The Ogun State Government and Zhongshan Fucheng Industrial Investment Company Limited have been embroiled in a prolonged legal battle concerning the management of an export processing zone in southwestern Nigeria. This dispute escalated to the point where three Nigerian presidential jets—a Dassault Falcon 7X, a Boeing 737, and an Airbus 330—were seized following a court judgment in favor of Zhongshan.

HOW IT STARTED

In 2007, the Ogun State Government entered a joint venture with Zhongshan and another company to establish the Ogun Guangdong Free Trade Zone Company. However, by mid-2016, the partnership deteriorated, leading Zhongshan to seek legal redress in Nigerian courts to restore its contractual rights, but these efforts were unsuccessful.

Zhongshan subsequently pursued the case in a French court, which awarded the company $74.5 million in damages. The French court further prohibited Nigeria from moving or selling the three presidential jets until the awarded sum was paid to Zhongshan.

In addition, Zhongshan initiated an investment treaty arbitration against Nigeria under the bilateral investment treaty (BIT) between the People’s Republic of China and Nigeria. On March 26, 2021, an arbitral tribunal chaired by Lord Neuberger, former president of the UK Supreme Court, ruled in favor of Zhongshan. The tribunal awarded $55,675,000 in damages, along with $9.4 million in interest and £2,864,445 in legal costs, bringing the total to approximately $70 million. Efforts by the Federal Government to mediate the dispute between Ogun State and Zhongshan have so far been unproductive.

Timeline of events from the investment deal

• 2001: China and Nigeria signed a bilateral investment treaty to foster investment between the two nations.
• 2010: Zhongshan Fucheng Industrial Investment, through its parent company Zhuhai Zhongfu Industrial Group, acquires the rights to develop the Ogun Guangdong Free Trade Zone (OGFTZ) in Ogun State, Nigeria.
• 2011: Zhongshan establishes a local entity, Zhongfu International Investment (NIG) FZE, to manage the development of the free trade zone, overseeing infrastructure projects such as roads, sewerage, and power networks.
• 2012: Ogun State appoints Zhongfu as the interim manager of the OGFTZ.
• 2013: A joint venture agreement formalizes Zhongfu’s role as the permanent manager of the OGFTZ, granting it majority shareholding in the project.
• 2016: Ogun State abruptly terminates Zhongfu’s appointment and attempts to expel the company from Nigeria, which includes the harassment of its executives and revocation of their immigration papers.
• 2017: Zhongshan initiates arbitration proceedings against Nigeria, alleging a breach of the bilateral investment treaty.
• 2021: On March 26, 2021, the arbitral tribunal rules that Nigeria breached its obligations under the China-Nigeria BIT, awarding Zhongshan a total of approximately $70 million in damages and costs.
• 2023: Nigeria’s attempt to claim state immunity is rejected by the UK High Court, which ruled that the country had missed the deadline to appeal the arbitral awards.

Ongoing Repercussions

Two former governors of Ogun State, Ibikunle Amosun and Gbenga Daniel, have pledged to support the Federal Government’s efforts to recover the seized national assets. Amosun, in a public statement, argued against engaging with Zhongshan, labeling the company an “unlawful entity” without the legal standing to claim Nigeria’s assets. Senator Gbenga Daniel, representing Ogun East Senatorial District, also expressed his commitment to helping President Bola Tinubu find a diplomatic resolution to what he described as a “national embarrassment.”

Amid these developments, the Federal Government has issued a warning to all 36 state governments against entering into foreign or international agreements without consulting the Ministry of Foreign Affairs, highlighting the sensitive nature of such negotiations and their potential impact on national assets.