A Chinese investor, Zhongshan Fucheng Industrial Investment, has been granted final charging orders over two residential properties in Liverpool owned by the Nigerian government.
This follows a decision by Master Sullivan in the Commercial Court in London to enforce a $70 million investment treaty award against Nigeria.
According to the judge, the order was premised on the fact that the properties have been converted to commercial use outside Nigeria’s diplomatic or consular activities in the UK, stressing that enforcement of the order should prevail.
Zhongshan Fucheng Industrial Investment, a Chinese firm, is actively pursuing the enforcement of a $70 million investment treaty award against Nigeria.
The dispute stems from Zhongshan’s involvement, through its parent company Zhuhai Zhongfu Industrial Group Co. Ltd, in developing a free trade zone in Ogun State, Nigeria.
Established under the permission of the Ogun state government, Zhongshan encountered issues when the state abruptly terminated their management appointment in July 2016, prompting Zhongfu International Investment (NIG) FZE, a Nigerian entity, to initiate investment treaty arbitration under the China-Nigeria Bilateral Investment Treaty.
The arbitral tribunal found Nigeria in breach of its obligations and awarded Zhongshan approximately $70 million in compensation.
Zhongshan subsequently sought enforcement of this award, leading to legal battles where Nigeria invoked state immunity defenses. However, Sara Cockerill, a high court judge, rejected Nigeria’s arguments, citing procedural lapses in appealing arbitral awards.
In July 2023, a UK Court of Appeal upheld the enforcement of the $70 million arbitration award in favor of Zhongshan Fucheng. The Chinese company has since secured interim charging orders over two
properties in Liverpool owned by the Nigerian government, despite Nigeria’s assertions of sovereign immunity.
Nigeria argued that these properties serve diplomatic and consular purposes, providing services to Nigerians and housing officials, albeit at below-market rental rates, and insisted that they are not used for commercial activities.
This ongoing legal saga highlights the complexities of international investment disputes and the interplay between sovereign immunity and enforcement of arbitral awards in the global legal landscape.
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