NEWS
US Court Backs French Court’s Affirmation Of $70m Arbitration Award Against Nigeria
A U.S. Appeal Court court has granted Zhongshan Fucheng Industrial Investment Co. Ltd. permission to enforce a $70 million arbitration award against Nigeria.
In a 2-1 decision on August 9, the court upheld a previous ruling by the U.S. District Court for the District of Columbia, affirming the enforceability of the award.
In January 2023, Judge Beryl Howell, who presided over the lower court, rejected Nigeria’s claim that the court lacked jurisdiction due to its status as a sovereign state.
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Howell ruled that the court does have jurisdiction, noting that the United Kingdom, where the arbitration award was issued, is a signatory to the New York Convention, which governs the enforcement of international arbitration awards.
In 2010, Zhongshan Fucheng Industrial Investment Co. Ltd., through its Chinese parent company, Zhuhai Zhongfu Industrial Group Co. Ltd., secured rights to develop a free trade zone in Ogun State, Nigeria.
By the following year, Zhongshan established Zhongfu International Investment (NIG) FZE, a Nigerian entity, to manage the project with the approval of the Ogun State government.
However, in July 2016, tensions arose when the investor accused the state government of abruptly attempting to terminate its role and replace it with a new manager for the free trade zone.
In response, Zhongfu initiated an investment treaty arbitration against Nigeria under the bilateral investment treaty (BIT) between China and Nigeria.
The arbitrators concluded that Nigeria had violated its obligations under the China-Nigeria BIT and awarded Zhongshan approximately $70 million in compensation.
In January 2022, the Chinese company filed a case to enforce the $70 million arbitration award.
Nigeria argued for state immunity, but Sara Cockerill, a UK high court judge, dismissed the plea, stating that Nigeria had misused the time allowed for appealing arbitral awards.
In its majority judgment, the U.S. appellate court ruled that the arbitration award is enforceable under the New York Convention, as the dispute involves “persons” engaged in a legal commercial relationship.
The court further determined that the arbitration exception under the Foreign Sovereign Immunities Act (FSIA) nullified Nigeria’s claim to sovereign immunity in this 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 written by Judges Patricia Millett and Julianna Childs.
In his dissenting opinion, Judge Gregory Katsas argued that the term “persons,” as understood when the New York Convention was drafted, did not include sovereign nations.
He also asserted that the actions of Ogun State should not be imputed to Nigeria, noting that the arbitration award stems entirely from Nigeria’s sovereign acts under public international
Katsas said, “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.
Just three days after the U.S. appeal court’s ruling, a Paris court in France ordered the seizure of three jets owned by the Nigerian government in connection with the $70 million arbitration award owed to the Chinese company.
In 2023, a UK court of appeal also held Nigeria liable for the same arbitration award in favor of the Chinese firm.
This outcome means Nigeria has now lost arbitration award cases related to the dispute in France, the U.S., and the UK.
The Nigerian government has accused the Chinese firm of trying to use deceptive tactics to gain control of the country’s offshore assets.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns over alleged monopolistic practices by Dangote Refinery, following a public dispute about fuel pricing in the downstream petroleum sector.
Recall that the refinery, Africa’s largest, recently disclosed its petrol pricing at N990 per litre in trucks and N960 per litre into ships, a move it justifies as being in line with international rates.
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PETROAN, however, sees this as an attempt to suppress competitors and dominate the Nigerian market.
The rift began when Dangote Refinery claimed that complaints from marketers regarding its pricing were fueled by intentions to import cheaper, potentially substandard products.
In response, PETROAN strongly rejected these allegations, suggesting that Dangote’s claims are tactics designed to maintain a monopoly in the sector.
Joseph Obele, PETROAN’s spokesperson, stated that the association remains committed to importing high-quality products at more competitive rates to ensure affordability for Nigerian consumers.
According to PETROAN, competition in the market is essential for achieving fair pricing, and any attempt to stifle it would be detrimental to consumers.
They argue that Dangote Refinery’s pricing should reflect production costs and fair margins rather than international benchmarks, especially given concessions granted by the government for the refinery’s establishment.
PETROAN also announced its plans to partner with foreign refineries and financial backers to import premium-quality petroleum products at prices below current rates.
The association aims to enter the market by December 2024, pending necessary regulatory approvals.
“The allegations that PETROAN will import substandard products are unfounded and aimed at creating an unfair playing field,” the statement read.
PETROAN warned that similar claims in the past had led to significant price hikes when competitors were pushed out, emphasizing that the entry of new players into the market would lead to more competitive pricing and ultimately benefit Nigerian consumers.
PETROAN expressed appreciation for President Bola Tinubu’s commitment to revitalizing Nigeria’s state-owned refineries and urged the government to consider privatizing the Port Harcourt and Warri refineries once rehabilitation is complete.
The association believes a transparent privatization process will help strengthen Nigeria’s downstream sector and counter monopolistic tendencies.
To address the ongoing pricing challenges in the sector, PETROAN called on the government to convene a comprehensive meeting of industry stakeholders, including major associations like IPMAN, DAPPMAN, MEMAN, NUPENG, and PENGASSAN.
PETROAN believes that collaboration among these groups will be instrumental in establishing a sustainable and competitive pricing framework for petroleum products in Nigeria.
Sultan of Sokoto, Sa’ad Mohammad Abubakar II, has called on Nigerians to avoid publicly criticizing their leaders, instead urging citizens to place their trust in God to address leadership concerns as He deems fit.
Speaking at the Regional Conference on Climate Change-Induced Conflicts in Northern Nigeria, organized by the Kaduna State Bureau of Interfaith in collaboration with International Alert, the Sultan emphasized faith and patience in navigating the country’s challenges.
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Acknowledging Nigeria’s current economic and social hardships, the Sultan encouraged continuous prayer, not only for the nation but for its leaders as well.
“Even though many feel times are particularly hard, we believe relief will come. Let’s increase our prayers for our leaders, trusting God to address them in His way,” he said, expressing hope that divine intervention could bring stability and prosperity.
The Sultan reminded political leaders of their ultimate accountability to God, cautioning that they will stand alone on the Day of Resurrection, with only their deeds to support them.
“On that day, every leader will stand alone. Governors, advisers—none will have support except their own deeds. Let us act with a deep sense of responsibility and fear of God,” he stated.
Addressing religious leaders, he warned against misleading their followers for personal gain, underscoring the trust many place in their religious guidance.
“Only God can save any human being,” he said, encouraging Nigerians to remain faithful and discerning in their spiritual beliefs. “Focus on worshiping Allah and leave the rest to Him. Don’t follow those who might lead you astray.”
With leaders from various religious communities, including the President of the Christian Association of Nigeria (CAN), in attendance, the Sultan called for unity, resilience, and communal effort to tackle pressing issues such as climate change, poverty, and insecurity in the northern region.
He praised the North’s history of unity and resilience, warning against divisive narratives that threaten communal harmony. “When we are united, we can face any challenge and build a prosperous community,” he asserted.
The Sultan’s remarks come amid ongoing social and environmental issues in the region, including a recent surge in climate-related challenges that have exacerbated poverty and security threats.
In light of these issues, he called on both Muslims and Christians to intensify their prayers, saying, “Our country faces many challenges, and we must turn to God in prayer. Let us intensify prayers in our mosques and churches.”
In a decisive move, President Bola Tinubu has ordered the immediate release of all minors detained by police during the recent #EndBadGovernance protests.
The directive, announced by Minister of Information and National Orientation, Mohammed Idris on Monday, underscores the government’s commitment to protecting children’s rights and ensuring justice.
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Idris confirmed that President Tinubu’s directive prioritizes the welfare of detained minors, instructing the Ministry of Humanitarian Affairs to facilitate their safe reunification with their families.
A committee led by the Ministry of Humanitarian Affairs will be established to oversee the welfare of the released minors and ensure compliance with the president’s orders.
Additionally, President Tinubu has directed a formal investigation into the actions of law enforcement agencies involved in the arrests.
The president emphasized that any misconduct uncovered during the investigation will result in disciplinary action, affirming his administration’s dedication to accountability within law enforcement.
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