Goodwill Gesture: Chinese Company Releases One of the Seized Aircraft to Nigerian President

The ongoing dispute between Nigeria and Zhongshan Fucheng Industrial Investment Co. Ltd has taken a slightly positive turn with the release of one of three aircraft seized in France. The Airbus A330, valued at over $100 million, has now been released by Zhongshan as a gesture of goodwill, allowing President Bola Tinubu to attend a scheduled meeting with French President Emmanuel Macron.

This seizure of the aircraft is a result of a protracted legal battle that began when the Ogun State government terminated a contract with Zhongshan for the management of the Ogun Guangdong Free Trade Zone (OGFTZ). The ensuing dispute led to a series of arbitration rulings in favor of Zhongshan, with courts in multiple countries, including France, the United Kingdom, and the United States, upholding an arbitral award of approximately $70 million.

The three presidential jets were seized following ex parte orders issued by the Judicial Court of Paris on March 7, 2024, and August 12, 2024. These orders were part of Zhongshan’s efforts to enforce the €74.4 million arbitration award granted in 2021. The aircraft, 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 reasons.

Zhongshan’s decision to release the Airbus A330 comes after it learned of President Tinubu’s need for the aircraft for his meeting with President Macron in France. A spokesperson for the company stated that this was a gesture of goodwill and reiterated the company’s commitment to reaching a reasonable settlement with the Nigerian government.

“Zhongshan has consistently sought to act reasonably and fairly in the course of a legal dispute with Nigeria which was not of its making,” the spokesperson said.

“It has now been made aware that an Airbus A330, currently detained in France as a result of a French court order obtained by Zhongshan, is needed for the President of the Federal Republic of Nigeria to travel to a scheduled meeting with President Macron of France early next week.

“As a gesture of goodwill, Zhongshan has lifted the seizure of that aircraft immediately. This will allow it to be used for the President’s trip.”

However, the Boeing 737 and Dassault Falcon 7X remain detained.

The dispute between Zhongshan Fucheng and Ogun State dates back to 2016 when the state government revoked the Chinese company’s management contract for the OGFTZ. The disagreement escalated to international arbitration, which ruled in favor of Zhongshan, awarding it $55.6 million in compensation, along with interest, legal fees, and other associated costs.

The total amount owed by Nigeria is approximately $70 million. Nigeria has resisted honoring the award, leading to multiple asset seizures and enforcement actions in foreign jurisdictions.

Zhongshan has maintained that it acted in accordance with international law and has sought only to enforce its legitimate rights under the China-Nigeria Bilateral Investment Treaty. The company initiated arbitration proceedings in 2017, and on March 26, 2021, the arbitral tribunal, chaired by Lord Neuberger, the former president of the UK Supreme Court, ruled decisively in favor of Zhongshan.

Both the Ogun State government and the Federal Government of Nigeria have issued statements expressing their opposition to the enforcement of the arbitral award. They argue that the aircraft in question are sovereign assets used exclusively for sovereign purposes and are therefore immune from seizure under international law.

Timeline of The Events

• 2001: China and Nigeria signed a Bilateral Investment Treaty (BIT) to encourage investments between the two countries.
• 2010: Zhongshan Fucheng Industrial Investment Co., 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. The company begins infrastructure projects such as roads, sewerage, and power networks within the zone.
• 2012: The Ogun State government appoints Zhongfu as the interim manager of the OGFTZ.
• 2013: A joint venture agreement is signed, making Zhongfu the permanent manager of the OGFTZ, with a majority shareholding in the project.
• 2016: Ogun State terminates Zhongfu’s appointment and takes steps to expel the company from Nigeria. The Chinese executives face harassment, and their immigration papers are revoked.
• 2017: Zhongshan initiates arbitration proceedings against Nigeria, claiming a breach of the bilateral investment treaty (BIT) between China and Nigeria.
• 2021: On March 26, 2021, the ad hoc arbitral tribunal, chaired by Lord Neuberger, issues a ruling in favor of Zhongshan, awarding the company $55.6 million in compensation, interest of $9.4 million, and legal costs of £2.86 million.
• 2022: In June and August, Zhongshan secures interim charging orders on two Nigerian government-owned properties in Liverpool, UK, as part of its efforts to enforce the arbitral award.
• 2023: The UK High Court dismisses Nigeria’s claim of sovereign immunity regarding the Liverpool properties, ruling that the Nigerian government had exceeded the time limit for appealing the arbitral award.
• July 2023: The UK Court of Appeal upholds the $70 million arbitration award against Nigeria, rejecting the government’s claim that the properties were used for diplomatic purposes.
• 2024: The US Court of Appeals for the District of Columbia affirms the enforceability of the arbitration award under the US Foreign Sovereign Immunities Act, allowing Zhongshan to proceed with its efforts to seize Nigerian assets abroad.
• August 2024: The Judicial Court of Paris issued orders on March 7 and August 12, leading to the seizure of three Nigerian government aircraft. Zhongshan announces the release of the Airbus A330 on August 16, 2024, to facilitate President Tinubu’s travel to France.

Although the Airbus A330 has been resolved, the dispute remains unresolved as the Boeing 737 and Dassault Falcon 7X continue to be detained. Both parties have expressed a willingness to engage in further negotiations, with Zhongshan reaffirming its readiness to reach a “reasonable compromise.” Nigeria, meanwhile, remains committed to contesting the seizure through legal and diplomatic channels.