Chinese firm Zhongshan Fucheng Industrial Investment has successfully secured final charging orders against two residential properties in the United Kingdom owned by the Nigerian government. These properties, located at 15 Aigburth Hall Road, Liverpool, and Beech Lodge, 49 Calderstones Road, Liverpool, are estimated to be worth between £1.3 and £1.7 million, according to the company’s estimates.
On June 14, Master Sullivan of the High Court of Justice, King’s Bench Division, Commercial Court in London, issued the final charging orders in favor of Zhongshan. This decision followed Nigeria’s objection to both interim and final charging orders. The Nigerian government argued that the application for these orders did not comply with legal requirements and claimed state immunity, asserting that the properties were not used or intended for commercial purposes, as certified by the acting head of Nigeria’s High Commission in London.
“Neither property is recorded as diplomatic or consular premises or premises of the mission or residential property notified as a private residence of a member of the mission,” the approved judgment stated. “None of those listed as resident there on publicly available databases have any connection with the mission,” it added.
The final charging orders were issued as part of Zhongshan’s efforts to enforce an investment treaty award of $70 million. On March 26, 2021, an arbitral tribunal issued a final award of $55,675,000, along with an interest of $9.4 million and costs of £2,864,445, payable by Nigeria to Zhongshan.
The background to this legal battle traces back to an agreement signed on June 29, 2010. The Zhuhai Zhongfu Industrial Group Co Ltd group of companies, Zhongshan’s parent company, and the Ogun Guangdong Free Trade Zone (OGFTZ) entered into a framework agreement to establish Fucheng Industrial Park within the zone. This agreement granted Zhuhan the right to develop and manage Fucheng Park within the zone. Subsequently, in 2011, the Nigeria Export Processing Zones Authority registered Zhongfu International Investment (NIG) FZE, a subsidiary of Zhongshan, as a free trade zone enterprise within the OGFZ. Later, Ogun State appointed Zhongfu as the interim manager/administrator of the zone.
However, in July 2016, Zhongfu alleged that the Ogun State Government was attempting to terminate its appointment and planned to appoint another manager to replace the Chinese investor. In response, Zhongfu initiated an investment treaty arbitration against Nigeria, leveraging the bilateral investment treaty between the People’s Republic of China and Nigeria. The arbitration tribunal in London, in 2021, found Nigeria liable for expropriation and other breaches of the China-Nigeria bilateral investment treaty, ordering Nigeria to pay Zhongshan $55.6 million in addition to interest and costs as compensation.
Nigeria attempted to appeal the judgment. In 2023, Nigeria approached the Court of Appeal (civil division) of the Royal Courts of Justice in London, seeking to challenge the judgment of High Court Judge Cockerill J, dated December 2, 2022. The judge had previously dismissed Nigeria’s application to vary an order made on December 21, 2021, which was in favor of Zhongshan for the enforcement of the arbitration award.
“Nigeria failed to comply with the generous time limit of two months and fourteen days to make such an application and, indeed, did not raise state immunity until 29 November, three months after the time limit expired,” the judgment delivered by the court of appeal on 20 July 2023 read. “Nigeria failed to make any application within the time specified, and the Judge was amply justified in refusing relief for the reasons given by the Chancellor,” it added.
The court did not grant Nigeria’s request to challenge the enforcement order. In the preceding year, Zhongshan had obtained interim charging orders on the two Liverpool properties, which Nigeria opposed. Nigeria argued that Zhongshan failed to provide full and frank disclosure at the interim charging order stage and that the court should not exercise its discretion to finalize the charging order.
“The properties are currently used for the purpose of leases to residential tenants unconnected with Nigeria and its Mission. Those are commercial purposes for the purpose of s13(4) of the SIA, and therefore, the enforcement against the properties is not barred by state immunity,” Ms. Sullivan stated in her judgment dated June 14, 2024. “There is no good reason why I should not exercise my discretion to make the charging orders final, and I do so,” she added.
