The Nigerian Presidency has announced its intention to challenge a recent ruling by the British Virgin Islands High Court, which granted Chinese firm Zhongshan Fucheng Industrial Investment Co. Ltd. the authority to seize $25 million worth of Nigerian assets.
This legal battle stems from a contract dispute dating back to 2007, in which Zhongfu, a subsidiary of Zhongshan Fucheng, entered into an agreement with the Ogun State Government to develop a free trade zone. Zhongfu claims that Ogun State reneged on the deal, prompting the company to seek legal redress through arbitration in London.
The arbitration panel ruled in favor of Zhongshan, awarding the company $70 million in damages. With accrued interest, the total amount now stands at $81 million. In response to the ruling, Daniel Bwala, the Special Adviser to the President on Policy Communications, condemned the judgment, labeling it a serious warning for Nigeria. He confirmed that the federal government plans to appeal the decision, aiming to overturn the court’s order.
“We will continue to explore all available legal avenues to ensure the protection of Nigeria’s assets and uphold the integrity of our legal rights,” Bwala said, underscoring the government’s commitment to challenging the ruling.
This legal dispute echoes another significant case from August 2024, when a French court authorized the seizure of three Nigerian presidential jets, including the Airbus A330 recently acquired by President Bola Tinubu. However, the aircraft were eventually released after swift intervention by the Nigerian Attorney General and the National Security Adviser, who initiated both legal and diplomatic measures to resolve the issue.
Meanwhile, Zhongshan has already seized two Nigerian-owned residential properties in Liverpool, UK, and reportedly intends to sell them through online platforms such as eBay.
The British Virgin Islands High Court’s decision was based on the bilateral investment treaty between Nigeria and China, which requires both nations to enforce arbitration awards. The court interpreted this treaty as written consent from Nigeria to allow Zhongshan to enforce the judgment within the UK.
The dispute over the $25 million assets is part of a broader saga involving Zhongshan and the Ogun State Government. The two parties had previously engaged in discussions to settle the matter amicably, with the last round of talks occurring in London in September 2023. Governor Dapo Abiodun and the Attorney General and Minister of Justice, Lateef Fagbemi, were among the key figures present. However, the negotiations broke down after Zhongshan, initially open to a reasonable settlement, reversed its stance by demanding the full arbitration award.
“This shift led to the collapse of the mediation talks. Both parties agreed to reconvene in the first quarter of the following year, but since then, Zhongshan has been evasive, opting instead to pursue a series of enforcement actions,” explained Bayo Onanuga, President Tinubu’s Special Adviser on Information and Strategy.
Despite these setbacks, Ogun State has not abandoned the possibility of reaching a reasonable settlement. The state recently sent another letter to Zhongshan, proposing further negotiations. However, Zhongshan only responded after obtaining the most recent court order, which the Nigerian government considers illegal.
The ongoing dispute has placed the Nigerian government in a delicate position, with both legal and diplomatic efforts at the forefront of the battle to protect the country’s assets and reputation. As the case progresses, the Nigerian Presidency has reiterated its resolve to take all necessary steps to safeguard Nigeria’s interests both at home and abroad.
