London, UK – June 24, 2024:
Two Nigerian properties in the United Kingdom are facing imminent seizure by a Chinese investor following a court order granting enforcement rights over a $70 million investment treaty award against Nigeria.
Zhongshan Fucheng Industrial Investment secured final charging orders over two UK residential properties owned by the Nigerian government, alongside a £20 million debt linked to the P&ID case.
The order, issued on June 14 by Master Sullivan in the Commercial Court in London, pertains to two Liverpool properties collectively valued at £1.7 million. The court highlighted that these properties were utilized commercially, beyond Nigeria’s diplomatic or consular activities in the UK, thus upholding the enforcement order.
This legal battle involved Zhongshan, represented by Withers and barristers at 3VB, and Nigeria, represented by Squire Patton Boggs and a barrister at Atkin Chambers.
Sources revealed that the underlying arbitration stemmed from a joint venture with Nigeria’s Ogun State to establish a free trade zone near Lagos in 2013. Despite holding a 60% stake, a Zhongshan subsidiary faced termination of its participation by Ogun three years later.
In 2021, a London-seated UNCITRAL tribunal chaired by Lord Neuberger, alongside Matthew Gearing KC and Rotimi Oguneso SAN, ruled Nigeria culpable of expropriation and other breaches under the China-Nigeria bilateral investment treaty, ordering payment of US$55.6 million plus interest and costs.
Nigeria contested the jurisdictional grounds in the Commercial Court but later withdrew before a hearing on Zhongshan’s application for security and costs.
Master Sullivan granted Zhongshan an ex parte enforcement order in December 2021, unopposed within the 74-day deadline allowed by law. The Court of Appeal later prevented Nigeria from challenging the order, upholding Cockerill’s ruling that state immunity did not apply.
Zhongshan obtained interim charging orders in June and August 2023 over the Liverpool properties, dismissing Nigeria’s arguments regarding improper service and disclosure.
Master Sullivan rejected Nigeria’s objections, stating parties can pursue multiple enforcement actions to recover debts, emphasizing Nigeria’s failure to pay any award with the properties representing a small fraction.
Timi Balogun of Squire Patton Boggs, Nigeria’s counsel, expressed disagreement, citing complex public international law issues including state immunity and the right of a foreign state’s High Commission in England and Wales. Nigeria intends to appeal for higher court review.
Zhongshan pursued enforcement in Washington, DC, where Nigeria’s motion on sovereign immunity was rejected. The DC district proceeding awaits Nigeria’s appeal decision.
Further actions by Zhongshan include seizing a private jet in Quebec and attachments in Belgium. In the British Virgin Islands, Zhongshan secured an interim attachment over a £20 million liability owed by Process & Industrial Development (P&ID) following an English Commercial Court ruling.
Nigeria’s Ministry of Foreign Affairs had not responded to requests for comment at the time of reporting.