In the midst of an ongoing dispute with a Chinese firm, a French court has seized Nigerian government jets.
An important breakthrough in a long-running legal issue involving a Chinese corporation has led to the seizure of three planes owned by the Nigerian government by a French court. Disputes like these originate from a 2007 free-trade zone agreement between Zhongshan Fucheng Industrial Investment and Ogun State in southwestern Nigeria. Building a massive industrial park to entice international investors and stimulate regional economies was the stated goal of the project.
Where the Conflict Started
In 2015 and 2016, under contentious circumstances, Zhongshan Fucheng and Ogun State dissolved their arrangement. Subsequently, the Chinese firm claimed that the Nigerian government had committed a string of “illegal acts” to force it out of the project. Significant financial losses were caused by these measures, according to Zhongshan, which damaged the integrity of the deal.
The Chinese corporation is reportedly quite unhappy about the termination and has accused Nigeria of acting with hidden agendas in order to defraud and undermine the company, so rendering the contract null and void, according to the Financial Times.
The Capture of Nigerian Aircraft
Zhongshan Fucheng used directives from the Judicial Court of Paris to confiscate foreign assets owned by the Nigerian government as a response to the continuing conflict. Consequently, three presidential planes were forced to stay in France for maintenance. Zhongshan is allegedly engaged in a larger operation to unfairly target and confiscate assets in foreign countries, and the Nigerian government has denounced the confiscation, claiming as much.
Response from the Nigerian Government
Bayo Onanuga, a spokesman for the Nigerian government, has harshly slammed Zhongshan’s conduct, calling the seizure a last-ditch “arm-twisting tactic.” According to Onanuga, the Chinese firm has been unsuccessful in multiple foreign jurisdictions in its pursuit of assets owned by the Nigerian government. In addition, he reaffirmed Nigeria’s government’s stance on safeguarding the country’s wealth from “predators and shylocks masquerading as investors.”
Compensation and Legal Actions
In March 2021, the controversy reached a boiling point when Zhongshan Fucheng was granted $74.5 million in compensation by an arbitration tribunal that was overseen by the president of the UK Supreme Court. According to reports, the Chinese corporation took further legal action after Ogun State still failed to pay the sum, notwithstanding this verdict. According to reports from the Nigerian website Premium Times, a UK court recently seized properties in Liverpool that were owned by Nigerians as part of the same issue.
A recent ruling by the US Court of Appeals favored Zhongshan, so the business can keep trying to seize assets abroad that belong to Nigeria. The court’s rejection of Nigeria’s “sovereign immunity” position further muddied waters for the country’s leadership.
Accusations of Deception
The government of Nigeria publicly accused Zhongshan of misleading British, American, and French courts. The Chinese company, according to Bayo Onanuga, had barely begun to construct the free-trade zone’s perimeter fence when the agreement was dissolved. He said that Zhongshan had misled and overstated the amount of money they had invested in the project.
The Importance of Nigeria’s Free-Trade Zones
Areas that have been declared as free-trade zones allow for the import, storage, and export of products with reduced or eliminated taxes and duties. In order to increase economic activity and attract international investments, these zones are strategically crucial. Among these zones in Nigeria, one stands out in Lagos—the site of the Dangote Petroleum Refinery—recently inaugurated by Africa’s wealthiest man, Aliko Dangote. The continuing conflict has dampened expectations for the Ogun Free Trade Zone, which was supposed to be another major center for foreign investment.
Zhongshan’s Role
Zhongshan Fucheng responded to the allegations made by the Nigerian government by releasing a statement in which it claimed the Ogun Free Trade Zone was more than simply a perimeter fence. The project’s recognition as a major international investment by the Economist Intelligence Unit was underlined by the corporation, who wanted to stress how important the development was.
Additional Consequences
Many Nigerians are wondering why the country needs so many taxpayer-funded presidential flights in light of the country’s dire economic situation, and this has prompted a broader public debate in Nigeria following the French seizure of the planes. Some feel that the government isn’t putting the needs of its struggling citizens first. The “embarrassing” scenario is a reflection of a lack of concern for the increasing economic struggles that ordinary Nigerians are experiencing, according to opposition leader Peter Obi, who was a failed presidential candidate in 2023.
In summary
The complexity of multinational contracts and the possibility for difficulties when such agreements are terminated are highlighted by the continuing dispute between Nigeria and Zhongshan Fucheng. The recent grounding of presidential jets in France and the seizure of assets overseas by Nigeria are examples of the diplomatic and legal difficulties that can result from unresolved business issues. The Chinese firm is looking for legal options to recoup its losses, while the Nigerian government is determined to safeguard the country’s assets no matter what happens. This conflict is expected to have far-reaching consequences for Nigeria’s foreign policy and ties with other countries.
