and nature of the Presidential jets as assets of a Sovereign entity whose assets are protected by diplomatic immunity forbid any foreign Court from issuing an order against them.
“We are convinced the Chinese company misled the Judicial Court of Paris regarding the use and nature of the assets it seeks to attach and did not fully disclose to the court as required by law.”
He stated that the same Chinese company had tried to enforce its questionable judgment in the UK and USA but failed.
“Like the P&ID case, foreign companies are trying to defraud Nigeria with the collaboration of some bureaucrats. Zhongshan appeared to have sold the judgment they got to a venture capitalist seeking to make money by embarrassing the Federal Government and President Bola Tinubu.”
The Presidency assured Nigerians that the Federal Government is working with the Ogun State Government to discharge this frivolous order in Paris immediately.
“Nigerian Government will always work to protect our national assets from predators and shylocks who masquerade as investors,” Onanuga added.
(BusinessDay)
