A failed business deal between the Ogun State Government and Zhongshan, a Chinese company, has led to the seizure of three presidential jets belonging to the Federal Government of Nigeria. The seizure was authorized by a French court after a protracted legal battle stemming from a 2016 contract dispute.
The Genesis of the Dispute
The business relationship began in June 2010, when the Ogun Guangdong Free Trade Zone (OGFTZ), a joint venture between the Ogun State Government and the Chinese government, signed a framework agreement with Zhuhai Zhongfu Industrial Group Co Ltd, the parent company of Zhongshan. The agreement gave Zhongshan the right to develop and manage Fucheng Park within the zone. The Ogun State Government appointed the company as the interim manager/administrator of the zone in 2011.
However, in 2016, the Ogun State Government, under new leadership, terminated Zhongshan’s appointment and replaced them with another manager. This decision led Zhongshan to pursue legal action against Nigeria, citing a breach of the bilateral investment treaty between Nigeria and China.
The Legal Battle and Court Ruling
After years of legal proceedings, the Judicial Court of Paris ruled in March 2024 in favor of Zhongshan, awarding the company approximately $74.5 million in compensation. The Ogun State Government, however, has not yet honored this award. In response, the French court authorized the seizure of three Nigerian presidential jets: a Dassault Falcon 7X at Le Bourget airport in Paris, a Boeing 737, and an Airbus 330 at Basel-Mulhouse airport in Switzerland.
Ogun State Government’s Reaction
The Ogun State Government has criticized Zhongshan’s actions, accusing the company of obtaining court orders without proper notice to the Federal Government of Nigeria, Ogun State, or their legal representatives. The state government also argued that the jets, being used for sovereign purposes, should be immune from seizure under international and French law.
In a statement by Kayode Makinde, Special Adviser on Media and Strategy to Governor Dapo Abiodun, the government condemned Zhongshan for involving Federal Government assets in their legal battle and claimed that the company misled the Judicial Court of Paris regarding the nature and use of the aircraft. The court has prohibited the sale or purchase of the seized jets until Zhongshan receives the awarded compensation.
This ongoing dispute underscores the complexities and potential international ramifications of failed business agreements between state governments and foreign entities.