Zhongshan Fucheng Industrial Investment Co. Limited, a Chinese firm that recently obtained a court injunction to ground three Nigerian presidential jets in Europe, is now pursuing plans to seize additional Nigerian assets in the United Kingdom, United States, and six other countries.
The firm has initiated legal proceedings in approximately eight jurisdictions worldwide, including Belgium, Canada, France, Singapore, and the British Virgin Islands.
The Federal Government of Nigeria has pledged to defend its foreign assets against what it terms as “predators.” This situation arises from a controversial court ruling that allowed Zhongshan to ground three presidential jets belonging to Nigeria.
The dispute traces back to a 2001 bilateral investment treaty between China and Nigeria aimed at fostering commercial investment. In 2007, Ogun State entered into a joint venture with a Chinese company and another firm to establish the Ogun Guangdong Free Trade Zone Company. The Nigeria Export Processing Zones Authority, a federal body responsible for overseeing free-trade zones in Nigeria, delegated control and operation of the zone to the company.
In 2010, the Ogun Guangdong Free Trade Zone Company contracted Zhongshan’s parent company to develop an industrial park within the free-trade zone. However, by early 2016, the agreement was terminated, leading Zhongshan to file lawsuits in Nigerian federal and state courts seeking the reinstatement of its contractual rights. These legal proceedings were discontinued in Spring 2018.
Recently, a French court authorised the seizure of three Nigerian presidential jets. Two of these jets—a Dassault Falcon 7X and a Boeing 737—are part of Nigeria’s presidential air fleet, while the third, an Airbus 330, was purchased but not yet delivered.
In a related development, Zhongshan took legal action against Ogun State, resulting in an independent arbitral tribunal awarding the Chinese firm $74.5 million in compensation, which Ogun State has yet to pay. The court order prohibits Nigeria from moving or selling the presidential jets until the compensation is settled.
Documents reveal that Zhongshan attempted to seize a jet being recovered by Nigeria from Dan Etete, a former petroleum minister, as part of the proceeds from fraudulent activities related to the $1.3 billion Malabu OPL245 oil deal. The Nigerian government had previously grounded this luxury jet.
“The goal is clear – that Mr. Etete will avoid the seizure of an asset he obtained with stolen Nigerian money, with Zhongshan’s connivance,” the documents state.
According to these documents, Zhongshan was initially hired to develop and manage Fucheng Industrial Park. However, after the government terminated its joint venture with CAI due to unmet requirements, Zhongshan was appointed as interim manager of the Zone. In June 2012, Zhongshan took control of a 51 percent stake in CAI and signed a new Joint Venture Agreement with Ogun State in September 2013.
The company has been actively pursuing enforcement of the tribunal award across various jurisdictions. As of August 2024, legal proceedings are ongoing in the USA, UK, Belgium, Canada, France, and the British Virgin Islands. Zhongshan has yet to recover any funds from the award and faces challenges in locating Nigerian assets abroad.
A recent court filing revealed that Zhongshan is seeking $130.6 million in compensation for a breach of contract regarding the Ogun Guangdong Free Trade Zone. This case, filed in the United States District Court for the District of Columbia, cites violations of the Investment Treaty by Nigeria, including failure to provide fair treatment, discrimination, neglect, breach of contract, and wrongful expropriation of investments.
Zhongshan claims it invested substantial resources in developing the industrial park, including infrastructure like roads, utilities, and services such as a hospital and bank. By 2016, businesses had moved into the zone, and Nigeria had collected approximately N160 million in tax revenue from the zone.
“In the first half of 2016, Ogun State terminated its agreements with Zhongshan, claiming that a different Chinese company was entitled to Zhongshan’s share of the free-trade zone and that Zhongshan had defrauded Ogun,” the documents state.
Further issues arose when an Ogun State official allegedly urged a Zhongshan executive to “leave peacefully” to avoid complications, followed by the issuance of an arrest warrant for two executives on charges of “criminal breach of trust.” One executive was detained and mistreated by Nigerian federal police.
The arbitral tribunal found that Nigeria had breached its obligations under the Investment Treaty, awarding Zhongshan $55.6 million in compensation and $75,000 in moral damages, along with interest and legal fees.
In response, Nigeria’s Attorney General, Lateef Fagbemi (SAN), announced that his office and the National Security Adviser’s office have initiated legal and diplomatic measures to recover the seized presidential aircraft.
On August 14, 2024, the Federal Government learned of the interim attachment of the jets in France. The attachment was authorized by the Judicial Court of Paris following orders dated March 7 and August 12, 2024. These orders were issued at Zhongshan’s request to enforce a Final Award granted in its favor on March 26, 2021, against Ogun State.
The Attorney General’s statement emphasised that while the dispute originated from Ogun State, the enforcement actions are directed against the Federal Government, in line with international law principles. The government is taking legal steps to challenge the orders, asserting that the jets are sovereign assets immune from attachment.
The Presidency also criticised Zhongshan’s efforts, describing them as fraudulent and stating that the jets, as sovereign assets, are protected by diplomatic immunity. The Presidency believes Zhongshan misled the Judicial Court of Paris regarding the nature of the assets.
The Ogun State Government condemned the judicial process that led to the provisional attachment of the jets. It labeled the process as fraudulent and claimed that Zhongshan concealed critical information from both the Nigerian government and Ogun State before securing the orders. The Ogun State Government maintains that the aircraft are immune from attachment under international and French laws and decried the actions as a new attempt to appropriate Nigerian assets abroad.
