More trouble for Tinubu’s government as US court authorizes Chinese company to seize Nigerian assets abroad

President Bola Tinubu's government could be in total trouble after another appeals court in the United States granted a Chinese company, Zhongshan Fucheng Industrial Investment Co. Limited, permission to proceed with its efforts to seize Nigerian assets abroad.

This decision is part of the company's efforts to enforce a $70 million arbitration award against Nigerian authorities.

Newsband reported that the federal government on Thursday accused Zhongshan Fucheng Industrial Investment of attempting to fraudulently dump Nigeria's offshore assets.

A statement by Bayo Onanuga, spokesman for President Bola Tinubu, described the company's attempts to take over federal government assets as unlawful because there are no contractual obligations between the parties.

Previously, a French court had approved the seizure of the three presidential jets due to the ongoing dispute between Zhongshan and the Ogun State government.

The seized aircraft include a Dassault Falcon 7X at Le Bourget Airport in Paris, a Boeing 737 and an Airbus 330 at Basel-Mulhouse Airport in Switzerland.

The aircraft, which were undergoing routine maintenance in France and Switzerland, were seized by order of the Paris court on March 7 and August 12, 2024.

The legal dispute, meanwhile, stems from a decision by the Ogun State government in 2016 to cancel the contract with Zhongshan to manage the export processing zone. This led to a lengthy legal battle that has now been transferred to international courts.

Unfortunately, due to the actions of the Ogun government, the Nigerian federal government found itself in the crossfire.

Meanwhile, in a majority opinion written by Patricia Millett and Julianna Childs, the U.S. Court of Appeals found that the final award was enforceable under the New York Convention because it involved a dispute between “persons” who had a legal business relationship.

The Court held that Nigeria was deprived of sovereign immunity in the arbitration proceedings due to the arbitration exception to the Foreign Sovereign Immunities Act (FSIA).

The majority decision states: “For the reasons set out above, we consider that the final award is enforceable under the New York Convention because it arose from a disagreement between 'persons' having a legal, commercial relationship.”

“The District Court therefore has jurisdiction over this case under the FSIA's arbitration exception. The District Court's judgment is affirmed.”

However, in his dissenting opinion, the third judge, Gregory Katsas, argued that the term “persons” did not include a sovereign state at the time the New York Convention was drafted.

Katsas argued that Ogun State's actions could not be attributed to Nigeria, adding that the award was “based solely on sovereign acts of Nigeria governed by international law”.

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