Mary Onyia
As part part of a dispute with a Chinese company, Zhongshan Fucheng Industrial Investment Co. Limited, a French court has ordered that three presidential jets belonging to the Nigerian government be seized, following an allegation of breach of contract instituted by the Chinese firm.
The case in France points to a contract signed by Zhongfu, a subsidiary of Chinese investment company, Zhongshan Fuscheng Industrial investment and Ogun state government in Nigeria in 2013 for the development of a free trade zone, with Zhongfu owning 60 per cent of the joint venture.
Zhongfu alleged Ogun had backtracked from the deal, thereby, ultimately, forcing the Chinese firm out of the agreement.
Consequently, Zongshan had started a legal proceedings against Nigeria in 2018 and the firm was awarded $70 million in damages to be paid by the Nigerian government in 2021. The amount has since ballooned to $80 million with interest, according to reports by the Financial Times.
Similarly, a court in London has also granted Zhongshan an enforcement order against two UK properties owned by the Nigerian government worth between 1.3 and 1.7 million pounds.
The Chinese company had also reportedly instituted legal proceedings in about eight jurisdictions globally, regarding the dispute. The other countries include Belgium, Canada, France, Singapore and the British Virgin Islands.
However, the Nigerian government has reportedly vowed to do all in its power to protect its foreign assets from ‘predators’ stressing that the jets in Paris could not be seized because they were protected by diplomatic immunity. This is coming after the Chinese company got an injunction to ground three jets belonging to Nigerian government.
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.
However, a French court, recently, 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.
The court order is intended to prevent Nigeria from moving or selling the presidential jets until the Chinese firm was paid the $74.5m by Ogun, its sub-national.
With additional report from the Punch