The Nigerian government is embroiled in a deepening legal crisis following the seizure of three of its aircraft by French authorities, marking a new chapter in a long-standing legal dispute with Zhongshan Fucheng Industrial Investment Co. Ltd, a Chinese company.

The seizure, involving a Dassault Falcon 7X, a Boeing 737, and a newly acquired Airbus A330 valued at over $100 million, has drawn widespread attention and triggered reactions from both federal and Ogun State governments.

According to a report by Premium Times, the three aircraft, which either form part of the Nigerian presidential fleet or were recently purchased by the government, were seized under orders from a French court. The Dassault Falcon 7X was undergoing maintenance at Paris-Le Bourget Airport, while the Boeing 737 and Airbus A330 were stationed at Basel-Mulhouse International Airport for similar services.

The seizures stem from a protracted legal battle in 2016 when Ogun State revoked Zhongshan’s management contract for a free-trade zone project in Nigeria. Despite an arbitral tribunal chaired by a former President of the UK Supreme Court ruling in favor of Zhongshan, awarding them €74.46 million in compensation, Nigeria has yet to comply with the judgment. Consequently, Zhongshan sought enforcement of the award through the French legal system, successfully obtaining a court order to seize Nigerian assets to secure their claim.

The court granted Zhongshan the authority to impound the aircraft, citing that “this protective seizure will take place to secure and preserve the claim arising from the arbitration award dated 26 March 2021, made by an ad hoc arbitral tribunal.”

To prevent the aircraft from leaving the airports, the court ordered that they be parked in a way that their cockpits face a wall or other structure, ensuring that the jets cannot take off autonomously.

Zhongshan has pursued similar enforcement actions in other jurisdictions, including the United Kingdom. In Liverpool, buildings owned by the Nigerian government have reportedly been seized, further aggravating the ongoing dispute.

Government Reactions

Federal Government Statement

In response to the aircraft seizures, Bayo Onanuga, Special Adviser to the President on Information and Strategy, released a statement acknowledging the situation but dismissing Zhongshan’s claims. The presidency emphasized that the Federal Government was not under any contractual obligation with Zhongshan and attributed the dispute to the Ogun State government. According to Onanuga, the Chinese company has no solid legal ground to demand restitution, as it only constructed a perimeter fence for the free-trade zone before the contract was revoked in 2015.

The presidency decried Zhongshan’s tactics, likening the situation to the notorious Process and Industrial Developments Limited (P&ID) case, where foreign entities sought to exploit Nigeria through questionable legal claims.

“The material facts in the transaction between the Ogun State Government and Zhongshan point to another P&ID case in which unscrupulous and questionable individuals falsely present themselves as investors with the sole objective of undercutting and scamming Governments in Africa,” the statement said.

The federal government accused Zhongshan of withholding vital information from the French court and misleading it regarding the nature of the presidential jets.

“We are convinced the Chinese company misled the Judicial Court of Paris regarding the use and nature of the assets it seeks to attach and did not fully disclose to the court as required by law,” the statement said.

“The Federal Government is not under any contractual obligation with the company. The case in which Zhongshan is trying to use every unorthodox means to strip our offshore assets is between the company and the Ogun State Government,” the statement added.

Ogun State Government’s Response

Ogun State issued a separate statement signed by Kayode Akinmade, Special Adviser on Media and Strategy to the Ogun State Governor. The state government condemned the seizure, labeling Zhongshan’s actions as part of a “subterfuge” aimed at defrauding the state and Nigeria at large.

“It must be said without any equivocation that Zhongshan has no solid ground to demand restitution from the Ogun State Government based on the facts regarding the 2007 contract between the company and the State Government to manage a free-trade zone,” the state said.

“We naturally regret any embarrassment this has caused the Federal Government of Nigeria, HE President Asiwaju Bola Tinubu, GCFR and the good people of Ogun State and re-affirm our commitment to constantly and consistently protect the integrity of the nation and its assets. We have taken all necessary legal steps to ensure that this spurious and baseless order is vacated within the shortest possible time,” it added.

Ogun State disclosed that it had been engaged in settlement negotiations with Zhongshan as recently as September 2023, but the discussions broke down when the company reversed its initial willingness to consider a reasonable settlement and instead insisted on full payment of the arbitration award.

It also emphasized that the current administration could not, in good conscience, accept the arbitral ruling, which was described as “unfair and unconscionable,” given that Zhongshan had only built a perimeter fence. The state also revealed that it had successfully resisted the enforcement of the award in eight different jurisdictions and that appeals were pending in both the U.S. and the UK.

A Case of Sovereign Immunity

Both the federal and state governments have invoked the principle of sovereign immunity, asserting that the aircraft used for sovereign purposes should not be subject to seizure under international and French law. They have vowed to take swift legal action to vacate the French court’s order and prevent further embarrassment to the nation.

“The use and nature of the Presidential jets as assets of a Sovereign entity whose assets are protected by diplomatic immunity forbid any foreign Court from issuing an order against them,” they said.

The Ogun State government reaffirmed its commitment to protecting Nigeria’s assets and the integrity of its legal framework.

“As a sovereign nation, whose assets are protected by laws of sovereign immunity, we vow to resist any attempts at blackmail and theatrics clearly designed to extort and embarrass our dear country,” it said.

Unfortunately, while the Federal and Ogun States governments are making efforts to resolve the matter, the U.S. Court of Appeals for the District of Columbia has reportedly rejected Nigeria’s sovereign immunity and authorized the Chinese consortium to proceed with its efforts to confiscate Nigeria’s assets abroad.

The U.S. court’s decision was particularly significant because it found that Nigeria had grossly violated both the commercial and fundamental rights of Zhongshan executives involved in the free-trade zone project. Following their successful case in the UK in 2021, Zhongshan was awarded $55.6 million in compensation for breach of contract and $75,000 in moral damages, with additional interest and fees.