SAHARA REPORTERS
The United States Supreme Court is set to discuss Nigeria’s legal battle with Zhongshan Fucheng Ltd on January 10, 2025.
The court will examine Nigeria’s petition to overturn lower court rulings and avoid paying $70 million in damages to Chinese investors.
Peoples Gazette reports that the dispute began when Zhongshan investors claimed they were detained for weeks after the Ogun State governor, Ibikunle Amosun, backed out of a free trade zone deal.
In 2001, China and Nigeria signed a bilateral investment treaty aimed at promoting commercial investment between the two countries.
In 2007, Ogun State reportedly entered into a joint venture agreement with a Chinese company and another company to create the Ogun Guangdong Free Trade Zone Company. The Nigeria Export Processing Zones Authority, a Federal Government entity that oversees free-trade zones in Nigeria, then delegated control and operation of the free-trade zone to the company.
In 2010, the Ogun Guangdong Free Trade Zone Company contracted with Zhongshan’s parent company to develop an industrial park in the free-trade zone. The goal was for Zhongshan’s parent company to develop the park and build factories in it for tenants to use.
In the first half of 2016, however, the agreement between both parties was terminated, leading to Zhongshan filing lawsuits in Nigerian federal and state courts seeking reinstatement of its contractual rights but the legal proceedings were discontinued in Spring 2018.
Sometime in August, news filtered the air that a French court, had authorised the seizure of three of Nigeria’s presidential jets, two of the jets – a Dassault Falcon 7X and a Boeing 737 – are part of Nigeria’s presidential air fleet that were recently put up for sale and the third, an Airbus 330 purchased by Nigeria, but not yet delivered.
Zhongshan had again dragged Ogun to court, where an independent arbitral tribunal, chaired by the former President of the UK Supreme Court, awarded the Chinese firm $74.5m compensation, which Ogun was yet to pay.
Nigeria, under President Bola Tinubu, subsequently filed a writ of certiorari, asking the Supreme Court to review their arguments and potentially overturn the lower court rulings.
The Nigerian government is seeking to avoid paying the damages, which the Chinese investors are trying to enforce through the US courts, specifically by withdrawing the funds from Nigeria’s crude earnings account in JP Morgan.
The U.S. Supreme Court said the case had been distributed to justices ahead of a conference on the matter on January 10, days after Chinese investors waived their right to respond to Nigeria’s certiorari petition.
The top court is Nigeria’s last resort to resolve the matter with the Supreme Court’s decision likely to bring an end to the protracted dispute and debates surrounding the seizure of Nigeria’s international assets.
Mr Amosun, who landed Nigeria in the mess, has been mostly quiet since he released a statement in August admitting he mistakenly signed away the multi-billion naira Ogun trade zone agreement without thoroughly reviewing its terms.
He claimed that he was deceived by the Chinese investors from Zhongshan Fucheng.
Governor Dapo Abiodun, through his Special Adviser on Media and Strategy, Kayode Akinmade, had faulted the decision describing it as “the new antics by the Chinese company to appropriate Nigerian assets in foreign jurisdictions, as past efforts had continually failed.”
“On 14 August 2024, the attention of the Ogun State Government was drawn to the provisional attachment of three Nigerian government-owned aircraft in France by the Chinese company, Zhongshan Fucheng Industrial Investment Co. Ltd. (Zhongshan),” a statement by the governor read.
“Ogun State also learned of two orders of the Judicial Court of Paris dated 7 March 2024 and 12 August 2024 respectively, both obtained by Zhongshan without notice being duly given to the Federal Government of Nigeria, Ogun State or their legal counsel.
“This is the latest in a series of ill-advised attempts by Zhongshan to attach Nigerian-owned assets in foreign jurisdictions, none of which have to date led to the recovery of any sums from Nigeria.
“Each of the three aircraft is used solely for sovereign purposes and as such are immune from attachment under international and French laws.
“In obtaining the provisional attachments, Zhongshan deliberately withheld information from the Federal Government of Nigeria, Ogun State and their legal counsel.
“Just like the P&ID case, this is another unfortunate case of unscrupulous individuals masquerading as foreign investors with the sole aim of defrauding Ogun State and Nigeria.
“It should be recalled that the underlying contract between Ogun State and Zhongshan was executed in 2007, 12 years before the present administration, for the management of a free-trade zone. The parties entered into a dispute in 2015 with arbitration commencing in 2016.”
It added, “By 2019, when the current State Administration took office, the hearing at the arbitration had been all but concluded. The Arbitral Panel awarded over 60 million USD against the Federal Government of Nigeria (FGN) which was a co-Defendant, when all Zhongshan had done was to build a perimeter fence around the free-trade zone. Needless to say this was a bad/unfair decision.
“The present State Administration could not in all good conscience allow such an unconscionable and baseless decision, which would dissipate the commonwealth of the good people of Ogun State, to stand.
“Accordingly, and based on erudite legal advice, this Administration resolved to resist the enforcement of the award. The resistance was successful in eight different jurisdictions. Currently, there are pending appeals against recognition orders issued in both the US and UK,” the statement read.
THIS ARTICLE ORIGINALLY APPEARED IN SAHARA REPORTERS
