Daud Olatunji
In a development that has sent shockwaves through diplomatic and legal circles, a Chinese firm, Zhongshan, has secured a $130.6 million compensation judgement against Nigeria, culminating in the seizure of three presidential jets by a French court.
This complex case, which has unfolded over 12 years, traces back to a joint venture agreement between the Ogun State Government and China’s Guangdong Province to establish the Ogun Guangdong Free Trade Zone (OGFTZ) in Igbesa, Ogun State.
The OGFTZ was envisioned as a massive industrial hub covering 2,000 hectares, intended to stimulate economic growth and attract significant foreign investments to Nigeria.
In 2010, Zhongshan was contracted to manage the Fucheng Industrial Park within the zone, following the initial 2007 agreement between Ogun State and Guangdong Province.
However, the partnership quickly soured, leading to a decade-long legal and diplomatic standoff.
The first major rift occurred in 2012 when the Ogun State Government abruptly terminated its partnership with China-Africa Investment Limited (CAI), the Chinese entity originally involved in the OGFTZ.
The termination was reportedly spurred by a diplomatic note from the Chinese Consulate in Lagos, which accused Guangdong Province of unlawfully holding shares in CAI.
In the aftermath, Zhongshan was brought in as the interim manager, taking over CAI’s 51% stake and signing a new joint venture agreement with the Ogun State Government in 2013.
However, this new arrangement was short-lived. By 2016, the Ogun State Government once again terminated its agreements, this time with Zhongshan, citing that another Chinese company held the legal rights to the shares in the free-trade zone.
The situation quickly escalated into a series of legal battles, with Zhongshan accusing Ogun State of fraud and breach of contract.
The conflict reached a boiling point when Nigerian federal police arrested a senior executive of Zhongshan at gunpoint, detaining him under conditions that the company described as harsh and abusive, including beatings and intimidation.
In response, Zhongshan escalated the dispute to the international arena, arguing that Nigeria had violated the bilateral investment treaty signed with China in 2001.
This treaty was designed to foster and protect commercial investments between the two nations, and Zhongshan claimed that Nigeria had failed to uphold its obligations, engaging in unreasonable discrimination and wrongfully expropriating investments without compensation.
Zhongshan, which had invested millions of dollars in infrastructure within the industrial park—building roads, utilities, and essential services like hospitals, hotels, and banks—took its case to the United States District Court for the District of Columbia.
The court ruled in favour of the Chinese firm, awarding $55.6 million in compensation, alongside $75,000 in moral damages, and covering interest, legal, and arbitral fees.
The court also prohibited Nigeria from moving or selling any of the presidential jets until the compensation was paid.
The legal drama took a dramatic twist when a French court authorised the seizure of three Nigerian presidential jets, including a Dassault Falcon 7X and a Boeing 737, both integral to Nigeria’s presidential air fleet.
The third aircraft, an Airbus 330, had been purchased by Nigeria but had not yet been delivered.
In a related incident, Zhongshan attempted to seize another luxury jet in Canada, which Nigerian authorities had recovered from former petroleum minister Dan Etete.
This jet was allegedly purchased with proceeds from the controversial $1.3 billion Malabu OPL245 oil deal. Nigerian officials have claimed that Zhongshan’s actions are part of a broader strategy to protect Etete from losing an asset acquired with stolen funds.
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