US Court Backs Chinese Firm in Seizure of Nigeria’s Assets Over Ogun State Contract Dispute

A United States court has granted an appeal to Zhongshan, a Chinese company that had earlier secured an order to seize Nigeria’s presidential jets in Europe following a contract dispute with the Ogun State government.

The contract breach, involving the development of a free trade zone, led to legal actions by Zhongshan in multiple countries. After a French court granted the company orders to seize Nigeria’s European assets, including a newly acquired $100 million jet, the Chinese firm sought similar enforcement in the United States.

According to a report from *The Whistler*, Nigeria attempted to claim sovereign immunity in the US court, a defense it also used in European jurisdictions. However, the US court rejected this argument, authorizing the Chinese consortium to proceed with the seizure of Nigeria’s assets abroad.

The decision, delivered on August 9, 2024, by the US Court of Appeals for the District of Columbia, came after judges found that Nigeria had violated its agreement with the Chinese firm. The original dispute dates back to a ruling in the United Kingdom in 2021, where the court awarded Zhongshan $55.6 million in compensation, plus additional damages and fees.

Zhongshan’s move to enforce the UK judgment in the US prompted Nigeria to argue that its sovereign immunity should prevent the case from being heard. However, the court ruled that Nigeria, as a signatory to the New York Convention, could not invoke immunity in this instance, especially after backing Ogun State in the breach of contract.

In their majority decision, Judges Patricia Millett and Michelle Childs stated that the New York Convention applied to the arbitration award, noting that the dispute arose from a commercial legal relationship between Zhongshan and Nigeria. The minority opinion, delivered by Judge Greg Katsas, argued that Nigeria’s assets should be protected under sovereign immunity, but this view did not prevail.

Nigeria has yet to respond to the ruling but retains the right to appeal to the US Supreme Court. Should Nigeria fail to appeal or lose the appeal, the case may proceed in the lower courts, potentially leading to the confiscation of Nigerian assets abroad.