Two Nigerian government-owned properties in the United Kingdom are currently under threat of acquisition by a Chinese investor, Zhongshan Fucheng Industrial Investment, following a legal order granting the investor enforcement rights over a $70 million investment treaty award against Nigeria. The properties in question, located in Liverpool and estimated to be collectively worth £1.7 million, have been targeted due to a debt related to the notorious P&ID case.
The legal battle reached its recent climax on June 14, when Master Sullivan of the Commercial Court in London issued final charging orders on the two residential properties. This decision was based on the assertion that the properties had been converted for commercial use unrelated to Nigeria’s diplomatic functions in the UK, thereby justifying their enforcement.
Representing Zhongshan, legal teams from Withers and 3VB faced off against Nigeria’s defense mounted by Squire Patton Boggs and Atkin Chambers in a contentious courtroom saga. The dispute originated from a joint venture between Zhongshan’s subsidiary and Nigeria’s Ogun State to establish a free trade zone near Lagos in 2013. Despite the subsidiary’s majority stake, Ogun State terminated its involvement three years later, setting the stage for subsequent arbitration.
In 2021, a London-seated UNCITRAL tribunal, chaired by Lord Neuberger alongside Matthew Gearing KC and Rotimi Oguneso SAN, ruled against Nigeria, citing expropriation and breaches of the China-Nigeria bilateral investment treaty. The tribunal ordered Nigeria to pay $55.6 million plus interest and costs, a decision later contested by Nigeria on jurisdictional grounds in the Commercial Court.
Initially challenging the award’s validity, Nigeria withdrew its objection shortly before a scheduled hearing on Zhongshan’s application for security and costs, leading to an ex parte enforcement order granted by Mrs. Justice Cockerill in December 2021. Nigeria’s subsequent attempt to contest this order was rebuffed by the Court of Appeal in July 2023, which upheld the decision that state immunity did not apply in this context.
Zhongshan’s pursuit of its claims extended beyond the UK, with interim charging orders secured over the Liverpool properties and additional actions taken in jurisdictions such as Washington, DC, Quebec, and Belgium. These efforts underscored Zhongshan’s determination to recover its debts, despite Nigeria’s resistance on sovereign immunity grounds and other legal challenges.
In response to the latest developments, Timi Balogun of Squire Patton Boggs, representing Nigeria, expressed disagreement with the court’s rulings, emphasizing the complex international law issues involved, including the rights of foreign states in managing assets abroad. Balogun indicated Nigeria’s intention to appeal, underscoring the significance of these legal precedents.
Beyond the UK, Zhongshan’s legal maneuvers included attempts to seize assets in Washington, DC, where Nigeria contested the application based on sovereign immunity. Similarly, efforts in Quebec and Belgium faced challenges from Nigeria, reflecting a broader international legal standoff.
In parallel proceedings, Zhongshan targeted a £20 million liability owed to Nigeria by a BVI-registered company under a separate Commercial Court ruling related to the P&ID case. This multi-jurisdictional strategy highlighted Zhongshan’s systematic approach to recovering funds owed, despite withdrawals and legal setbacks in different jurisdictions.
As of the latest update, Nigeria’s Ministry of Foreign Affairs had not responded to inquiries regarding these developments, indicating ongoing diplomatic and legal sensitivities surrounding the enforcement actions and their implications for international relations and legal frameworks.
This legal saga underscores the complexities of sovereign immunity, international arbitration, and the enforcement of investment treaty awards, setting precedent for future cases involving state entities and private investors on the global stage.
