Zhongshan Fucheng Industrial Investment Co. Ltd, a Chinese company, has expressed its readiness to resolve the dispute with Nigeria.
A Paris court recently ordered the seizure of Nigeria’s assets, including three aircraft, due to the contract disagreement.
The court decided that the Chinese company should use Nigeria’s jets at the Paris-Le Bourget and Basel-Mulhouse international airports as collateral for its claim of EUR 74,459,221.
BACKGROUND
In 2010, Zhongshan, through its Chinese parent company Zhuhai Zhongfu Industrial Group Co. Ltd. (Zhuhai), acquired rights to develop a free trade zone in Ogun state.
A year later, Zhongshan established Zhongfu International Investment (NIG) FZE (Zhongfu), a Nigerian entity, to oversee the project with the approval of the Ogun state government.
However, in July 2016, the investor accused the state government of abruptly terminating its appointment and trying to install a new manager for the free trade zone.
Subsequently, Zhongfu initiated an investment treaty arbitration against Nigeria under the China-Nigeria BIT.
The arbitrators ruled that Nigeria breached its obligations under the China-Nigeria BIT and awarded Zhongshan compensation of around $70 million.
In January 2022, the Chinese company filed a case to enforce the arbitration award.
Nigeria claimed state immunity but was rejected by a UK high court judge, Sara Cockerill, citing an abuse of the time frame for appealing arbitral awards.
On August 9, a US appellate court upheld the judgment that the arbitration award is enforceable, rejecting Nigeria’s sovereign immunity defence.
‘READY TO SETTLE THIS CASE’
The presidency accused the Chinese firm of using unconventional means to seize assets.
Denying the allegations in a statement to Premium Times, Zhongshan stated that it has always sought to assert its rights under international law and is confident in its case.
“The independent arbitral panel unanimously ruled in our favor, and courts in multiple countries have upheld the enforcement of the compensation awarded by the panel. The French court was fully informed when making its decision,” the firm said.
“The Ogun Free Trade Zone was recognized as a significant international investment by the Economist Intelligence Unit.
“Zhongshan has been prepared for serious negotiations with the Nigerian government to settle this case and is waiting for a response indicating the government’s willingness to do the same.”