By Gideon Maxwell
August 15, 2024
A French court has ordered the seizure of three aircraft associated with the Nigerian government, including a Dassault Falcon 7X, a Boeing 737, and an Airbus A330, valued at over $100 million.
This action follows a legal dispute involving Zhongshan Fucheng Industrial Investment Co. Ltd., a Chinese company, and the Ogun State government over a revoked contract from 2016.
The court’s decision was based on an arbitration ruling that awarded Zhongshan approximately $74.5 million due to the Ogun State government’s failure to honour the contract.
The jets, currently undergoing maintenance in Paris and Switzerland, are restricted from movement until the award is paid.
The Nigerian government has criticised the seizure, asserting it has no contractual obligations to Zhongshan and plans to contest the court’s decision, claiming the company misled the court.
Contractual dispute
In 2010, Zhongshan’s parent company, Zhuhai Zhongfu Industrial Group Co. Ltd., entered into a partnership with Ogun State to develop the Ogun Guangdong Free Trade Zone.
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However, in July 2016, the Ogun State government terminated Zhongshan’s management contract, leading to claims of contractual breaches and illegal actions against the company.
Zhongshan subsequently initiated arbitration proceedings under the bilateral investment treaty between Nigeria and China.
Arbitration rulings
In March 2021, an arbitration tribunal awarded Zhongshan approximately $55.7 million, plus interest and legal costs, citing Nigeria’s breach of obligations under the treaty.
Despite Nigeria’s attempts to assert state immunity, courts in the UK ruled against these claims, stating that Nigeria failed to meet the necessary deadlines for appeals.
Recent developments
The French court’s ruling to seize the jets is a direct consequence of Nigeria’s failure to comply with the arbitration award.
The jets, which were undergoing maintenance at Paris-Le Bourget and Basel-Mulhouse airports, are now restricted from movement, sale, or purchase until Zhongshan receives the owed compensation.
This situation is compounded by the recent seizure of Nigerian properties in Liverpool, England, related to the same dispute.
Government response
The Nigerian government has publicly stated that it has no contractual obligations to Zhongshan and is contesting the court’s decision.
The Presidency emphasised that the dispute is between Zhongshan and Ogun State, asserting that it is actively seeking an amicable resolution.
Critics, including political figures like Peter Obi, have condemned the situation as an embarrassment and a reflection of leadership failures in Nigeria.
This ongoing legal battle highlights the complexities of international business agreements and the repercussions of local governmental decisions on national assets.
