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Court authorizes Chinese company to seize Nigerian property in London

Chinese company Zhongshan Fucheng Industrial Investment has received final charging orders in respect of two residential properties in the United Kingdom belonging to the Nigerian government.

The properties against which Zhongshan has sought charging orders are located at 15 Aigburth Hall Road, Liverpool and Beech Lodge, 49 Calderstones Road, Liverpool, and the company estimates they are worth between £1.3 million and £1.7 million.

On June 14, Master Sullivan of the High Court of Justice, King’s Bench Division, London Commercial Court issued final charging orders in favor of the Chinese company, according to court documents seen by PREMIUM TIMES.

Nigeria had opposed the interim and final charging orders, arguing that the application for the orders did not meet the requirements of the law and that state immunity applies to the facilities, as the acting head of the Nigerian High Commission in London has certified that the properties are not in use or intended to be used for commercial purposes.

“None of the property is registered as diplomatic or consular premises or mission premises, nor is any residential property notified as the private residence of a member of the mission,” the approved ruling states.

“None of those listed as residing there in publicly available databases have any connection to the mission,” he added.

Details

Zhongshan has been awarded final recovery orders following its efforts to enforce a $70 million investment treaty award. On 26 March 2021, an arbitral tribunal had issued a final award of $55,675,000, plus interest of $9.4 million and costs of £2,864,445 payable by Nigeria to Zhongshan.



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Zhuhai Zhongfu Industrial Group Co Ltd, the parent company of Zhongshan, and the Ogun Guangdong Free Trade Zone (OGFTZ) entered into a framework agreement on the establishment of Fucheng Industrial Park within the zone on June 29, 2010. The agreement gave Zhuhan the right to develop and manage Fucheng Park within the zone.

The Nigerian Export Processing Zones Authority registered Zhongfu International Investment (NIG) FZE, a subsidiary of Zhongshan, as a free trade zone company within the OGFZ in 2011.

Ogun State subsequently appointed Zhongfu as the acting director/administrator of the zone.

In July 2016, Zhongfu alleged that the Ogun State government was making efforts to rescind his appointment, adding that it planned to appoint another administrator of the free trade zone to replace the Chinese investor.

Zhongfu initiated an investment treaty arbitration against Nigeria based on the bilateral investment treaty involving the People’s Republic of China and Nigeria.

In 2021, a London arbitration court ordered Nigeria to pay Zhongshan the sum of US$55.6 million plus interest and costs as compensation after finding the country responsible for expropriation and other violations of the China-China bilateral investment treaty. Nigeria.

Nigeria filed an application before the Court of Appeal (civil division) of the Royal Courts of Justice, London in 2023, seeking to appeal against the judgment of Cockerill J, High Court Judge, dated 2 December 2022.

The judge had dismissed Nigeria’s application to modify the order he had made on December 21, 2021 ex parte in favor of Zhongshan for the enforcement of an arbitration award dated March 21, 2021 against Nigeria.

“Nigeria failed to comply with the generous deadline of two months and fourteen days to make such a request and, in fact, did not invoke State immunity until 29 November, three months after the deadline had expired,” the appeal court ruled on 20 July 2023.

“Nigeria did not submit any application within the specified deadline, and the judge was amply justified in rejecting the remedy for the reasons given by the Chancellor,” he added.

The court did not grant Nigeria’s wish to challenge the execution order. Last year, Zhongstan obtained interim charging orders over two Liverpool properties belonging to the Nigerian government, which Nigeria opposed.

Nigeria said Zhongstan did not make full and frank disclosure at the stage of the provisional charging order and therefore the court should not exercise its discretion to make the charging order final.

“The properties are currently used for rentals to residential tenants unrelated to Nigeria and its Mission. Those are commercial purposes for the purposes of Article 13(4) of the SIA and therefore state immunity does not prevent the execution of the properties,” Ms Sullivan said in her June 14, 2024 ruling.

“There is no good reason why I should not exercise my discretion to make charging orders final, and I do,” he added.



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