French court orders seizure of three presidential jets over aborted Chinese contract
A French court has ordered the seizure of three Nigerian presidential jets following a case filed before it involving the Ogun State government and a Chinese investment company, Zhongshan Fucheng Industrial Investment.
The company had approached the court over an export processing zone management underlying contract with the Ogun State government, which was revoked by the Ogun State government in 2016.
The Financial Times reported that, arising from the filing by the company, the court ordered the seizure of a Dassault Falcon 7X, a Boeing 737-7N6/BBJ, and an Airbus A330-243 owned by the federal government of Nigeria but parked at Paris-Le Bourget and Basel-Mulhouse airports.
Zhongfu, a subsidiary of Zhongshan Fucheng Industrial Investment, and the Ogun State government had, in 2013, signed the contract to develop a free trade area on the basis of the Chinese company owning 60 per cent of the joint venture.
The deal collapsed three years later, with Zhongfu alleging that Ogun State demanded a more significant share of Chinese investment in the free trade zone.
It was also alleged that the government embarked on a “campaign of illegal acts” against Zhongfu, forcing it to abandon the agreement.
Consequently, Zhongashan initiated arbitration proceedings against Nigeria in 2018, leading to the 2021 ruling of a three-man arbitration panel in London initially awarding the company $70 million in damages to be paid by the federal government.
According to the Financial Times, Zhongshan filed the enforcement order of a recent ruling with the Paris Judicial Court since the aircraft were stationed in France.
Following the order for the seizure of the presidential jets, the Presidency clarified on Thursday that the federal government has no contractual obligation to the Chinese firm that sought for their confiscation.
A statement by Bayo Onanuga, Special Adviser to the President on Information and Strategy, affirmed that the presidency is aware of the various failed attempts by the company to take over offshore assets of the federal government through subterfuge.
The statement said the government “is not under any contractual obligation with the company,” as the case is in which it is “trying to use every unorthodox means to strip our offshore assets is between the company and the Ogun State government.”
The presidential aide said the federal government is also aware of the efforts being made by the Ogun State government to reach an amicable resolution on the matter.
The statement added: “It must be said without any equivocation that Zhongshan has no solid ground to demand restitution from the Ogun State government based on the facts regarding the 2007 contract between the company and the State government to manage a free-trade zone.
“When the contract with Ogun State was revoked in 2015, the company had only erected a perimeter fence on the land earmarked for a free trade zone.
“While the Attorney-General of the Federation and Minister of Justice are working with the Ogun State government on an amicable resolution, Zhongshan obtained two orders from the Judicial Court of Paris dated March 7, 2024, and August 12, 2024, without any notice being duly served on the Federal Government of Nigeria and Ogun State Government.
“This arm-twisting tactic by the Chinese company is the latest in a long list of failed moves to attach Nigerian government-owned assets to foreign jurisdictions.
“The material facts in the transaction between the Ogun State Government and Zhongshan point to another P&ID case in which unscrupulous and questionable individuals falsely present themselves as investors with the sole objective of undercutting and scamming governments in Africa.
“Undoubtedly, Zhongshan withheld vital information and misled the Judicial Court in Paris into attaching the Nigerian government’s presidential jets, which are on routine maintenance in France.
“The use and nature of the presidential jets as assets of a sovereign entity whose assets are protected by diplomatic immunity forbid any foreign court from issuing an order against them.
“We are convinced the Chinese company misled the Judicial Court of Paris regarding the use and nature of the assets it seeks to attach and did not fully disclose them to the court as required by law.
“This same Chinese company tried to enforce its questionable judgement in the UK and USA but failed.
“Like the P&ID case, foreign companies are trying to defraud Nigeria with the collaboration of some bureaucrats. Zhongshan appeared to have sold the judgement they got to a venture capitalist seeking to make money by embarrassing the Federal Government and President Bola Tinubu.
“We want to assure Nigerians that the Federal Government is working with the Ogun State Government to discharge this frivolous order in Paris immediately.
“The Nigerian government will always work to protect our national assets from predators and shylocks who masquerade as investors.”
The presidency provided background to the case, noting: “A contract between Ogun State and Zhongshan to manage a free-trade zone was executed in 2007. The parties entered into a dispute in 2015, and arbitration began in 2016.
“By 2019, the arbitration hearing had been concluded. The Arbitral Panel awarded over 60 million USD against the Federal Government of Nigeria (FGN), a co-defendant, when all Zhongshan had done was build a perimeter fence around the free-trade zone.
“Based on legal advice, the Ogun State Government resolved to resist the enforcement of the award. The resistance was successful in 8 different jurisdictions. There are pending appeals against recognition orders issued in both the US and the UK.
“Ogun State also engaged Zhongshan in settlement discussions on reasonable terms. The last meeting, held in September 2023 in London, lasted for three days and was attended by several officials of Ogun State, including Governor Dapo Abiodun and the Attorney General/Minister of Justice, Prince Lateef Fagbemi.
“Zhongshan’s initial reasonable readiness to consider Ogun State’s offer was surprisingly reversed by the second day when it insisted on the government paying the full arbitration debt. This led to a breakdown of the mediation, with parties agreeing to meet again in the first quarter of this year.
“Since then, Zhongshan has been evasive. Instead, it embarked on a series of enforcement proceedings, which the legal team appointed by the FGN and Ogun State successfully opposed. In cases similar to the present one, where Zhongshan obtained an ex-parte order, Ogun State successfully set aside the orders.
“Ogun State has not given up on a reasonable settlement option, with the most recent letter sent to Zhongshan last week. Zhongshan only responded after obtaining this latest illegal order.”
The Ogun State government, on its part, has vowed to fight back, describing the attachment of the aircraft to the aborted export processing zone underlying the contract as fraudulent.
Faulting the Chinese company for attaching the aircraft to the case, a statement by Kayode Akinmade, Special Adviser to the Governor on Media and Strategy, said it was the latest in the series of attempts by the company to attach Nigerian-owned assets in foreign jurisdictions to its claims.
The statement observed that such effort had never led to the recovery of any sums from Nigeria.
The Ogun government pointed out that the three aircraft are used solely for sovereign purposes and, as such, are immune from attachment under international and French laws.
The government also alleged that Zhongshan deliberately withheld information from the federal government of Nigeria, Ogun State, and their legal counsel while obtaining the order.
The statement vowed that the present administration in the state will allow the order to stand as the government will resist its enforcement.
The statement read: “On August 14, 2024, the attention of the Ogun State Government was drawn to the provisional attachment of three Nigerian government-owned aircraft in France by the Chinese company, Zhongshan Fucheng Industrial Investment Co. Ltd. (Zhongshan).
“Ogun State also learnt of two orders of the Judicial Court of Paris dated March 7 2024, and August 12 2024, respectively, both obtained by Zhongshan without notice being duly given to the Federal Government of Nigeria, Ogun State, or their legal counsel.
“This is the latest in a series of ill-advised attempts by Zhongshan to attach Nigerian-owned assets in foreign jurisdictions, none of which have to date led to the recovery of any sums from Nigeria.
“Each of the three aircraft is used solely for sovereign purposes and, as such, is immune from attachment under international and French laws. In obtaining the provisional attachments, Zhongshan deliberately withheld information from the Federal Government of Nigeria, Ogun State, and their legal counsel.
“Just like the P&ID case, this is another unfortunate case of unscrupulous individuals masquerading as foreign investors with the sole aim of defrauding Ogun State and Nigeria.
“It should be recalled that the underlying contract between Ogun State and Zhongshan was executed in 2007, 12 years before the present administration, for the management of a free-trade zone. The parties entered into a dispute in 2015, with arbitration commencing in 2016.
“By 2019, when the current State Administration took office, the hearing at the arbitration had been all but concluded. The Arbitral Panel awarded over 60 million USD against the Federal Government of Nigeria (FGN), which was a co-defendant, when all Zhongshan had done was build a perimeter fence around the free-trade zone. Needless to say, this was a bad/unfair decision.
“The present State Administration could not in all good conscience allow such an unconscionable and baseless decision, which would dissipate the commonwealth of the good people of Ogun State, to stand.
“Accordingly, and based on erudite legal advice, this administration resolved to resist the enforcement of the award. The resistance was successful in 8 different jurisdictions. Currently, there are pending appeals against recognition orders issued in both the US and UK.”
Meanwhile, the presidential candidate of the Labour Party (LP) in the 2023 election, Peter Obi, has accused the federal government of insensitivity for going ahead with the deal to purchase presidential jets.
In a series of posts on his X handle on Thursday to react to the news of the Jets seizure, he described the court order as an international embarrassment and an incident exposing the multidimensional failure of leadership in the country.
The former Anambra State governor raised questions that he said must be answered by both the federal and Ogun State governments.
He posted: “The trending international news on the seizure of three jets belonging to Nigeria’s presidential fleet is yet another of many embarrassing things exposing our failed leadership and our attitude to the rule of law even in a democracy.
“It has also exposed multiple dimensions to our leadership failure and our insensitivity to the plight of the growing poor class in our midst.
“The fact that the federal government went ahead with the jet deal despite the cacophonous cry against the purchase of a presidential jet at this time when the people are going through a horrifying economic hardship shows the insensitivity of this administration.
“Added to it is the embarrassing aspect of our country’s presidential jets being held for contractual breaches arising from yet another dimension of inadequate leadership tidiness.
“I have been loud in my demand over time that the government at all levels should be accountable to the people, meaning that they must be very transparent in all their dealings.
Until a court in France prohibits Nigeria from moving or selling these three jets, Nigerians have no iota of information about both the buying and selling of these aircraft. It has been done in secrecy.
“Federal Government property, which belongs to the people, is being managed as a personal family asset.
Paying as much as $100 million for a Presidential jet for a country that is the poverty capital of the World and has more out-of-school children with over 40% food inflation is the height of concern for the people’s feelings. “This incident has also opened up an aspect of indiscipline that is copiously embedded in our country, which is the abuse and disrespect for the rule of law.
“Here are questions begging for answers:
“To what extent did the Ogun government follow its agreement with the Chinese firm?
“After the UK court ruling that prohibited some Nigerian buildings in Liverpool, what did both Ogun State and the Federal Government do before the French court action?
“I would like to, therefore, challenge the federal government to come clean and transparent on this matter and tell Nigerians how we got to this latest international mess”.