A court in the British Virgin Islands has authorized a Chinese firm to seize $25 million from Nigeria’s foreign assets over a failed trade zone deal.
This judgment is tied to an agreement between Nigeria and Zhongshan Fucheng Industrial Investment Co. Ltd, a Chinese company, that collapsed over a decade ago.
The dispute stems from a 2010 agreement to develop a free trade zone in Ogun State, under the administration of then-Governor Ibikunle Amosun.
In 2016, the Ogun State government abruptly terminated the project, sparking a legal battle that has haunted Nigeria in multiple courts worldwide.
The British Virgin Islands High Court ruled on November 8, 2024, that Nigeria was not immune to an arbitral award secured by Zhongshan.
Judge Paul Webster stated that Nigeria had effectively waived its sovereign immunity through the bilateral investment treaty (BIT) with China.
“The provision that both parties must enforce arbitral awards constitutes a written consent of the Nigerian state,” the judge ruled.
This ruling adds to Nigeria’s growing list of losses in international courts, especially concerning arbitration disputes.
Courts in France, Belgium, Canada, the United States, and other jurisdictions have previously sided with Zhongshan on the matter.
In August 2024, a London court granted the Chinese company a final charging order over two Nigerian government-owned residential properties in the UK.
The properties were targeted as part of an effort to enforce the $70 million arbitration award Zhongshan secured in 2022.
The arbitration tribunal had awarded Zhongshan $70 million, citing Nigeria’s breach of obligations under the BIT.
Reacting to the latest ruling, the Presidency assured that the judgment would not be enforced without a fight.
Daniel Bwala, Special Adviser to the President on Policy Communication, emphasized that Nigeria would appeal the decision.
“This judgment cannot be enforced immediately. It’s like a warning for Nigeria to defend itself,” Bwala stated.
He noted that no judgment is final without both parties present in court and that the federal government is studying the ruling.
“Nigeria still has a chance to vacate this judgment,” Bwala added confidently.
The dispute originates from Zhongshan’s attempt to develop the Ogun free trade zone through its subsidiary, Zhongfu International Investment (NIG) FZE.
The Ogun State government terminated the project in 2016, accusing Zhongshan of failing to meet contractual obligations.
Zhongshan countered that the termination violated the BIT between China and Nigeria, leading to arbitration proceedings.
In 2022, a UK court upheld the arbitration tribunal’s decision, rejecting Nigeria’s argument for state immunity.
Judge Sara Cockerill ruled that Nigeria had “abused the time frame for appealing the award,” solidifying Zhongshan’s victory.
The latest judgment highlights Nigeria’s vulnerabilities in international legal disputes.
Experts warn that Nigeria’s reputation as an investment destination could suffer if the country continues losing such cases.
With billions of dollars at stake in other arbitration battles, the government faces increasing pressure to overhaul its approach to foreign investment agreements.
The Presidency insists it is committed to protecting Nigeria’s assets and defending its sovereignty in court.
