Seizure of national assets: An embarrassment too many

That assets of the Federal Government of Nigeria are, on the authority of a foreign court, seized for alleged default in contractual obligation by Ogun State is most embarrassing. But it should be quickly said that this, like similar incidences in the past, are avoidable if persons at all levels of public service, who are on oath to ‘be faithful and bear true allegiance to the Federal Republic of Nigeria’ would live up to their solemn promise. Their failure to honour this commitment repeatedly puts this country in disrepute on the global stage. Against the backdrop of other similar cases, this is one embarrassment too many; it is not at all acceptable to self-respecting citizens of this country.

According to a statement by former Ogun State governor, Senator Ibikunle Amosun, who is in the thick of this unfortunate matter, the rightful party to the Ogun/Guangdong Free Trade Zone (OGFTZ) contract is China Africa Investment FXE, which signed the deal with the state. Amosun describes the Chinese company as ‘the official representatives of Guangdong Province [of Peoples Republic of] China and lawful zone managers.’

Another Chinese company, Zhongshang Fucheng Investment Co. Limited, which allegedly presented itself as ‘a concerned and genuine tenant’ approached the government with ‘damaging and destructive information about the official representative of the Guangdong Province’ on the strength of which Amosun appointed ZhongFu International Investment FXE as ‘interim zone managers’ of the OGFTZ on March 15, 2012 ‘pending the completion of our fact-finding exercise.’ However, based on the clarification from the government of the Peoples Republic of China ‘via its Diplomatic Note 1601 dated March 11, 2016’, that China Africa Investment FXE was the rightful investor,’ Amosun terminated the appointment of the interim zone manager on 27 May 2016 “[a]fter due consultation with the relevant organs of government’ including ‘the State Security Services and the supervising Agency NEPZA.”

The former governor maintains that Zhongfu International Investment FXE sought legal redress and the dispute was decided in four different courts against Zhongfu International Investment FXE. Besides, he mentioned a March 2017 court ruling that “specifically restrained a reference to arbitration in the special circumstances of the matter being a trade dispute between two Chinese entities – Zhongfu and China Africa, with little or no connection with either Ogun State or the Federal Government.”

Zhongfu, “not satisfied with the decisions of the various courts… took its case, and wrote petitions at various times, to higher authorities in Abuja; the Presidency, Hon Minister of Trade & Investment; Attorney General & Minister of Justice, Inspector General of Police, EFCC and the National Assembly (both the House of Representatives and the Senate) among others.” “We successfully defended our actions at all levels before these organs of government, and they all agreed with our position.” This is to say that the Federal Government was in the know of the dispute between Ogun State government and the Chinese company.

In spite of the expressed court injunction in ‘Suit No AB/04/2017…delivered on March 29, 2017’ on the matter, Zhongfu took the matter to arbitration in foreign courts in UK, U.S., and France. Having secured a ruling to be paid €74,459,221 in arbitral award, in a UK court, a French court has granted it seizure of readily available three Nigeria-owned aircraft including a recently purchased presidential jet worth far more that the compensation value. It is even reported that the firm is scheming to seize two properties of the Nigerian government located in Liverpool, UK. There are fears that more federal assets may be seized in Canada and possibly elsewhere in pursuit of the standing judgement debt. Unless of course Nigeria responds quickly and appropriately to the issue in the courts.

A possible saving grace for Nigeria in this matter, according to informed opinions, is that, in international law, says Prof. Bolaji Akinyemi, former minister of foreign affairs, the assets of sovereign countries are covered by diplomatic immunity including the planes seized, which are used purely for non-commercial purpose to serve government of Nigeria. He wonders therefore how the Paris Judicial Court arrived at the rather decision to grant the right to a Chinese business entity to seize the asset of a sovereign nation. But of course, it is not clear whether the legal representatives of the government pleaded this immunity consideration, or whether there are provisions in the disputed agreement undermining the diplomatic immunity clause.

Adewole Adebayo, Social Democratic Party presidential candidate in the 2023 elections also opined that “under international law, assets of the Federal Government used by the government for diplomacy, and monies kept in our Central Bank …are immune [and] no court can attach them.” This being so, Titi Aina-Scott, Managing Partner of Scott Legal has advised the Federal Government to challenge the legality of the seizure of these asset, seek a stay of execution as well as an enforcement of diplomatic protection for them. Adebayo believes that once Nigeria can prove that these planes are diplomatic assets, the court will lift the seizure order. It must be said directly that this messy matter was avoidable if people in high office conducted the affairs of state entrusted to them with the due diligence and care they would apply to managing their private business.

Pertinent, common sense questions arise from this incident of national embarrassment. Since Ogun State, and indeed any other  sub-national entities have no recognition under international law, why did the attorney-general of the state not advise the state chief executive of the needfulness to involve ab initio, the attorney-general and minister of justice of the Federation in the negotiation for the establishment of the OGFTZ and other subsequent matters that arose therefrom? For, as Adebayo notes: “internationally, when you engage investors and you sign these contracts, you are not only signing commercial contracts, you are also signing treaties in some situations and if there is a dispute between the government and the investor, the investor may decide to sue on their own in a regular court, or it may go into arbitration…”

To be continued tomorrow.