The Presidency on Wednesday, said it would appeal a recent judgment by the British Virgin Islands High Court granting a Chinese company, Zhongshan Fucheng Industrial Investment Co. Ltd., the right to seize Nigeria’s foreign assets worth $25m.
The Special Adviser to the President on Policy Communications, Mr Daniel Bwala, disclosed this Wednesday night while responding to questions from journalists on the recent judgment.
“The ruling serves as a warning, and until Nigeria has the opportunity to enter its defence, the judgment cannot be enforced. We still have the chance to appeal and vacate the ruling”, Bwala said.
The presidential spokesman added, “We will continue to examine all options and take the necessary steps to address these legal challenges, ensuring that Nigeria’s rights and assets are preserved.
“This is not a judgment that will be enforced immediately. The Presidency remains committed to defending Nigeria’s interests.”
In August 2024, a French court sanctioned the seizure of three presidential jets—including the new Airbus A330, which Tinubu flew to France on Monday—amid a legal dispute between Zhongshan and the Ogun State Government.
The Chinese company had alleged a breach of contract by Nigeria in a deal dating back to 2007 under Governor Ibikunle Amosun.
The contract was signed by Zhongfu, a subsidiary of Zhongshan Fucheng and Ogun State, to develop a free trade area. Under the terms of the deal, Zhongfu was to own 60 per cent of the joint venture.
However, three years later, Zhongfu alleged that Ogun had backed out of the arrangement and wanted to take over the “significant” Chinese investment in the free trade zone.
The company said a “Campaign of illegal acts” against it ultimately forced it out of the agreement.
In 2018, Zhongshan initiated arbitration proceedings against Nigeria. A three-person arbitration panel in London awarded the company $70m in damages to be paid by the Nigerian government in 2021. The award has grown to about $81m with interest.
By this time, however, “All Zhongshan had done was build a perimeter fence around the free-trade zone,” the Presidency said in a statement in August narrating the trajectory of the dispute.
Based on legal advice, the Ogun State Government resolved to resist the enforcement of the award.
The resistance was successful in eight different jurisdictions. There are pending appeals against recognition orders issued in the US and UK.
Ogun State also engaged Zhongshan in settlement discussions on reasonable terms. The last meeting, held in September 2023 in London, lasted for three days and was attended by several officials of Ogun State, including Governor Dapo Abiodun and the Attorney General and Minister of Justice, Lateef Fagbemi.
According to the Presidency, Zhongshan’s initial reasonable readiness to consider Ogun State’s offer was surprisingly reversed by the second day when it insisted on the government paying the full arbitration debt.
“This led to a breakdown of the mediation, with parties agreeing to meet again in the first quarter of this year. Since then, Zhongshan has been evasive. Instead, it embarked on a series of enforcement proceedings, which the legal team appointed by the FGN and Ogun State successfully opposed.
“In cases similar to the present one, where Zhongshan obtained an ex-parte order, Ogun State successfully set aside the orders,” Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, revealed in an earlier statement.
It read, “Ogun State has not given up on a reasonable settlement option, with the most recent letter sent to Zhongshan last week. Zhongshan only responded after obtaining this latest illegal order.”
Zhongshan eventually released the seized aircraft, including the Airbus A330, after the Attorney General of the Federation and the National Security Adviser initiated legal and diplomatic moves to recover three of Nigeria’s presidential aircraft.
However, the company reportedly confiscated two residential structures in Liverpool, United Kingdom, belonging to Nigeria, with plans to sell the properties on eBay.
A recent verdict by the British Virgin Islands High Court granted Zhongshan the right to seize Nigeria’s foreign assets worth $25m.
In his judgement of November 8, 2024, Paul Webster, a judge at the British Virgin Islands High Court, ruled that Nigeria was not immune to execution of an arbitral award and subsequent judgment debt in favour of Zhongshan due to the wording of the underlying bilateral investment treaty concluded between China and Nigeria.
Webster held that a treaty term which provided that “both contracting parties shall commit to the enforcement of the award” constituted “a written consent of the Nigerian state.”
therefore, he held that, based on Section 13(3) of the State Immunity Act 1978, the British Virgin Islands must allow Zhongshan to enforce the judgment debt against Nigeria from the UK.
