A Chinese firm has seized Nigerian assets in Europe to recover a $70m arbitration award. Explore the international dispute and its ramifications.
In a bid to retrieve $70 million from a 2021 arbitration judgment, Zhongshang Fucheng Industrial Investment Ltd, an investment group hailing from China is stepping up its endeavors to capture and liquidate Nigerian properties across North America and Europe.
As a part of their enforcement strategy, the firm has taken over two residential properties in Liverpool, United Kingdom that were connected to the Nigerian government. The company intends to sell these properties on popular global online platforms such as eBay.
In March 2021, Zhongshang was granted $55.7 million along with interest and legal expenses as per the arbitration judgement pertaining to a trade conflict with the Ogun State government.
The company asserts that Nigeria breached China-Nigeria’s 2001 trade accord by revoking its unimpeded commerce zone rights in 2016 at Ogun State.
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At the behest of Ogun State, Nigeria purportedly acted illegally through federal organizations such as police and immigration; henceforth, Zhongshang initiated judicial proceedings in UK courts.
Zhongshang was given the power to take possession of Nigerian assets in the UK by the UK High Court due to Nigeria’s failure to pay off an arbitration award.
The properties, situated at 15 Aigburth Hall Road and Beech Lodge on Calderstones Road in Liverpool, were vulnerable for asset recovery as they didn’t have diplomatic or consular immunity protection.
The fact that these properties were utilized as rental units without any connection to Nigeria’s diplomatic mission reinforces the legality of their confiscation in accordance with UK law.
In August 2024, Nigeria’s debt of $70 million is still accumulating interest at a monthly rate of 2%. Zhongshang intends to accelerate the repayment process by putting up Liverpool properties for sale with an approximate total worth of $2.2 million.
To ensure transparency due to significant public concern about Nigeria, the sales will be conducted in an open manner.
There are concerns over this development, especially since Nigeria recently dodged an arbitration debacle like the one involving P&ID that could have resulted in a loss of more than $11 billion for the country.
Unlike the corrupt-laden P&ID situation, various European courts- such as those found in France, Belgium and UK -have granted enforcement orders against Nigerian assets concerning Zhongshang case. Attempts to rely on sovereign immunity protection within America also proved futile.
The asset seizure happening currently highlights the wider ramifications on Nigeria, as it struggles with the legal and financial aftermaths of international arbitration cases.
Although Zhongshang’s pledge of transparency in the disposal of confiscated assets may provide some comfort, it also underscores the dangers posed by unsettled conflicts within a global context.
