Nigeria’s former Minister of Justice and former Attorney General of the Federation, Michael Aondoakaa, has said that the Chinese firm Zhongshan Fucheng Industrial Investment Co. Ltd, were “completely” wrong to seize three of Nigeria’s presidential aircraft, as they are not used for commercial purposes, but are used purely for running of state operations.
Aondoakaa also revealed that the Nigerian government was fully involved in the dispute between Ogun State and Zhongfu, the Nigerian subsidiary of Zhongsang, because of the trade treaty that was signed between the Nigerian Government and the Republic of China in 2001, which allowed access for contracting investors into Nigeria.
The former AGF said this in an interview with ARISE NEWS on Monday where he discussed the legal dispute between the Ogun State government and Zhongfu, a Chinese firm whose contract was revoked under Amosun’s administration, which led to a Paris court ordering the seizure of three jets belonging to the Nigerian government over an arbitration award in favour of the Chinese firm.
He said, “If you look at the issue of attachment of presidential planes, that is where completely, the foreign firms are wrong.”
He went on to explain, “But now, sovereign immunity operates in two ways. What the Appeal Court in US dealt with was the procedure, the procedural aspect. I’m afraid when people will say Appeal Court said, or US said they can attach Nigerian properties everywhere. I don’t think that was its extreme position by those who felt frightened the country. It has to do- recognition of award has to be country by country. When you register, the country will evaluate it. And two areas the country will look at is that, did the arbitrators who rendered the final arbitral award exceed their jurisdiction, or was the arbitral award contrary to public policy. Nigeria is not hinging on the issue of public policy, that is it, but of course, issuing of the issue of sovereign immunity.
“But now, where I have a major quarrel with the Chinese people is that the sovereign immunity, even though after the New York Conventions have been classified into two- absolute sovereign immunity with properties that belong to the state which the state uses for operation of State, not for commercial bases, are immune. They’re considered sovereign immunity. For instance, military hard wares, presidential planes, because presidential planes are not used for commercial purposes. Presidential planes are used basically for state functions, and those ought to ensure absolute sovereign immunity.”
Aondoakaa then revealed that in 2001, a treaty for the Reciprocal Promotion and Protection of Investments was signed between China and Nigeria, which “guaranteed all contracting investors, which is broadly defined, into Nigeria, and gave them even a provision for expropriation, which means you cannot take over their asset.”
He then said that the treaty that was signed in 2001 contained a clause that talked about expropriation, which allowed for compensation if the state takes a step that depreciates investments.
He explained, “Ogun State seems to be part of the country, and when you’re dealing with a treaty, it was the Federal government that actually entered into that investment treaty. It was done in 2001, signed by the Minister of Industry. And I’ve seen the contents of the treaty, very strong contents of the treaty. I was very worried whether the Ministry of Justice, even that of Ogun State or the Ministry of Justice of Nigeria was consulted. The first issue I looked at article 4 of it, which talked about expropriation. That’s a new development in international arbitration, expropriation which means if you enter into agreements and the state takes steps adversely that depreciates your investment, then you can have compensation.
“I don’t know whether they knew what they were signing. That is including even why you have contracted, and the state now changes the laws in such a way that they will operate detrimental to you, it’s there, article 4, and I was shocked that somebody signed it. That is the beginning of the problems we had.
“And then you are dealing with an arbitration. The treaty had three areas, two strong arbitration clauses in paragraph 8 and 9. The best venue we could have got was one of the paragraphs gave a right to court, and these people had attempted to go to court in Nigeria. If we were clever, we would have had a counter claim, even when they withdrew their action, they wouldn’t have resorted to going back to arbitration. But there wasn’t a counter claim, because you have alleged that they violated some of the terms of the contract, that must have been the basis on which Ogun State terminated.
“And therefore, when they filed action in the first instance, Ogun State ought to have raised a counter claim, I do not know why they didn’t, because if they had raised a counter claim, even if you withdraw your action, the counter claim being a separate course of action, it would have remained, and that would have been the live wire.”
Ozioma Samuel-Ugwuezi
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