Zhongshan Fucheng Industrial Investment Co. Ltd, a Chinese firm entangled in a high-profile legal dispute with Nigeria, has expressed its readiness to negotiate a resolution following a Paris court’s recent order to seize Nigerian assets, including three aircraft, over a contract disagreement.
The court’s decision came after Zhongshan sought enforcement of a €74,459,221 arbitration award against Nigeria. The assets seized include Nigeria’s jets stationed at the Paris-Le Bourget and Basel-Mulhouse international airports, which the court ruled could be used as security for the Chinese firm’s claim.
The origins of the dispute date back to 2010 when Zhongshan, through its parent company Zhuhai Zhongfu Industrial Group Co. Ltd., acquired rights to develop a free trade zone in Ogun State, Nigeria. The project was managed by Zhongfu International Investment (NIG) FZE (Zhongfu), a Nigerian subsidiary of Zhongshan, established with the Ogun State government’s permission.
However, in July 2016, tensions escalated when the Ogun State government allegedly attempted to terminate Zhongfu’s management contract abruptly, leading to the installation of a new manager. In response, Zhongfu initiated an investment treaty arbitration against Nigeria under the China-Nigeria Bilateral Investment Treaty (BIT), resulting in an arbitral panel ruling in Zhongshan’s favor and awarding the company around $70 million in compensation.
Despite Nigeria’s attempts to claim state immunity, courts in multiple countries, including a UK High Court and a US appellant court, upheld the arbitration award, rejecting Nigeria’s defense.
The Chinese firm has since pursued legal avenues to enforce the award, culminating in the recent asset seizure order by the Paris court.
In a statement, Zhongshan refuted allegations from the Nigerian presidency that it had employed “unorthodox and subterfuge” methods to seize the assets.
The firm asserted that it has “only ever sought to assert its rights under international law” and remains confident in its legal standing.
“The independent arbitral panel found unanimously in its favour, and courts in multiple countries have upheld the view that the panel’s compensation should be enforced. The French court was fully aware of the facts when it reached its decision,” Zhongshan stated.
Zhongshan further emphasized its long-standing willingness to engage in serious negotiations with the Nigerian government to resolve the matter amicably, expressing hope that the government would reciprocate this willingness.
The ongoing dispute underscores the complexities and potential pitfalls of international investment agreements, as well as the significant financial and diplomatic stakes involved for both parties.
As tensions rise, the prospect of an amicable resolution may hinge on both sides’ willingness to engage in constructive dialogue.