Nigeria Faces Loss of Two UK Properties to Chinese Firm

A London commercial court has granted Zhongshan Fucheng Industrial Investment Co. Ltd final charging orders over two residential properties owned by Nigeria in the UK. The court’s decision came despite Nigeria’s previous objections to the jurisdiction of these orders.

The ruling was issued by Lisa Sullivan, a master at the court, according to a report by the Cable.

The dispute dates back to 2010, when Zhongshan Fucheng, through its parent company Zhuhai Zhongfu Industrial Group Co. Ltd, acquired rights to develop a free trade zone in Ogun State, Nigeria. A year later, Zhongshan established Zhongfu International Investment (NIG) FZE to manage the project with the Ogun state government’s authorization.

However, in July 2016, Zhongshan accused the Ogun state government of trying to terminate its appointment and install a new manager for the free trade zone. This led Zhongshan to initiate an investment treaty arbitration against Nigeria under the bilateral investment treaty between China and Nigeria (China-Nigeria BIT). The arbitration panel ruled in favor of Zhongshan, awarding approximately $70 million in compensation.

In January 2022, Zhongshan sought to enforce the arbitration award. Nigeria pleaded state immunity but was denied by High Court Judge Sara Cockerill, who pointed to Nigeria’s abuse of the timeframe for appealing arbitral awards. In July 2023, the UK Court of Appeal upheld the ruling, holding Nigeria liable for the $70 million award.

Zhongshan subsequently obtained interim charging orders over two Nigerian government-owned properties in Liverpool in June and August of the previous year. Nigeria contended that the properties were immune from seizure as they served consular functions and housed diplomatic staff. Despite being rented out, Nigeria maintained that the proceeds were not used for commercial purposes.

Master Lisa Sullivan rejected Nigeria’s arguments, noting that the properties had been leased to residential tenants and had not served consular or diplomatic purposes for the past 34 years. The judgment also pointed to the dilapidated state of one property as further evidence of its non-diplomatic use.

Timi Balogun, representing Nigeria, expressed disagreement with the decision and highlighted the complex issues of international law involved. He indicated plans to appeal to higher courts to seek a more thorough examination of state immunity and diplomatic property rights.