FG Announces Line of Action as Court Orders Seizure of $25M Nigerian Properties to Chinese Firm

Seizure of $25M Nigerian Properties to Chinese Firm. 

The Nigerian Presidency has announced its intention to appeal a British Virgin Islands High Court ruling that granted Chinese firm Zhongshan Fucheng Industrial Investment Co. Ltd. the authority to seize $25 million worth of Nigeria’s foreign assets.

This legal battle originates from a 2007 agreement between Zhongfu, a subsidiary of Zhongshan, and the Ogun State Government to develop a free trade zone. Alleging breach of contract by Ogun State, Zhongfu sought arbitration in London.

Arbitration and Legal Ruling

A London arbitration panel awarded Zhongshan $70 million in damages, which has since risen to $81 million with interest. The British Virgin Islands court upheld this award, citing the bilateral investment treaty between China and Nigeria as the basis for enforcing the judgment.

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In August 2024, a French court allowed Zhongshan to seize three Nigerian presidential jets, including an Airbus A330 recently purchased by President Bola Tinubu. While the jets were later released after diplomatic negotiations, Zhongshan has already confiscated two residential properties in Liverpool, UK, which it plans to sell.

Government’s Reaction

Special Adviser to the President on Policy Communications, Daniel Bwala, confirmed Nigeria’s plan to challenge the ruling, emphasizing the government’s commitment to protecting national assets.

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“We will continue to examine all options and take necessary steps to address these legal challenges, ensuring Nigeria’s rights and assets are preserved,” Bwala stated.

Mediation Attempts

Settlement discussions between Zhongshan and the Ogun State Government were held as recently as September 2023 in London. Despite some initial progress, negotiations collapsed when Zhongshan insisted on full payment of the arbitration debt.

According to the Presidency, Zhongshan has since pursued enforcement actions while avoiding further settlement talks. The Ogun State Government maintains its openness to a reasonable resolution.

Next Steps

The Nigerian government plans to leverage all legal and diplomatic avenues to vacate the judgment and mitigate its impact on the country’s assets.

Stay tuned for updates on this developing story.