Niger Settles $7.6m Debt With UK Aviation Firm to Save $35m New York Mansion From Seizure

The government of Niger has settled a long-running dispute with Menzies Aviation, a Scottish airport services provider, preventing a $35 million mansion it owns in Manhattan from being seized to satisfy a $7.6 million debt.

The dispute dates back to 2004, when Menzies was awarded a 10-year contract to run ground-handling services at Niger’s airports. Niger cancelled the contract midway through and created its own ground-handling unit at the country’s main airport, requisitioning Menzies personnel and equipment without compensation. Menzies sued and won an arbitration case at the International Centre for the Settlement of Investment Disputes, part of the World Bank.

Niger initially challenged ICSID’s jurisdiction but later ceased all involvement in the proceedings and was declared to be in default. Menzies then went to court in the United States to confirm the award, but Niger failed to appear. A judge granted a default against Niger and awarded Menzies $7.6 million last year. With payment not forthcoming, Menzies persuaded a judge at a New York court in July to allow it to seize a property owned by Niger in the affluent Upper East Side.

The multistorey mansion, at 5 East 80th Street, was bought by Niger in 1977 for $600,000 and is now valued at about $35 million, Judge Jesse Furman said in his decision. The property was originally used as the official residence of Niger’s ambassador to the United Nations until the late 1990s. A financial and diplomatic crisis later left Niger’s government unable to send funds to its UN mission, and the country began renting out the property so it could afford to keep the mission running.

READ MORE: NANS Hails Tinubu and Umahi on Road Tour, But the Pictures Tell a Different Story

Under the lease, the tenant sends rent directly to the mission, which deposits it in a New York bank account and uses the money to pay the salaries of local staff. Judge Furman said the Foreign Sovereign Immunities Act allows the property of overseas governments in the US to be seized if it is being used for commercial activity. He dismissed Niger’s claim that the property is immune from seizure because it funds its diplomatic presence in New York.

After the judge granted Menzies’ motion for a writ of execution on the mansion, Niger wrote to the court asking for proceedings to be halted as it was in discussions aimed at a full and final settlement of the matters at issue. A notice issued by a court in the District of Columbia now reveals that the parties have entered into a confidential settlement agreement that provides for the full resolution of the default judgment. The sum Niger has paid has not been disclosed.

The mansion has been a source of controversy for years. In 2011, the New York Post reported that impoverished citizens of Niger owned the multimillion-dollar property just steps from Central Park, while the average income in the West African nation was $1 a day. The property was landmarked as part of the Metropolitan Museum Historical District in 1978 and has been rented to wealthy tenants, including Imelda Marcos, the former first lady of the Philippines. In 2003, German real-estate developer Aby Rosen signed a long-term lease for the building. Property taxes had not been paid since June 2009, and the city was owed over $243,000 at the time of the 2011 report.

The settlement brings an end to a legal battle that had threatened to strip Niger of one of its most valuable overseas assets. For a country that has faced financial and diplomatic crises in recent years, the resolution of the Menzies dispute is a rare piece of good news. But the episode also raises uncomfortable questions about why one of the world’s poorest nations was spending millions on a luxury Manhattan townhouse while its citizens struggled to get by.

About The Author

West Africa Weekly

author

See author's posts