Paris, August 16, 2024 — A French court has ordered the seizure of three jets owned by the Nigerian government, in an international dispute between the Chinese company Zhongshan Fucheng Industrial Investment, and a state in Nigeria. The legal wrangling, which stems from a terminated contract dating back to 2007, is an embarrassment to the Nigerian government and does not help its attempts at attracting foreign direct investment.
The controversy traces back to a 2007 agreement between Zhongshan Fucheng and Nigeria’s Ogun State government in the southwest. The contract was aimed at developing a free-trade zone that would host a massive industrial park designed to attract international investors. However, the deal unraveled between 2015 and 2016 when the Ogun State government terminated the agreement. Zhongshan has since claimed it was forced out through what it describes as a “campaign of illegal acts” by the Nigerian authorities.
The dispute entered a new phase when the Judicial Court of Paris granted Zhongshan the right to seize Nigerian assets overseas, leading to the grounding of three presidential planes that were in France for routine maintenance. The Nigerian government has vehemently condemned the seizures, accusing Zhongshan of orchestrating a wider campaign to confiscate its assets across various jurisdictions.
Bayo Onanuga, a spokesperson for Nigeria’s presidential office, stated that this move by Zhongshan was part of a broader strategy to “undercut and scam” the Nigerian government. He characterized the legal actions as “arm-twisting tactics” by the Chinese company, which has repeatedly sought to attach Nigerian assets abroad.
In March 2021, an arbitration tribunal chaired by the president of the UK Supreme Court awarded $74.5 million in compensation to Zhongshan. Ogun State has reportedly refused to pay this amount, leading to further legal actions. Nigerian-owned buildings in Liverpool were recently seized by a UK court as part of the same dispute, according to reports by the Premium Times. Additionally, last week, the United States Court of Appeals ruled that Zhongshan could continue its efforts to confiscate Nigerian assets abroad, dismissing Nigeria’s defense of “sovereign immunity.”
Nigeria’s government has been swift in its response, accusing Zhongshan of misrepresenting facts to courts in the UK, US, and France. Onanuga noted that when the Ogun State contract was revoked, Zhongshan had done little more than erect a perimeter fence on the land designated for the free-trade zone. This characterization contrasts with Zhongshan’s claim that the project was a significant international investment, even touted by the Economist Intelligence Unit.
The Nigerian authorities have assured the public that they are working to overturn the French court’s “frivolous order.” Both the federal government and Ogun State have released statements condemning Zhongshan’s actions as “ill-advised” attempts to seize Nigerian assets. “The Nigerian government will always work to protect our national assets from predators and shylocks who masquerade as investors,” the government declared.
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The ongoing dispute has sparked renewed public debate in Nigeria, particularly over the appropriateness of the president having multiple, taxpayer-funded jets at a time of severe economic hardship for ordinary citizens. Peter Obi, an opposition politician and former presidential candidate, called the news of the seized jets “embarrassing” and criticized the government for its perceived insensitivity to the struggles of Nigeria’s growing poor population.
The dispute also casts a shadow over the robust trade relations between Nigeria and China. China is Nigeria’s largest import partner, and both nations have strong economic ties. The seizure of the jets and the broader legal conflict could strain these relations, although it remains to be seen how this will impact future bilateral engagements.
This situation has once again brought to the fore the need for consistency between administrations. Many administrations in Nigeria, both at the federal and state levels, prefer to start their own agendas, discarding those of the previous administrations. These include among other things, contractual agreements such as the one with the Chinese firm.
All of these is not helped by the fact that the Nigerian courts are not trusted to deliver justice. With the absence of such trust, foreign investors will most definitely be wary of investing in the country.
Source: BBC