Nigeria May Lose Two UK Properties To Chinese Firm

A commercial court in London has enforced final charging orders on two residential properties owned by the Nigerian government in the UK, a decision rooted in an ongoing investment treaty dispute with Zhongshan Fucheng Industrial Investment Co. Ltd.

Background Of The Dispute

The dispute traces back to 2010 when Zhongshan Fucheng, under its parent company Zhuhai Zhongfu Industrial Group Co. Ltd, secured rights to develop a free trade zone in Ogun State, Nigeria.

After establishing Zhongfu International Investment (NIG) FZE in 2011 to manage the project, tensions escalated in 2016 when the Ogun State government allegedly tried to replace Zhongshan as the zone’s manager.

Following the disagreement, Zhongshan initiated an investment treaty arbitration against Nigeria under the China-Nigeria Bilateral Investment Treaty (BIT), resulting in an arbitration panel awarding Zhongshan approximately $70 million in 2022.

Efforts to enforce this award in the UK began in January 2022, culminating in the recent court decision.

Court’s Ruling And Implications

Master Lisa Sullivan of the London commercial court rejected Nigeria’s plea of state immunity, noting the properties in question had not served diplomatic or consular functions for over three decades.

Instead, they had been rented to residential tenants, contradicting Nigeria’s claims of non-commercial use.

Despite Nigeria’s assertions that the properties served diplomatic roles and housed consular staff, the court highlighted their dilapidated condition as further evidence of their non-diplomatic use.

Timi Balogun, representing Nigeria, voiced strong opposition to the ruling, pointing to the complex nature of international law governing state immunity and diplomatic property rights.

He indicated Nigeria’s intention to appeal, seeking a more comprehensive review by higher courts.