A commercial court in London, United Kingdom, has granted Zhongshan Fucheng Industrial Investment Co. Ltd, a Chinese firm, final charging orders over two residential properties owned by the Nigerian government in the UK.
Crimewatchnewspaper reports that the properties, worth £1.7 million, are located in Liverpool and have been rented out to residential tenants.
The Chinese firm is seeking to enforce a $70 million investment treaty award against Nigeria for breaching the China-Nigeria bilateral investment treaty (BIT).
The dispute originated in 2010 when Zhongshan, through its parent company Zhuhai Zhongfu Industrial Group Co. Ltd (Zhuhai), acquired rights to develop a free trade zone in Ogun state, Nigeria.
However, the project was terminated by the Ogun state government in 2016, leading Zhongshan to initiate investment treaty arbitration against Nigeria.
The arbitrators ruled in favor of Zhongshan, awarding the company $70 million in compensation.
Nigeria attempted to appeal the decision but was unsuccessful. In January 2022, Zhongshan initiated a case in the UK to seek enforcement of the arbitration award. Nigeria pleaded state immunity, arguing that the properties were used for diplomatic purposes and therefore exempt from enforcement.
However, the court ruled that the properties did not qualify for sovereign immunity as they were leased to residential tenants and had not been used for diplomatic purposes in over 34 years.
Nigeria’s counsel, Timi Balogun of Squire Patton Boggs, expressed disagreement with the decision and plans to appeal, citing complex public international law issues related to state immunity and the right of a foreign state’s High Commission to own and manage properties in England and Wales.
The appeal will be heard by a higher court, which will consider these issues and potentially set a precedent for future cases involving sovereign immunity and investment treaty enforcement.
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