The escalating legal confrontation between Nigeria and Zhongshan Fucheng Industrial Investment Ltd, a Chinese firm, has turned a new leaf, as Zhongshan confiscates another luxury jet owned by Nigeria in Canada. This move is part of a broader campaign by Zhongshan to recover assets as compensation for an unresolved arbitration award.
The dispute, which stems from a failed investment deal, has seen Nigeria’s assets being seized across multiple countries, with the potential for further losses looming on the horizon.
Background of the Dispute
The conflict between Nigeria and Zhongshan Fucheng Industrial Investment Ltd originates from a botched free trade zone contract in Ogun State. The Chinese company had entered into an agreement with the Nigerian government to develop the Ogun-Guangdong Free Trade Zone, a project that promised significant economic benefits for both parties.
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However, the deal soured over time, with both sides accusing each other of contractual breaches.
Zhongshan, feeling aggrieved by what it perceived as Nigeria’s failure to honor its commitments, took the matter to international arbitration. The arbitration panel ruled in favor of Zhongshan, awarding the company over $70 million in damages. But Nigeria has consistently contested the outcome, claiming no wrongdoing and challenging the enforcement of the arbitration award in courts across various jurisdictions.
Seizure of Nigerian Assets
Zhongshan’s efforts to recover its awarded compensation have led to a series of legal actions resulting in the seizure of Nigerian assets across the globe. These seizures have been strategically executed in countries where Nigeria holds valuable properties or interests, allowing Zhongshan to recoup its losses in lieu of the unpaid arbitration award.
United Kingdom: Zhongshan successfully seized guest houses belonging to the Nigerian government. These properties, used primarily for diplomatic purposes, were among the first to be confiscated as part of the enforcement of the arbitration award.
France: In a similar vein, assets related to Nigeria’s diplomatic missions in France were targeted. Nigerian presidential aircraft were seized, including the newly purchased jet which was later released by the firm as a sign of “goodwill.”
Canada: The most recent and high-profile seizure involved the luxury jet, a Bombardier 6000 type BD-700-1A10, which was once owned by former Nigerian oil minister Dan Etete. The jet, which was purchased for $57 million from the proceeds of the controversial OPL 245 oil field sale, had been under Nigeria’s custody since 2016. However, following a court ruling in March 2024, Zhongshan took control of the aircraft, marking a significant victory in its asset recovery campaign.
The aircraft, with tail number M-MYNA and serial number 9471, was part of the luxurious assets amassed by Dan Etete during his tenure as oil minister. After Nigeria seized the jet from Etete in Dubai, it was flown to Canada in 2020, where it remained under Nigerian control until Zhongshan’s recent legal victory.
Judge David Collier of the Superior Court of Quebec ruled against Nigeria, dismissing the country’s sovereign immunity claims and rejecting its argument that it could not respond to the lawsuit due to the general elections. Nigeria in its defense, told the court that it was unable to respond to the suit early enough due to its 2023 general elections.
The judge’s decision paved the way for Zhongshan to take possession of the jet, further eroding Nigeria’s international assets.
Potential Future Seizures
Zhongshan Fucheng Industrial Investment Ltd has made it clear that it will continue to pursue Nigeria’s assets until the full amount of the arbitration award is recovered. With over $70 million still outstanding, the Chinese firm is expected to target additional Nigerian properties and assets in other countries.
There are credible reports that Zhongshan is eyeing Nigerian assets in Belgium and the United States, where the country maintains valuable properties, including diplomatic buildings, bank accounts, and potentially more aircraft. The legal framework in these countries, particularly concerning international arbitration awards, could allow Zhongshan to successfully execute further seizures.