The attorneys representing Nigeria in its high-stakes battle to stave off asset seizures in the United States have accepted the country’s culpability in the messy gambit that led to the harassment and expulsion of Chinese investors who administered a multibillion-naira free trade district in Ogun State, court documents seen by Peoples Gazette said, contradicting a key element of public statements issued separately by the Tinubu administration and former Governor Ibikunle Amosun over the weekend. 

The solicitors from Squire Patton Boggs LLP, a multinational white shoe law firm, said it was obvious enough that the Nigerian police and immigration department harassed and deported, respectively, the Chinese expatriates who were trying to reclaim control of Ogun-Guangdong Free Trade Zone after Mr Amosun, in his capacity then as governor, arbitrarily dislodged them from the facility in Igbesa, a budding ICT hub just east of industrial town Agbara. 

“Ogun State apparently abrogated the contracts and harassed the companies out,” Boggs’ partners Keith Bradley and Raul Manon said in their appeal motions on behalf of Nigeria before the United States Court of Appeals for the District of Columbia in Washington.

The November 15, 2023, motion had sought an urgent reversal of a federal judge’s order that blocked Nigeria from asserting its sovereign immunity when the Chinese firm Zhongshan travelled to the U.S. to seek enforcement of a 2021 United Kingdom court order that found Nigeria and Ogun State liable for abuses and breach of contract and awarded about $60 million in compensation and arbitration costs to the firms’ executives.

The U.S. judge, Beryl Howell, said in her January 26, 2023, order that her court had jurisdiction over the matter and Nigeria cannot quash the Chinese investors’ lawsuit under the Foreign Sovereign Immunities Act. The court also found that Nigeria had breached a 2001 treaty it signed with China to guarantee seamless trade between the citizens of both countries, as well as the New York Convention that governs international trade and arbitration.

In their appeal on behalf of Nigeria, the Boggs’ attorney said the claim Mr Amosun’s deployment of police and immigration against the Chinese investors was not sufficient justification for stripping Nigeria of its sovereign immunity rights under the Foreign Sovereign Immunities Act. 

In Nigeria, the police and immigration are under the direct and exclusive control of the federal government. While Ogun State, as with each of the country’s 36 states, is an autonomous entity, it does not have its own police or immigration, and can only obtain the services of those agencies with the permission of the central government. 

However, Nigeria in the U.S. sought to extricate itself from Ogun State’s actions without necessarily debating the merits of the Chinese investors’ case against the state. 

“Nigeria’s role with respect to Zhongshan was solely as a sovereign, not as a government acting in the private sphere. That Ogun State had contracts and joint ventures with Zhongshan does not count as private activity by the Federal Republic itself, because Ogun is an independent government, whose actions cannot be attributed to Nigeria under private law or under U.S. law.,” the lawyers argued.

Nigeria further argued that the Foreign Sovereign Immunities Act, New York Convention and Nigeria-China Bilateral Investment Treaty of  2001 did not cover the types of redress the Zhongshang was seeking in the U.S.

“An arbitration award arising from Nigeria’s purely sovereign activities is not within the scope of Article I section 1 of the Convention; under the plainly stated understanding of the countries that developed it, a sovereign is not a “person,” for Convention purposes, with respect to its jure imperii actions.

“Moreover, regardless of the court’s interpretation of Article I section 1, in the United States an award is subject to the Convention only if the dispute arose from a “legal relationship … which is considered as commercial.” A treaty between sovereign nations does not qualify, and Zhongshan cannot point to any other legal relationship it had with Nigeria,” 

Consequently, the lawyers argued that the appeals judges should vacate Ms Howell’s decision and order her to dismiss the case against Nigeria on sovereign immunity grounds. 

But in its ruling, the three-judge appellate panel found two-one that Nigeria was liable under existing laws and treaties, allowing the Chinese investors to proceed with their legal efforts to seize Nigeria’s assets in the U.S. to cover their $60 million arbitration award from the UK.

“Whether the arbitration exception applies in this case therefore turns on whether a treaty—specifically, the New York Convention—governs the Final Award,” the majority, Patricia Millett and Michelle Childs, said. “We hold that it does because the final award arose from (1) a legal relationship, (2) that is considered as commercial, and (3) is between persons.”

The dissenting judge, Greg Katsas, said Nigeria should not be stripped of its immunity because the targeted assets also came under the country’s sovereign umbrella. 

A lawyer consulting for Nigeria on the matter told The Gazette over the weekend that the country may appeal the matter to the full appellate panel in the District of Columbia circuit before considering whether or not an appeal to the U.S. Supreme Court would be necessary. 

The case has plunged Nigeria into confusion after it emerged that the Chinese had already trapped aircraft in Nigeria’s presidential air fleet in France as part of their enforcement strategy. 

Although Mr Amosun admitted transferring the free trade zone to Zhongfu, a subsidiary of Zhongshan, without due diligence in 2012, which he later rescinded in 2016, he has equally maintained no wrongdoing in the matter and urged the Tinubu administration not to give in to Zhongshan’s demands. 

Both the former governor and the federal government denied any involvement in the harassment of the Chinese expatriates, even though text messages were admitted into court proceedings in Europe and the U.S. that suggested threats to Zhongfu’s executives from Nigerian officials. 

Mr Amosun and presidential spokespersons did not return The Gazette’s requests for comments about Nigeria’s lawyers’s submission in the U.S. that Ogun State used federal agencies to harass and deport the Chinese expatriates.