Why a Chinese firm is seizing Nigerian assets abroad
A Chinese firm embroiled in a long-standing contractual dispute with the Nigerian government has recently begun seizing assets belonging to the country littered in some countries, including France, Canada and the United Kingdom.
The bone of contention sprouts from a negotiated agreement between the Chinese firm, Zhongshan Fucheng Industrial Investment and Nigeria's south-western Ogun State which dates back to 2007-2010.
The Agreement
In 2010, Zhongshan, through its parent company Zhuhai Zhongfu Industrial Group Co Ltd, obtained rights to develop sections of the Ogun Guangdong Free Trade Zone (OGFTZ) in Ogun State, Nigeria. To manage the project, the company established Zhongfu International Investment, a Nigerian entity, with the full approval of the Ogun State government in 2011.
In July 2016, the relationship between Zhongshan and the Ogun State government soured. The Chinese company accused the state government of abruptly attempting to terminate its appointment and replace it with a new management team for the free trade zone. The unexpected move led to a legal battle, with Zhongshan initiating investment treaty arbitration under the Bilateral Investment Treaty (BIT) between China and Nigeria in 2018. David Neuberger, a former president of the United Kingdom Supreme Court, chaired the arbitration.
Arbitral and judicial rulings
In March 2021, the arbitral tribunal ruled in favour of Zhongshan, determining that Nigeria had breached its obligations under the China-Nigeria BIT. The tribunal awarded Zhongshan approximately $70 million in compensation. Despite the ruling, Nigeria failed to make the payment, prompting Zhongshan to pursue enforcement through the UK courts.
In December 2021, the UK High Court issued an enforcement order against Nigeria, rejecting the country's argument of state immunity due to an exception under the State Immunity Act (SIA) 1978. This ruling paved the way for Zhongshan to take further legal action to recover the owed amount.
Seizure of Nigerian Assets
As Nigeria continued to resist payment, Zhongshan escalated its enforcement efforts. By June 2024, a London commercial court had granted the Chinese firm a charging order over two residential properties owned by Nigeria in Liverpool. The situation intensified as Zhongshan began seizing more valuable assets, including a Dassault Falcon 7X in Paris, a Boeing 737, and an Airbus A330, with a combined value exceeding $100 million.
The most recent seizure occurred on March 21, 2024, when Judge David Collier of the Superior Court of Quebec authorized the confiscation of a Bombardier 6000 jet in Canada. The aircraft, acquired for $57 million by Dan Etete, a fugitive involved in the controversial OPL 245 oil field sale, was taken under court order. The ruling allowed Zhongshan to seize not only the aircraft but also any proceeds from its sale, marking a significant step in the ongoing effort to enforce the arbitration award.
