A court in the British Virgin Islands has granted Zhongshan Fucheng Industrial Investment Co. Ltd, a Chinese firm, the authority to seize an additional £20 million ($25 million) from Nigeria’s foreign-denominated assets. The seizure stems from a dispute over an Ogun State trade zone deal that fell through in the early 2000s during the administration of Ibikunle Amosun, the former governor of Ogun State.
The ruling, issued by Paul Webster, a judge at the British Virgin Islands High Court on November 8, 2024, concluded that Nigeria was not immune from executing the arbitral award and the subsequent judgment debt in favor of Zhongshan. The case stems from a bilateral investment treaty between China and Nigeria, which the judge interpreted as Nigeria’s written consent to enforce such awards. Under this treaty, both countries committed to honoring awards, which the judge ruled as binding in this instance.
The ruling marks the latest setback for Nigeria in its ongoing legal battles over the trade zone issue. In his judgment, Judge Webster referenced previous rulings in France, Belgium, Canada, the United States, and other jurisdictions, all of which have found Nigeria liable to settle the debt. These rulings dismissed Nigeria’s sovereign immunity defense, paving the way for Zhongshan to enforce the judgment.
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Zhongshan Fucheng, represented in court by King’s Counsel Timothy Otty and Lauren Peaty of Withers British Virgin Islands, has been pursuing enforcement of a $70 million arbitration award against Nigeria. The dispute began in 2010 when Zhongshan, through its parent company Zhuhai Zhongfu Industrial Group Co. Ltd, secured rights to develop a free trade zone in Ogun State.
However, in 2016, the Ogun State government terminated its agreement with Zhongshan, leading to the arbitration claim under the bilateral investment treaty between China and Nigeria.
In a prior ruling from a London commercial court in August 2024, the same Chinese company was granted final charging orders over two Nigerian government-owned residential properties in relation to the same case. The Chinese firm had sought to enforce the $70 million arbitration award, which was upheld by the UK Court of Appeal in July 2023.
In response to the British Virgin Islands ruling, the Nigerian government has assured that it is studying the judgment and will respond appropriately. Daniel Bwala, Special Adviser to the President on Policy Communication, stated that the judgment cannot be enforced immediately, noting that Nigeria will work to vacate the judgment. Bwala also emphasized that the ruling is not final and that Nigeria has the opportunity to appeal.
The ongoing legal battles highlight the mounting challenges for Nigeria in foreign courts and raise concerns over its obligations under international treaties and agreements. The government continues to explore legal options to address the issue and avoid further financial implications.
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