How Nigeria Lost A $57 Million Jet To Zhongshang Due To 2023 Elections

The dispute between the Federal Government of Nigeria and Zhongshang Fucheng Industrial Investment Ltd, a Chinese company that recently obtained court documents to ground Nigeria’s Presidential jet, has seen a new twist with the revelation of another court judgment between the two parties.

On August 12, it was disclosed that Zhongshang obtained a court order in France that granted the Chinese company authority to seize some of Nigeria’s foreign assets, including three Presidential jets—the Dassault Falcon 7X, a Boeing 737-7N6/BBJ, and the recently purchased Airbus A330-243.

While the jets have been released, a court ruling, seen by Neusroom, has shed more light on the legal battle between the Nigerian government and Zhongshang.

How ‘Election’ Led to Nigeria Losing Jet Plane to Zhongshang

Following its business dealings with the Ogun State government, which fell apart in 2016, Zhongshang launched several legal suits against Nigeria.

In March 2021, a UK court ordered Nigeria to pay Zhongshang $55.5 million in compensation for the expropriation, plus $75,000 for moral damages, fees, arbitration costs, and interest. To enforce this arbitral award, which has now exceeded $90 million, Zhongshan initiated proceedings in various countries, including Quebec, Canada.

According to reports seen by Neusroom, Zhongshan, on January 25, obtained a pre-judgment seizure order for an aircraft located in Quebec.

Reports indicate that the aircraft Zhongshan obtained a legal seizure document for was a Bombardier 6000 type BD-700-1A10, which the Nigerian government had impounded from Dan Etete, a former Nigerian Minister of Petroleum under the regime of Gen. Sani Abacha in 1995, who was convicted as a money-launderer in 2007.

While Nigeria was validly notified of the legal order that empowered Zhongshan to seize Etete’s jet, which was supposedly purchased for $57 million, it later claimed that the 2023 election held in February and the gubernatorial election in March prevented it from responding to Zhongshan’s legal request.

“An election held in March 2023 in this state effectively paralyzed the region for an extended period,” the court ruling stated in Nigeria’s defense as to why it failed to respond on time.

“According to Nigeria’s request, it was only on October 13, 2023, that an Attorney General was appointed, making it difficult to proceed with the current case due to the absence of a designated responsible authority.”

Judge David Collier of the Superior Court of Quebec, in his ruling, said that Nigeria “chose not to appear before the Quebec Court until January 2024,” adding that “the argument that the Ogun elections complicated information transmission and made it difficult to gather information is not convincing.”

Citing other court cases, Collier said that Nigeria has shown a pattern of not responding on time to legal issues when summoned.

“Under these circumstances, the Court cannot accept that Nigeria acted reasonably, under the circumstances, to explain its delay in responding. Here, Nigeria’s delay is simply unjustified. Zhongshan’s claim is valid, and Nigeria’s delay cannot be attributed to a reasonable cause.”

The recent conflict between Zhongshan and the Nigerian government stems from a business deal in which the Chinese company was contracted to build a Free Trade Zone in Ogun State in 2007 during the administration of former Governor Gbenga Daniel.

However, Zhongshan Fucheng reportedly forced out of the deal in 2016 after former Governor Ibikunle Amosun was elected.

While the Nigerian government, in a statement issued by President Tinubu’s spokesperson, Bayo Onanuga, stated that “the Federal Government is not under any contractual obligation with the company,” the government of Nigeria was a party to the motion suit filed by Zhongshan and cannot exempt itself from the case, according to the court ruling.

“It is the State of Nigeria that is being sued and is targeted by the arbitral award. Even though the facts underlying the dispute between the parties occurred in Ogun State, it remains that Nigeria is the party linked to the arbitral award whose enforcement is sought,” the court declared.