Attempt by Chinese Company to Seize Nigeria’s Foreign Assets Fraudulent – Presidency
The Nigerian Presidency has vehemently disputed a Chinese company’s attempt to seize three presidential jets over a contract dispute, calling it a “fraudulent” and “unorthodox” move.
Neusroom earlier reported that Zhongshan Fucheng Industrial Investment Co. Ltd., the Chinese company, obtained a court order in Paris to seize some of Nigeria’s foreign assets, including three presidential jets. However, the Nigerian government has claimed that the company misled the court and withheld vital information.
According to a statement by Presidential Aide, Bayo Onanuga, the company obtained the order by misleading the court and withholding information.
“The Presidency is aware of the various failed attempts by a Chinese company, Zhongshan Fucheng Industrial Investment Co. Limited, to take over offshore assets of the Federal Government of Nigeria through subterfuge,” Onanuga said.
He added that the Federal Government of Nigeria is not under any contractual obligation with Zhongshan and that the dispute is between the company and the Ogun State Government.
“The Federal Government is not under any contractual obligation with the company. The case in which Zhongshan tries to use every unorthodox means to strip our offshore assets is between the company and the Ogun State Government,” Onanuga said in the statement.
The dispute stems from a 2007 contract between Zhongshan and the Ogun State Government to develop a free trade zone. However, the project was terminated in 2015, and Zhongshan initiated arbitration proceedings, resulting in a $70 million award against Nigeria.
The Presidency argues that Zhongshan has no solid ground to demand restitution and that the company’s actions are similar to those of other foreign entities that have tried to defraud Nigeria.
The statement added that the “arm-twisting tactic by the Chinese company is the latest in a long list of failed moves to attach Nigerian government-owned assets in foreign jurisdictions.”
Onanuga emphasized that the Nigerian government is working with the Ogun State government to reach an amicable resolution.
“We want to assure Nigerians that the Federal Government is working with the Ogun State Government to discharge this frivolous order in Paris immediately,” the statement noted.
What You Should Know About The Legal Battle Between Chinese Company Zhongshan and Ogun State Government
The dispute between Ogun State and Zhongshan began over a contract executed in 2007 for the management of a free trade zone in Ogun State. The conflict escalated in 2015, leading to arbitration proceedings in 2016.
By 2019, the arbitration hearing concluded with an Arbitral Panel awarding over $60 million against the Federal Government of Nigeria (FGN), a co-defendant in the case. This hefty sum was granted despite Zhongshan’s minimal work, which only involved building a perimeter fence around the trade zone.
Ogun State, acting on legal advice, decided to challenge the enforcement of this award. The state’s resistance proved successful across eight different jurisdictions, though appeals against recognition orders are still pending in the U.S. and the U.K.
The Nigerian government claimed that despite the legal battles, Ogun State showed a willingness to engage in settlement talks on reasonable terms. The last significant meeting took place in September 2023 in London, attended by high-ranking officials, including Governor Dapo Abiodun and Attorney General/Minister of Justice, Prince Lateef Fagbemi.
Initially, Zhongshan seemed open to negotiation but abruptly reversed its stance, demanding full payment of the arbitration debt. This led to a breakdown in mediation, though both parties agreed to reconvene in the first quarter of this year.
However, Zhongshan has been accused of becoming evasive, opting instead to pursue enforcement proceedings that Ogun State has successfully opposed in various courts.
