By The New Diplomat Intelligence Desk
A commercial court in London, United Kingdom (UK), has granted an order in favour of Zhongshan Fucheng Industrial Investment Co. Ltd, against the federal government over its failure to pay $70million to the former. That amount is roughly about N110bn.
The court in its ruling granted Zhongshan’s prayer to take over two residential properties owned by Nigeria in the UK.
The Master of the Court, Lisa Sullivan in her ruling held that the order was premised on the fact that the two properties have been converted to commercial use outside Nigeria’s diplomatic or consular activities in the UK.
The ruling came after Nigeria who was represented by Barrister Timi Balogun of the Squire Patton Boggs had argued before the court, opposing the order which ruled that the country is liable for a $70 million arbitration award in favour of Zhongshan Fucheng.
Nigeria in its appeal had argued that the charging orders should not be made final because the properties benefited from sovereign immunity.
Nigeria maintained that the properties are only “available to serve as premises for providing consular services to Nigerians in the Northwest of England” as well as residences for Nigerian officials or citizens or diplomatic events.
However, in her judgement, Sullivan held that the properties in question are being leased to residential tenants and that no “consular activities are taking place on the premises”.
She cited evidence regarding the “dilapidated” state of one of the properties, including “large electrical home appliances strewn across the front lawn”.
Sullivan also held that parties are “entitled to bring as many types of enforcement action as they see fit to recover their debt”.
She said Nigeria had not yet paid any of the award and that the value of the properties represented a “small proportion of it”.
The New Diplomat reports that the Chinese firm had approached the court seeking an order compelling Nigeria to pay a $70 million investment treaty award.
It would be recalled that trouble began in 2010 when Zhongshan, through Zhuhai Zhongfu Industrial Group Co. Ltd (Zhuhai), its Chinese parent company, acquired rights to develop a free trade zone in Ogun state.
A year later, Zhongshan set up Zhongfu International Investment (NIG) FZE (Zhongfu), a Nigerian entity, to manage the project under the permission of the Ogun state government.
However, events took a different turn in July 2016 when the company accused the Ogun state government of abruptly moving to terminate its appointment while attempting to install a new manager for the free trade zone.
Subsequently, Zhongfu initiated an investment treaty arbitration against Nigeria under the bilateral investment treaty between the People’s Republic of China and Nigeria (the China-Nigeria BIT).
The arbitrators had ruled that Nigeria was in breach of its obligations under the China-Nigeria BIT and awarded Zhongshan compensation of around $70 million.
In January 2022, the Chinese company initiated a case to seek enforcement of the arbitration award.
Nigeria pleaded state immunity but was turned away by Sara Cockerill, a high court judge, who said the country abused the time frame for appealing arbitral awards.
