How former Governor Amosun got Nigeria into trouble

A contract between the Ogun State Government led by Senator Gbenga Daniel and a Chinese company,
Zhongshan Fucheng Industrial Investment Co. Ltd. could cost Nigeria a fortune.

The treaty, signed on June 28, 2007, regulated the administration of a free trade zone by the Chinese.

The Ogun State Government has reportedly granted the company a 99-year licence to use over 20,000 hectares of land in the zone.

However, the contract was terminated in 2012 by the state’s previous governor, Senator Ibikunle Amosun.

Amosun is said to have demanded a renegotiation of the contract, which the Chinese, however, refused.

This led to a dispute between the parties in 2015. In 2016, arbitration proceedings began, with Nigeria awarding the Chinese country $55.6 million in compensation and $75,000 in non-pecuniary damages, plus interest, legal fees and arbitration costs.

Full statement from Ogun State on this issue

OUR POSITION ON ZHONGSHAN’S RELEASE AND THE PARIS COURT’S SEIZURE ORDER – OGUN STATE GOVERNMENT

On August 14, 2024, @OGSG_Official was alerted to the provisional seizure of three Nigerian government aircraft in France by Chinese company Zhongshan Fucheng Industrial Investment Co. Ltd. (“Zhongshan”).

Ogun State also learned of two orders from the Court of Paris dated March 7, 2024 and August 12, 2024, respectively, obtained by Zhongshan without proper notice to the Federal Government or Nigeria, Ogun State or their legal advisers. This is the latest in a series of ill-advised attempts by Zhongshan to attach Nigerian assets in foreign jurisdictions, none of which have so far resulted in the recovery of any amounts from Nigeria. Each of the three aircraft is used exclusively for sovereign purposes and is therefore protected from attachment under international and French law.

In obtaining the provisional attachments, Zhongshan knowingly withheld information from the Federal Government of Nigeria, Ogun State and their legal advisers. Shockingly, Zhongshan also misled the Paris court about the use and nature of the assets to be attached and failed to provide the court with the information required by law.

Ogun State, in collaboration with the Federal Government of Nigeria, has taken swift action to ensure that these provisional attachments are lifted without delay. Just like the P&ID case, this is another unfortunate case of unscrupulous individuals posing as foreign investors whose sole aim is to defraud Ogun State and Nigeria.

It will be recalled that the underlying contract between Ogun State and Zhongshan to manage a free trade zone was entered into in 2007, 12 years before the current government. The parties entered into a dispute in 2015, which began arbitration in 2016. By the time the current state government took office in 2019, the arbitration hearing was almost complete. The arbitration tribunal awarded the Federal Government of Nigeria (FGN), which was a co-respondent, over USD 60 million, despite the fact that Zhongshan had only constructed a perimeter fence around the free trade zone.

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Needless to say, this was a bad/unfair decision. The present administration of the state could not in good conscience condone such an unconscionable and baseless decision that would destroy the common good of the good people of Ogun State. For this reason and on the basis of sound legal advice, this administration decided to oppose the enforcement of the award.

The resistance was successful in 8 different jurisdictions. Appeals against recognition orders from the US and UK are currently pending. On the advice of counsel, Ogun State also engaged Zhongshan in settlement talks on reasonable terms. The last meeting, attended by several Ogun State officials including His Excellency Prince Dapo Abiodun – the Governor of Ogun State – and the Honourable Attorney General/Minister of Justice, lasted for three days and was held in London in September 2023. Zhongshan’s initial reasonable willingness to consider Ogun State’s offer was surprisingly belied on the second day by its insistence on payment of the entire debt.

This led to the failure of mediation and the parties agreed to meet again in the first quarter of this year. Since then, Zhongshan has been acting evasively in bad faith and has instead initiated a series of enforcement proceedings which have been successfully resisted by the legal team appointed by the FGN and Ogun State. In cases such as this one, where Zhongshan obtained an interim injunction, Ogun State has been successful in lifting the injunctions.

We, of course, regret any inconvenience this has caused to the Federal Government of Nigeria, President Asiwaju Bola Tinubu, the GCFR and the good people of Ogun State and reiterate our commitment to constantly and consistently protect the integrity of the nation and its assets. We have taken all necessary legal steps to ensure that this unwarranted and baseless order is lifted within the shortest possible time.

As a sovereign nation whose assets are protected by sovereign immunity laws, we vow to resist all attempts at extortion and all theatrical actions clearly aimed at blackmailing and embarrassing our beloved country. It is important to note that Ogun State has never given up on a reasonable option for resolution, including with the last letter sent to Zhongshan last week. Unfortunately, Zhongshan only responded after this final order was obtained.

We have always preferred a reasonable and objectively quantifiable settlement amount and this remains an option to resolve this protracted dispute.

E signed

Hon Kayode Akinmade,

Special Adviser on Media and Strategy to the Governor of Ogun State.

Kazeem Badmus holds a degree in Mass Communication and has years of experience. As a professional in journalism and media writing, Kazeem emphasizes accuracy and factual reporting. He is also a skilled truth-finder and consciously delivers unbiased and development-oriented stories.