The controversy intensified after it was reported that a Chinese company had secured a judgment to ground three of Nigeria’s presidential jets. This issue stems from a bilateral investment treaty signed in 2001 between China and Nigeria, which was intended to foster commercial investment between the two nations.
In 2007, Ogun State established a joint venture with a Chinese firm and another entity to form the Ogun Guangdong Free Trade Zone Company. The Nigeria Export Processing Zones Authority (NEPZA), a federal body overseeing free-trade zones in Nigeria, delegated the management of this zone to the joint venture.
By 2010, the Ogun Guangdong Free Trade Zone Company had contracted Zhongshan’s parent company to develop an industrial park within the zone. However, in the first half of 2016, the agreement was terminated, leading Zhongshan to seek legal redress in Nigerian courts. These proceedings were eventually halted in Spring 2018.
Recently, a French court authorized the seizure of three Nigerian presidential jets: two of these, a Dassault Falcon 7X and a Boeing 737, were recently listed for sale, while the third, an Airbus 330, was purchased by Nigeria but not yet delivered. Zhongshan had previously taken Ogun State to court, where an independent tribunal, led by the former President of the UK Supreme Court, awarded Zhongshan $74.5 million in damages. Ogun State has not yet settled this amount.
Documents reveal that Zhongshan attempted to seize a jet being recovered from Dan Etete, who was alleged to have acquired it with proceeds from fraudulent activities linked to the $1.3 billion Malabu oil deal. The Federal Government had tracked and grounded this luxury jet, which was purchased with some of the alleged fraudulent funds.
According to the documents, Zhongshan was initially engaged as a developer and manager of the Fucheng Industrial Park but was later asked to manage the facility after the government terminated its joint venture with CAI due to unmet obligations.
The documents also state that Ogun State canceled its contract with Zhongshan after receiving a Diplomatic Note from the PRC Consulate in Lagos, which claimed that Guangdong illegally held shares in China Africa Investment Limited and that New South Group was the rightful manager of the free-trade zone.
The dispute is currently under litigation in about eight jurisdictions, including the USA, UK, Belgium, Canada, France, and the British Virgin Islands. Despite these proceedings, Zhongshan has yet to recover any of the awarded funds, and efforts to track Nigerian assets abroad continue.
The Chinese company has recently sought $130.6 million in compensation for alleged contract breaches related to the Ogun Guangdong Free Trade Zone. This case, filed in the United States District Court for the District of Columbia (Case No. 1:22-cv-00170), was argued in April 2024 and decided in August 2024. The court found Nigeria in violation of the Investment Treaty with China and awarded Zhongshan $55.6 million in compensation and $75,000 in moral damages, plus interest and legal fees.
The Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), confirmed that legal and diplomatic efforts are underway to recover the seized jets. A statement from the Special Adviser to the President on Communication and Publicity, Kamarudeen Ogundele, detailed that the provisional attachment of the jets in France was based on orders from the Judicial Court of Paris, sought by Zhongshan to enforce an arbitration award against Ogun State.
The Federal Government contends that these assets are protected by sovereign immunity and cannot be seized. The Presidency has accused Zhongshan of fraudulently attempting to claim Nigerian assets abroad and misleading the French court regarding the nature and use of these assets.
Ogun State has also criticized the judicial process, calling the provisional attachment of the jets a fraudulent maneuver and accusing Zhongshan of concealing information from the Nigerian government and its legal representatives.
The Ogun State Government’s statement highlighted that the underlying contract, which dates back to 2007, was executed well before the current administration and that ongoing appeals against the award are being pursued in various jurisdictions.