Federal Government Collaborates With Ogun State Government to Challenge Paris Court Order

The Federal Government and Ogun State Government have initiated plans to vacate the court order obtained by the Chinese company on March 7, 2024, and August 12, 2024, respectively, with the aim of securing the release of the seized presidential jets.

This situation is similar to the order obtained by Process and Industrial Development Limited (P&ID) in London to secure an $11 billion judgment debt from Nigeria, which the Federal Government eventually succeeded in having vacated.

The Ogun State Government is said to have entered into a contract with Zhongshan to manage a free-trade zone in 2007, but the parties entered into a dispute in 2015, and arbitration commenced in 2016. By 2019, it was reported that the arbitration hearing had been concluded, and the Arbitral Panel had awarded over $60 million against the Federal Government of Nigeria, a co-defendant, despite the fact that Zhongshan had only built a perimeter fence around the free-trade zone.

Based on legal advice, the Ogun State Government was said to have resolved to resist the enforcement of the award. It was also gathered that the resistance was successful in eight different jurisdictions, as there are pending appeals against recognition orders issued in both the United States and the United Kingdom.

The Government of Ogun State and Zhongshan, a foreign entity, have been engaged in negotiations to reach a settlement on reasonable terms. The last meeting, which took place in September 2023 in London, lasted for three days and was attended by several officials from Ogun State, including Governor Dapo Abiodun and the Attorney-General/Minister of Justice, Prince Lateef Fagbemi. Initially, Zhongshan exhibited a willingness to consider Ogun State’s offer.

However, this cooperative stance was surprisingly reversed by the second day, as Zhongshan insisted that the Government must pay the full arbitration debt. This development led to a breakdown in the mediation process, with the parties agreeing to meet again in the first quarter of the current year. Since then, Zhongshan has been evasive and has instead pursued a series of enforcement proceedings. 

The legal team appointed by the Federal Government of Nigeria and the Government of Ogun State have successfully opposed these actions.
In cases where Zhongshan has obtained ex-parte orders, the Government of Ogun State has successfully set aside the orders. Despite the challenges, the Government of Ogun State has remained committed to pursuing a reasonable settlement option. To this end, a letter was recently sent to Zhongshan last week. Zhongshan has since responded, but only after obtaining the latest illegal order.

In a bid to address the situation, the Presidency stated that it is collaborating with the Ogun State Government to address what it has described as a frivolous order. The Presidency has acknowledged the order issued by a court in France and is working closely with the Ogun State Government to address this matter in a constructive and appropriate manner.

The Presidency has characterized the order as frivolous, indicating that it considers the order to be without substantial merit or justification. Through this collaborative effort with the Ogun State Government, the Presidency aims to resolve the issue in a responsible and efficient manner, upholding the principles of good governance and the rule of law.