Chinese company Zhongshan Fucheng Industrial Investment Co. Limited is making moves to seize the £20 million judgment cost awarded in favor of Nigeria against P&ID by a United Kingdom appeal court last month, THISDAY has reported.
According to the report, the company, which had earlier secured a court judgment in France to seize two Nigerian presidential planes, is also working to confiscate two properties in Liverpool belonging to the Nigerian government about the dispute between Ogun State and the Chinese firm.
Meanwhile, Attorney-General of the Federation and Minister of Justice Lateef Fagbemi has accused the Chinese firm of resorting to arm-twisting tactics to seize Nigerian assets in foreign jurisdictions.
Also, former Ogun State Governor, Senator Ibikunle Amosun, on Sunday called Zhongshan an imposter, saying this dispute is like the P&ID situation where Nigeria eventually prevailed – and calls their attempt to seize Nigerian assets unlawful.
In March 2021 an arbitration tribunal – chaired by the president of the UK Supreme Court – awarded $74.5m (£57.8m) in compensation to the Chinese firm. Ogun State reportedly refused to pay this amount.
Meanwhile, Nigeria’s inability to prove allegations of misrepresentation and concealment of facts against Zhongshan, among others, are said to be reasons the country lost its appeal against the arbitration award to the Chinese firm, a source from the US courts hinted THISDAY.
Recall that one of the reasons given by the Ogun State government for revoking the joint venture agreement with Zhongshan was based on information from Zhongshan that a Chinese company; CAI and its parent company have been liquidated and wound up without successor companies, adding that CAI could not execute the free trade zone project.
One Mr. Adeoluwa, who testified for Nigeria recalled how he wrote two letters in 2011/2012, relying on mouthwatering representations by Zhongfu about its ability to manage the Zone, as well as representations concerning and relating to CAI’s incapability to manage the Zone and the criminal investigation in China involving its parent company.
The source, however, said that the arbitration held that there was no evidence presented by the witness to prove that CAI had been liquidated or had ceased to exist before 2011/2012 when he wrote and sent the letters.
Besides, the tribunal noted that even if a case of misrepresentation was made, it was obvious that what led Adeoluwa into writing the 2011/2012 letters was his conviction about Zhongshan’s record and promises, as well as CAI’s poor performance.
It was the conclusion of the tribunal that Ogun State signed the 2013 JVA based on its assessment of Zhongshan’s ability.
On the allegations of concealment of material facts to the extent that Zhuhai and GXIG entered into an Entrustment of Equity Management Agreement, it was the position of the tribunal that the fact that Zhongshan did not inform Ogun State about the Equity Agreement, even if it became effective, did not amount to some sort of wrongdoing on the part of the company.
According to the tribunal, the fact that A is negotiating, or even has negotiated, a contract with B, who is in a contractual relationship with C, is not something that A is legally obliged to reveal to C when negotiating a contract with C, even if the negotiations are related to C’s contract with B.
Meanwhile, the US appellate said it agreed with the district court that the FSIA’s arbitration exception stripped Nigeria of its sovereign immunity in this case.
According to the appellate court, the FSIA’s arbitration exception requires the court to find the existence of three jurisdictional facts: (1) an arbitration agreement; (2) an arbitration award”; and (3) a treaty governing the award.
The court stated that the first two requirements are not disputed in this case and are established in the record. Nigeria and Zhongshan had an arbitration agreement because Nigeria extended an open offer to arbitrate to all Chinese investors, and Zhongshan was a qualifying investor.
Whether the arbitration exception applies in this case therefore depends on whether a treaty—specifically, the New York Convention—governs the Final Award. We hold that it does because the Final Award arose from (1) a legal relationship.
The Final Award satisfies the Convention’s requirements that the arbitrated dispute (1) arises out of a legal relationship that is (2) considered commercial.
As for the first requirement, Zhongshan and Nigeria shared a legal relationship because Nigeria owed Zhongshan legal duties under the Investment Treaty.
FG, Zhongshan Saga: Chinese Company Moves To Seize £20 Million P&ID Award
