The Ogun state government has condemned “the provisional attachment” of three Nigerian government-owned aircraft in France by Zhongshan Fucheng Industrial Investment Co. Ltd., a Chinese firm, News About Nigeria reports.
A provisional attachment is a temporary legal measure that allows a court to seize or freeze assets pending the outcome of a legal dispute.
A Paris court recently ordered the seizure of three jets belonging to the Nigerian government over a dispute involving an arbitration award in favour of the Chinese firm.
The court ruled that the Chinese firm should use the three jets at the Paris-Le Bourget and Basel-Mulhouse international airports “as security for its claim of EUR 74,459,221”.
In a statement on Wednesday, Kayode Akinmade, media adviser to the Ogun governor, said the “order” was obtained without notice to the federal government, state, or their legal counsel.
Akinmade described the move as the latest in a series of “ill-advised attempts” by Zhongshan to attach Nigerian-owned assets abroad, which have not resulted in any recoveries.
“Each of the three aircraft is used solely for sovereign purposes and, as such, is immune from attachment under international and French laws,” the statement reads.
“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.
“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 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 8 different jurisdictions. Currently, there are pending appeals against recognition orders issued in both the US and UK.”
BACK STORY
In 2010, Zhongshan, via its parent company, Zhuhai Zhongfu Industrial Group Co. Ltd, obtained the rights to develop a free trade zone in Ogun state.
The following year, Zhongshan established Zhongfu International Investment (NIG) FZE to oversee the project with the state government’s approval.
However, in July 2016, the company alleged that the state government suddenly terminated its contract and attempted to appoint a new manager for the free trade zone.
As a result, Zhongfu initiated arbitration proceedings against Nigeria, citing violations of the bilateral investment treaty between China and Nigeria.
The arbitrators found Nigeria in breach of the treaty and awarded Zhongshan approximately $70 million in compensation.
Nigeria claimed sovereign immunity, but UK High Court Judge Sara Cockerill dismissed this, stating that Nigeria had missed the appeal deadline.
In 2023, the UK Court of Appeal upheld the $70 million arbitration award in favour of Zhongshan, with Presiding Judge Julian Flaux ruling that Nigeria had failed to meet the required deadline to raise the issue of state immunity.
