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Nigeria Loses Sovereign Immunity Claim As US Court Upholds $70m Award to Chinese Firm
Nigeria’s claim to sovereign immunity cannot stand in a commercial venture, a US Appeal Court has ruled.
The court rejected Nigeria’s sovereign immunity defence to the enforcement of a $70 million investment treaty award won by Zhongshan Fucheng Industrial Investment Co. Ltd., a Chinese investor, in a free trade zone.
Nigeria had “gruesomely” violated both fundamental and commercial rights of the Chinese firm, judges at the US Court of Appeals in Washington DC ruled.
In a 2-1 verdict delivered on August 9, documents of which are attached, majority ruling affirmed the judgment of the US district court for the District of Columbia that held that the arbitration award is enforceable.
In January 2023, Beryl Howell, the presiding judge of the lower court, dismissed Nigeria’s argument that the court did not have jurisdiction over the case since the country is a sovereign entity.
Howell held that the court has jurisdiction since the United Kingdom (UK), where the $70 million arbitration award was issued against Nigeria, is a signatory to the New York Convention.
In 2010, Zhongshan, through Zhuhai Zhongfu Industrial Group Co. Ltd. (Zhuhai), its Chinese parent company, acquired rights to develop a free trade zone in Ogun state.
A year later, Zhongshan set up Zhongfu International Investment (NIG) FZE (Zhongfu), a Nigerian entity, to manage the project under the permission of the Ogun state government.
However, things took a different turn in July 2016 when the investor accused the state government of abruptly moving to terminate its appointment while attempting to install a new manager for the free trade zone.
Subsequently, Zhongfu initiated an investment treaty arbitration against Nigeria under the bilateral investment treaty between the People’s Republic of China and Nigeria (the China-Nigeria BIT).
The arbitrators had ruled that Nigeria was in breach of its obligations under the China-Nigeria BIT and awarded Zhongshan compensation of around $70 million.
In January 2022, the Chinese company initiated a case to seek enforcement of the arbitration award.
Nigeria pleaded state immunity but was turned away by Sara Cockerill, a high court judge in the UK, who said the country abused the time frame for appealing arbitral awards.
In the majority judgment, the US appellant court held that the final arbitration award is enforceable under the New York convention since the dispute is between “persons” that share a legal commercial relationship.
The court ruled that the Foreign Sovereign Immunities Act (FSIA) arbitration exception stripped Nigeria of the sovereign immunity in the arbitration award case.
“For the foregoing reasons, we hold that the final award is enforceable under the New York convention because it arose out of differences between ‘persons’ that share a legal, commercial relationship,” the majority judgment reads.
“The district court therefore has jurisdiction over this case under the FSIA’s arbitration exception. The judgment of the district court is affirmed.”
The majority judgment was issued by Patricia Millett and Julianna Childs.
In the dissenting judgment, Gregory Katsas, the third judge, argued that when the New York convention was drafted, the word “persons” did not include a sovereign nation.
Katsas held that the action of Ogun State cannot be attributed to Nigeria, adding that the arbitration award “arises solely out of Nigeria’s sovereign acts governed by public international law”.
“Text, legal context, and drafting history all indicate that the word ‘persons,’ as used in the New York Convention, does not include signatory nations acting as sovereigns. I respectfully dissent,” Katsas said.
Three days after the judgment of the US appeal court, a Paris court in France ordered the seizure of three jets belonging to the Nigerian government over the dispute involving the arbitration award to the Chinese firms.
In 2023, a court of appeal in the UK ruled that Nigeria is liable for a $70 million arbitration award in favour of the Chinese firm.
The development means that Nigeria has lost arbitration award cases against the Chinese firm in France, the US, and the UK.
The Nigerian government has accused the Chinese firm of attempting to use deceptive means to acquire the country’s offshore assets.
Agency Report
Below is the detailed judgment:
United States Court of Appeals
The Libyan Football Federation (LFF) has addressed the circumstances behind the extended delay at Al Abraq International Airport, where the Super Eagles of Nigeria were held hostage for over 15 hours, and attributed the situation to routine air traffic and logistical challenges rather than deliberate foul play.
In a statement on Monday via X, the LFF sought to clarify the events, emphasising that the diversion of the Nigerian team’s flight was not intended as a hostile act.
“We firmly reject any claims that suggest foul play or sabotage in this situation,” the LFF said.
Meanwhile, in the most recent development, Super Eagles players and officials have been reportedly set to depart from Libya.
This was disclosed by a sports enthusiast, identified as Pooja Media, via his X handle on Monday, according to The Punch report.
He wrote, “Super Eagles players and all officials are boarding to fly out of Libya to Nigeria. Thank God.”
Confirming this, a player, Bruno Onyemaechi, wrote, “Me and Libya, I don wash my hands commot. Nothing concerns me and una again. Thank God I’m going back.”
The team, held at an abandoned airport for over 15 hours, has resolved not to play the match, citing safety concerns.
Nigeria Football Federation director of communications, Ademola Olajire, confirmed that the team would fly back home.
“Players have resolved not to play the match any longer as NFF officials are making plans to fly the team back home,” Olajire stated.
Four Israeli soldiers have been killed and more than 60 people injured in a Hezbollah drone attack on an army base in central-northern Israel, according to first responders and the Israeli military.
The incident late Sunday local time is one of the bloodiest attacks on Israel since the beginning of the war last October.
The Israel Defense Forces (IDF) said an unmanned aerial vehicle, or UAV, launched by Hezbollah hit an army base adjacent to Binyamina, a town north of Tel Aviv that lies some 40 miles from the Lebanese border.
The four killed soldiers were all 19 years old and in infantry training at the base, the IDF said, adding that eight other soldiers were severely injured.
According to Israel’s Magen David Adom emergency service, a total of 61 people were wounded in the attack, with dozens still hospitalized.
The news comes after Hezbollah said Sunday it had fired a swarm of attack drones on an Israeli infantry training camp in Binyamina.
The Lebanon-based militant group said the attack was in response to deadly Israeli strikes in Lebanon Thursday.
Hezbollah said it had targeted the Golani Brigade, an infantry unit of the Israel Defense Forces (IDF) that has been deployed in southern Lebanon. The claim of responsibility for the attack came shortly after the militant group released an audio message from its slain leader Hassan Nasrallah calling on its members to “defend your people, your family, your nation, your values and your dignity.”
Earlier on Sunday, the IDF said it had intercepted a Lebanon-launched UAV without specifying where. It was not immediately clear whether this was the same incident that led to the injuries.
Israeli air defence systems tend to be very reliable, but on Sunday, there were no reports of alerts in the Binyamina area at the time of the attack, raising questions of how the drone was able to penetrate so deep into the Israeli territory without being spotted.
Hezbollah said it had fired dozens of rockets toward the northern Israeli towns of Nahariya and Acre to engage Israel’s air defense systems, while simultaneously launching the drone swarm.
“These drones broke through the Israel defense radars without detection and reached its target at the training camp of the elite Golani Brigade in Binyamina,” Hezbollah said.
The IDF’s top spokesperson Rear Adm. Daniel Hagari said the military would investigate how the drone got through without raising an alarm at the base.
“We will learn from and investigate the incident,” he said in a video statement from the base. “The threat of UAVs is a threat we are dealing with since the beginning of the war. We need an improvement to our defense,” he added.
Source: CNN
The Court of Appeal has upheld the judgment of the Federal High Court, affirming Martins Amaehwule as the rightful Speaker of the Rivers State House of Assembly.
Recall that the Governor of Rivers State, Siminalayi Fubara, had challenged the judgement of Justice James Omotosho of the Federal High Court Abuja, which affirmed Amaehwule’s leadership.
This ruling is a victory for the camp of former Rivers State Governor Nyesom Wike, who has been at odds with Governor Fubara.
Governor Fubara has also been ordered to re-present the 2024 budget to the Amaehwule-led House of Assembly.
