EXPLAINER: Why Nigeria’s Presidential Jets Were Seized Abroad

Nigerians have criticised the news that three presidential jets of the Nigerian government, which are national assets abroad, have been confiscated over a legal dispute involving the Federal Government, the Ogun State government, and a Chinese company, Zhongshan Fucheng Industrial Investment Co. Ltd.

The seizure was sanctioned by a court in Paris, France, in honour of an application filed by the Chinese company against the Ogun State government and the federal government of Nigeria.

The seized presidential jets include a Dassault Falcon 7X at Le Bourget airport in Paris, a Boeing 737, and a $100 million Airbus 330 at Basel-Mulhouse airport in Switzerland.

How Did We Get Here?

The dispute started in 2016 when Ogun State Government under former Governor Ibikunle Amosun terminated a contract signed by the state with Zhongshan in 2007. Former Governor Gbenga Daniel signed the agreement to develop a free trade zone in the state.

While revoking the contract, the Amosun-led administration argued that the investors were fraudulent and the contract was not in the best interest of the state.

According to court records, an executive of Zhongshan was arrested and detained for 10 days on the orders of the Ogun state government.

Following the breach of contract and human rights abuse, Zhongshan initiated an arbitration proceeding against Nigeria in a district court in the United Kingdom, citing a China-Nigeria Investment Treaty as a basis for seeking redress. The treaty, signed in 2001, encouraged investment between China and Nigeria, providing fair treatment of investors and arbitration of disputes. 

Nigeria’s legal representatives argued that the U.K. court had no jurisdiction and moved a motion to dismiss Zhongshan’s application. Still, the district court affirmed jurisdiction over the case, citing the Foreign Sovereign Immunities Act’s arbitration exception.

In March 2021, the U.K. district court found that Nigeria breached the China-Nigeria Investment Treaty and awarded $55.6 million in compensation and $75,000 in moral damages in favour of Zhongshan. Nigeria has refused to pay ever since.

After a year of nonpayment, Zhongshan sued in the district court to enforce the arbitration award under the Federal Arbitration Act. However, Nigeria contended before the United States District Court for the District of Columbia in Washington that its sovereign immunity should preclude the case from being heard in a U.S. court.

Nevertheless, the federal judge rejected Nigeria’s claim, noting that the country’s status as a signatory to the New York Convention permitted arbitration involving various entities, including sovereign states.

Following this, Nigeria filed an interlocutory appeal on April 22, 2024. Two members of the three-judge panel at the District’s Appeals Court ruled that the case should proceed, determining that Nigeria had forfeited its immunity by participating with Ogun in the breach of the contract. They concluded that, as Ogun is a component of Nigeria, the country could be held accountable for violating the contract with the Chinese.

After that, the Chinese company seized Nigeria’s assets in Europe. They got the approval of a French court to seize three Presidential jets in Paris and Switzerland. The court order prohibits the jets’ movement, sale, or purchase until Zhongshan receives the awarded $74.5 million.

Presidency, Ogun Govt Reacts

In a statement issued on Thursday, August 15, 2024, the Presidency argued that “the Federal Government is not under any contractual obligation with the company”, even though the Appeal Court in the U.S. had affirmed, based on the Investment Treaty with China, that the federal government is responsible for the protection of Chinese investors in the country.

“The Federal Government is fully aware of efforts made by the Ogun State Government to reach an amicable resolution.

“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 Presidency backed the Ogun state government’s decision to revoke the contract in 2016, describing the Chinese company’s legal battle as “arm twisting”.

In its reaction, the Ogun state government said it regrets the embarrassment the matter has caused Nigeria and the federal government. Although it described the Chinese company as “fraudulent”, it stressed its readiness to settle out of court. 

It argued that the company misled the French court to obtain the confiscation judgment.

“Each of the three aircraft is used solely for sovereign purposes and, as such, immune from attachment under international and French law. In obtaining the provisional attachments, Zhongshan deliberately withheld information from the Federal Government of Nigeria, Ogun State, and their legal counsel.

“Shockingly, it also appears to have misled the Judicial Court of Paris as to the use and nature of the assets it seeks to attach and not made full disclosure to the court as required by law,” it said in a statement signed by Kayode Akinmade, the Special Adviser to the State Governor on Media and Strategy.

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Oluwatobi Odeyinka

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