Contract dispute: We’re ready to negotiate with Nigeria, says Chinese firm

Zhongshan Fucheng Industrial Investment Co. Ltd, a Chinese firm, says it is ready for a resolution of its dispute with Nigeria. 

A Paris court recently ordered the seizure of Nigeria’s assets — including three aircraft — over the contract dispute.

The court ruled that the Chinese firm should use Nigeria’s jets at the Paris-Le Bourget and Basel-Mulhouse international airports “as security for its claim of EUR 74,459,221”.

BACKGROUND

In 2010, Zhongshan, through Zhuhai Zhongfu Industrial Group Co. Ltd. (Zhuhai), its Chinese parent company, acquired rights to develop a free trade zone in Ogun state.

A year later, Zhongshan set up Zhongfu International Investment (NIG) FZE (Zhongfu), a Nigerian entity, to manage the project with the permission of the Ogun state government.

However, things took a different turn in July 2016 when the investor accused the state government of abruptly moving to terminate its appointment while attempting to install a new manager for the free trade zone.

Subsequently, Zhongfu initiated an investment treaty arbitration against Nigeria under the bilateral investment treaty between the People’s Republic of China and Nigeria (the China-Nigeria BIT).

The arbitrators had ruled that Nigeria was in breach of its obligations under the China-Nigeria BIT and awarded Zhongshan a compensation of around $70 million.

In January 2022, the Chinese company initiated a case to seek enforcement of the arbitration award.

Nigeria pleaded state immunity but was turned away by Sara Cockerill, a high court judge in the UK, who said the country abused the time frame for appealing arbitral awards.

On August 9, a US appellant court affirmed the judgment of the US district court for the District of Columbia, that held that the arbitration award is enforceable.

The court rejected Nigeria’s sovereign immunity defence.

‘READY TO SETTLE THIS CASE’

On Thursday, the presidency accused the Chinese firm of deploying “unorthodox and subterfuge” means in a bid to seize the assets.

Refuting the allegations in a statement sent to Premium Times, Zhongshan said it has only ever sought to assert its rights under international law and is confident in its case.

“The independent arbitral panel was found unanimously in its favour, and courts in multiple countries have upheld the view that the panel’s compensation should be enforced. The French court was fully aware of the facts when it reached its decision,” the firm said.

“Far from being just a fence, the Ogun Free Trade Zone was featured as a significant international investment by the Economist Intelligence Unit.

“Zhongshan has for a long time been ready to enter serious negotiations with the federal government of Nigeria to settle this case and still awaits an indication that the government is equally willing.”