British Virgin Islands court grants Chinese firm right to seize Nigerian $25m assets

.Nigeria will enchantment the judgement- Presidency

A courtroom within the British Virgin Islands has, once more, granted Zhongshan Fucheng Industrial Funding Co. Ltd, a Chinese language agency, the authority to grab one other £20 million ($25 million) from Nigeria’s international denominated property over an Ogun commerce zone deal that fell by means of within the early 2000s below the administration of Ibikunle Amosun, the then governor of Ogun state.

In a swift response, the Presidency has assured that the federal authorities is learning the judgment and can reply appropriately.

Daniel Bwala, Particular Adviser to the President on Coverage Communication, advised BusinessDay that the judgment can’t be enforced instantly, noting that Nigeria will vacate the judgement.

Reviews had revealed that Paul Webster, a choose on the British Virgin Islands Excessive Courtroom, in his judgement of November 8, 2024, held that Nigeria was not resistant to execution of an arbitral award and subsequent judgment debt in favour of the Chinese language firm, Zhongshan, because of the wording of the underlying bilateral funding treaty concluded between China and Nigeria.

The choose held {that a} time period of the treaty which offered that “both contracting parties shall commit to the enforcement of the award” constituted “a written consent of the Nigerian state.”

The choose, subsequently, held that based mostly on Part 13(3) of the State Immunity Act 1978, the British Virgin Islands should enable Zhongshan to implement the judgement debt in opposition to Nigeria from the UK.

The ruling marks the newest in a string of losses Nigeria has suffered in international jurisdictions over the previous years.
The British courtroom, counting on the preliminary judgements on the identical concern by courts in France, Belgium, Canada, the USA, British Virgin Islands, amongst others, discovered Nigeria liable to settle the debt and dismissed the nation’s sovereign immunity argument as unfounded and unenforceable in opposition to Zhongshan.

Zhongshan was mentioned to have been represented within the case by Timothy Otty (King’s Counsel) and Lauren Peaty of Withers British Virgin Islands. However reacting to the judgement, Bwala advised BusinessDay that the federal authorities will examine the ruling and reply appropriately

Bwala, who’s a lawyer by coaching, famous that the judgement can’t be enforced instantly.
“Primarily based on what’s earlier than me, the preliminary response as is that this isn’t a judgement that will likely be enforced instantly. It is sort of a warning to the nation to enter its protection and till such is finished, the judgement can’t be enforced.

“No Judgement is considered substantive or said to carry ‘a natural Justice unless both parties are present in court.’”

Bwala acknowledged that Nigeria nonetheless has the prospect to enchantment and vacate the judgement, noting that the federal authorities will examine it and reply appropriately.

Recall {that a} London business courtroom had, in August, this yr, granted the identical Chinese language agency, a closing charging orders over two residential properties owned by Nigerian authorities over the identical concern.

The Chinese language agency had approached the courtroom in search of to implement a $70 million arbitration award in opposition to the Nigerian authorities.
The ruling was delivered by Lisa Sullivan, a grasp on the courtroom, after Nigeria’s earlier makes an attempt to problem the jurisdiction of the orders.

The authorized battle stems from a 2010 settlement during which Zhongshan, by means of its mum or dad firm Zhuhai Zhongfu Industrial Group Co. Ltd, secured rights to develop a free commerce zone in Ogun State, Nigeria.

In 2011, Zhongshan established a Nigerian entity, Zhongfu Worldwide Funding (NIG) FZE, to handle the undertaking below the authority of the Ogun State authorities.

The case adopted a choice by the Ogun State authorities in July 2016 which terminated its appointment. BusinessDay had reported that the dispute led to Zhongfu initiating an funding treaty arbitration below the bilateral funding treaty between China and Nigeria (the China-Nigeria BIT).

The arbitration tribunal dominated in favour of Zhongshan, awarding the corporate roughly $70 million in compensation, citing Nigeria’s breach of its obligations below the BIT.

In January 2022, Zhongshan sought to implement the arbitration award within the UK courts. Nigeria argued for state immunity, however this protection was rejected by Excessive Courtroom Choose Sara Cockerill, who dominated that Nigeria had abused the time-frame for interesting the arbitral award.

In July 2023, the UK Courtroom of Enchantment upheld the $70 million arbitration award in favor of Zhongshan.