Zhongshan, a Chinese company, has successfully petitioned for the seizure of three Nigerian presidential jets, following a ruling by a French court. The ruling authorised the confiscation of the aircraft due to a long-standing business dispute between Ogun State and the Chinese company, Zhongshan.
“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,” the court further stated.
“The aircraft… will be positioned so that the cockpit faces a wall or building or in any other way that prevents it from taking off again autonomously,” the court ordered as part of the enforcement of a $74.5 million arbitration award in favor of Zhongshan.
The aircraft, including a Dassault Falcon 7X stationed at Le Bourget airport in Paris, a Boeing 737, and an undelivered Airbus 330 at Basel-Mulhouse airport in Switzerland, were confiscated by authorities in France and Switzerland.
The dispute began in 2010 when Zhuhai Zhongfu Industrial Group Co Ltd, Zhongshan’s parent company, and the Ogun Guangdong Free Trade Zone (OGFTZ) entered an agreement to establish Fucheng Industrial Park within the zone.
In 2011, Zhongfu International Investment (NIG) FZE, a subsidiary of Zhongshan, was registered as a free trade zone enterprise within OGFZ. The Ogun State government later appointed Zhongfu as the interim manager of the zone. However, in July 2016, the Ogun State Government moved to terminate Zhongfu’s appointment, leading to the current legal battle.
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Following the termination, Zhongshan initiated an investment treaty arbitration against Nigeria, citing the bilateral investment treaty between China and Nigeria.
The arbitration tribunal, chaired by a former President of the UK Supreme Court, awarded Zhongshan $55.7 million, with an additional $9.4 million in interest and legal costs amounting to £2.86 million.
Zhongfu launched an investment treaty arbitration against Nigeria, citing the bilateral investment treaty between China and Nigeria. On March 26, 2021, the tribunal, chaired by a former President of the UK Supreme Court, issued a final award of $55.7 million, with an additional $9.4 million in interest and legal costs amounting to £2.86 million, making a total of $74.5 million payable by Nigeria to Zhongshan.
The federal government has made lots of efforts with the Ogun State government to resolve the issue amicably, yet no settlement was reached, leading to international legal actions.
According to reports, these aircraft were undergoing maintenance when the order for their seizure occurred. The Nigerian government had reportedly paid over $100 million for the Airbus A330, which had not yet been delivered to the country.
In addition to the jets, Nigerian-owned properties located at 15 Aigburth Hall Road and Beech Lodge on Calderstones Road in Liverpool, valued between £1.3 million and £1.7 million, were seized by a UK court in connection with the same dispute.
The French court’s order explicitly prohibits the movement, sale, or purchase of the aircraft until Zhongshan receives its compensation. Bailiffs have already served papers for each aircraft. Zhongshan, following its legal victory, was granted the authority to enforce the seizure with the assistance of bailiffs, “who are authorized to take all necessary measures to ensure the jets remain grounded,” according to the report.
However, as of now the Nigerian government has yet to officially comment on the seizure of its assets.
