While the legal battle between the Nigerian government and a Chinese firm, Zhongshan Fucheng Industrial Investment Co. Limited, continues, an international lawyer and former presidential candidate of the Social Democratic Party (SDP) in the 2023 general election, Prince Adewole Ebenezer Adebayo, in this interview, bears his mind on the judgment and other issues. Excerpts.
In all of this quagmire, where do you think things went wrong between the Ogun State government and the Chinese firm, leading to the seizure of the federal government’s assets?
Things went wrong when the company and the state government which were supposed to be partners became opponents and started litigating.
But sometimes, these businesses outlast the tenure of the incumbent governor, and the successor might not understand the seriousness and say we terminate the contract and say we don’t want you here anymore. But internationally, when you engage investors and you sign these contracts, you are not only signing commercial contracts, you are also signing treaties, but if there is a dispute between the government and the investor, the investor may decide to sue on their own, in a regular court, or it may go into arbitration, or go into state treaty arbitration whereby you come from Nigeria and you are doing business in China, there is an agreement internationally which Nigeria is a signatory and China is a signatory, where they say if our citizen is doing business in the other country, then they can do arbitration through the mechanism of the treaty.
So, the issue we need to understand, however, is that the dispute is not originally a federal government obligation. It is an obligation for Ogun State. But under public international law, subdivisions, subsidiaries, and sub-nationals are not recognised internationally. So, if a state out of the 36 states in Nigeria has an international obligation, Nigeria will be the one to be held to account. That is where Nigeria is implicated in the matter.
We also need to know that it is not a loan. It is not as if Nigeria took a loan and used any of these national assets as collateral. No, it was business that was supposed to be done between the Ogun State Government and the Chinese private firm which has gone to arbitration to allege that the Ogun State Government breached the contract by stopping them from making progress and they have suffered losses and both parties went to arbitration.
The second stage where it went wrong is that when you go to arbitration and the arbitration award is against you, you should try for the sake of your reputation, pay. But on some occasions, the state entity involved may be advised by the lawyers that the arbitrators made a mistake, that the arbitrators misconducted themselves, or that they went outside their jurisdiction, so, some of these things may go into litigation. And sometimes, it is just a lack of political will to deal with the issue, or they are dealing with it casually.
The interim attachment of the presidential jets doesn’t mean that the jets have been lost because, under international law, assets of the federal government used by the government for diplomacy and monies kept in our Central Bank use for central banking activities are immune. No court at any time can attach them. I want us to understand that clearly. So, when you go to court for an interim order, typically only one side is heard, the court has not heard from Nigeria’s side, so the Chinese firm going to court to say that these are aircraft like any other aircraft, they are for maintenance in France and any person, whether you are in government or not can bring your aircraft for maintenance and seize the aircraft. So, the court might be inclined to just put a temporary seizure and serve notice on Nigeria to come and appear. I believe that as the law stands, once Nigeria appears there and can demonstrate, especially with the assistance of the foreign ministry of the French government, that these are diplomatic assets, the court will lift the seizure. That does not mean you should not pay your judgment debt when you have gotten finality in litigation but typically, you do not attach monies or assets belonging to Central Banks and you do not attach assets or money or property belonging to a sovereign and Nigeria is a sovereign headed by the president who is using it for diplomacy.
In all of this, what do you think is the worst-case scenario for Nigeria in terms of payment in this ongoing case?
The worst-case scenario is that Nigeria will pay the arbitration award or a portion of it. As lawyers, it is very difficult to second guess when you are not the one handling the matter because you will assume that the lawyers to the federal government, now that they became arbitration internationally, and the lawyers to the Ogun State government will know enough law to advise them. But from my experience, because of the position where the Chinese company is now, I have been in that position against the Attorney General of Nigeria on many occasions such that I had threatened to seize assets before. In fact, in the past, I had seized the assets of this same government in London.
What I can say generally as a citizen, if I can advise the government is that, be careful of your commercial reputation, because you are running a neo-liberal government and most of your macro-economic policies are dependent on attracting foreign direct investment and foreign portfolio investment and in that kind of situation, you don’t want to be seen as a tough cookie, difficult people to do business with, because Nigeria has very good lawyers.
Nigeria is highly litigious. It is not today. It has been like that for many years. There is a case where Paul Danny of England passed some negative comments about Nigeria on our attitude towards meeting our obligation. So, Nigeria is known to be a tough customer such that when they owe you, they don’t want to pay as they will argue it to the end. On many occasions, they get it right, like in the case of PandID. It would have been a disservice to the country to pay all that humongous amount of money without scrutiny. That scrutiny saved the country massive income, saved the country a lot of our wealth, and saved millions of people from going into poverty for having to pay that 13 billion dollars, which we did not have. But occasionally, when you also challenge other ones, you get into tough situations, but it is an embarrassment that is temporary.
I believe that in the next proceeding following this, these aircraft will be released, but that doesn’t mean that releasing the aircraft will extinguish the obligation to pay any judgment debt.
We must have a system whereby we can convince the international community that we are serious people, one governor should not come and sign and if another governor comes, either because of politics, or other problems not associated with the investor, you cancel the investment. Many Nigerians have lost assets, and many international people have lost assets. I have been a victim of it such that on many occasions you bring investors to the country, they are doing well and being applauded, then the next government comes, whether due to non-attention, politics, or malice or mischief, then they throw the people out and then trouble starts.
The most important lesson to learn is to make our courts fair and respected so that investors and partners can agree to do their litigation in Nigeria because the tendency is that people just believe that the Nigeria court system is too slow and the system is not going to give you justice and everybody insists on having international arbitration clauses in their agreement.
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That is making us lose money and reputation and lose an opportunity to resolve issues domestically.
It appears Nigeria may be fighting this battle in multiple jurisdictions as the Chinese firm is threatening to take the battle to other countries like the UK. How difficult do you think this could pose for Ogun State and Nigeria, legally speaking?
For Ogun state, Nigeria is the father and is the guarantor. Internationally, nobody knows Ogun State, I don’t think it has any assets internationally that can be exposed. The most that can happen to Ogun State is that the Attorney-General may insist that he is going to deduct the money from Ogun State’s money from the FAAC. That is it. But these are pressure tactics, so it doesn’t mean that going to the UK, America, and everywhere, it is going to get you the asset because the laws are very clear.