In 2001, Nigeria and China signed a bilateral investment treaty to foster commercial investments between the two nations. Subsequently, in 2007, Ogun State in Nigeria formed a joint venture with a Chinese company and another partner to establish the Ogun Guangdong Free Trade Zone (OGFTZ). This joint venture aimed to develop and manage the zone, including an industrial park managed by Zhongshan Fucheng Industrial Investment Co. Limited, a Chinese firm.
The agreement between Ogun State and Zhongshan faced issues when Ogun State terminated the contract in 2016. Zhongshan alleged that the termination was unjust and that it was owed compensation. After legal proceedings in Nigerian courts, which were discontinued in 2018, Zhongshan sought redress through arbitration. An arbitral tribunal awarded Zhongshan $74.5 million in compensation, which Ogun State has reportedly not paid.
In response, Zhongshan attempted to enforce the arbitration award internationally. The company obtained a French court order to seize three Nigerian presidential jets, including two Dassault Falcon 7X and Boeing 737 jets, as well as an Airbus 330 that Nigeria had purchased but not yet received. The jets were grounded in France in August 2024.
Zhongshan has also initiated legal actions in other countries, including the UK, USA, Belgium, Canada, France, Singapore, and the British Virgin Islands, seeking to identify and seize Nigerian assets. This global approach underscores Zhongshan’s determination to recover the awarded compensation.
The Nigerian Federal Government has responded by arguing that the jets are sovereign assets and should be immune from seizure under international law. The Attorney General and the National Security Adviser are working to challenge the French court’s orders and recover the jets. The Nigerian Presidency and Ogun State Government have both criticized Zhongshan’s actions, alleging fraud and a lack of proper disclosure in the legal process.
The Nigerian government and Ogun State are actively pursuing legal and diplomatic avenues to resolve the dispute and protect the country’s assets. Despite these efforts, Zhongshan continues to track and attempt to seize Nigerian assets abroad, highlighting the complex and contentious nature of international investment disputes.
This situation illustrates the challenges and risks associated with international investment agreements and the enforcement of arbitration awards.
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