Zhongshan Fucheng Industrial Investment Co. Limited has disagreed with the Nigerian government’s narrative following the temporary seizure of Nigeria’s presidential jets through a court case in Paris, France.
The rebuttal was disclosed in a statement on August 15, 2024.
The offices of the Attorney General of the Federation, Lateef Fagbemi (SAN), and the National Security Adviser (NSA) had disclosed that they had commenced legal steps to recover three presidential aircraft temporarily seized by a Paris court order in France.
What the Nigerian Government is saying
According to a statement from the Nigerian presidency, a contract between Ogun State and Zhongshan to manage a free-trade zone was executed in 2007.
The parties entered into a dispute in 2015, and arbitration began in 2016.
By 2019, the arbitration hearing had been concluded.
The Arbitral Panel awarded over 60 million USD against the Federal Government of Nigeria (FGN), a co-defendant, despite Zhongshan only building a perimeter fence around the free-trade zone.
The presidency raised concerns about an attempt by Zhongshan Fucheng Industrial Investment Co. Limited, a Chinese firm, to unlawfully seize Nigeria’s presidential jets and other offshore assets.
The AGF also confirmed that the temporary attachment was made pursuant to ex parte orders issued by the Judicial Court of Paris on March 7, 2024, and August 12, 2024, respectively, at the instance of Messrs. Zhongshan Fucheng Industrial Investment Co. Limited, a Chinese company seeking to enforce a Final Award granted in its favor on March 26, 2021, against one of Nigeria’s sub-nationals, Ogun State.
The AGF clarified that, although the dispute originated from engagements with the Ogun State Government, the consequential enforcement actions are being directed against the Federal Government and its assets in line with extant principles of international law, which hold that the actions of a subnational or local entity are attributable to the State or country itself.
The AGF statement reads:
“The Offices of the National Security Adviser and the Attorney General of the Federation have already set in motion both legal and diplomatic steps to ensure the discharge of the inappropriate orders against the aircraft, which are covered by sovereign immunity. While further actions are being put in place to resolve the entire dispute through available legal means, the firm position of the Federal Government remains that the aircraft in question are sovereign assets used solely for sovereign purposes and are therefore immune from attachment as Zhongshan has sought to do.”
Chinese firm’s reaction
Reacting to the development, the firm stated that Zhongshan has only sought to assert its rights under international law and is confident in its case.
It stressed that the independent arbitral panel passed verdicts in its favour, and courts in multiple countries have upheld the view that the panel’s compensation should be enforced.
“The French court was fully aware of the facts when it reached its decision. Far from being just a fence, the Ogun Free Trade Zone was featured as a significant international investment by the Economist Intelligence Unit.
“Zhongshan has for a long time been ready to enter serious negotiations with the Federal Government of Nigeria to settle this case and still awaits an indication that the government is equally willing,” the statement said, as quoted by Premium Times.
The reaction from the Chinese firm and the AGF implies that another round of legal battles is set to occur in foreign jurisdictions if there is no amicable resolution or out-of-court settlement.
More insights
Based on legal advice, the Ogun State Government resolved to resist the enforcement of the award. This resistance was successful in eight different jurisdictions.
There are pending appeals against recognition orders issued in both 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 three days and was attended by several officials of Ogun State, including Governor Dapo Abiodun and the Attorney General/Minister of Justice, Prince Lateef Fagbemi.
Zhongshan’s initial reasonable readiness to consider Ogun State’s offer was surprisingly reversed on 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. 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.