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US Court Denies Nigeria Sovereign Immunity Claim, Upholds $70m Award to Chinese Firm

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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:

23-7016-2069169

United States Court of Appeals

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2027: Peter Obi Raises Doubt About Clinching ADC Presidential Ticket

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A former Labour Party presidential candidate, Peter Obi, has expressed reservations over his ability to clinch the African Democratic Congress’ (ADC) presidential ticket for the 2027 elections.

In a video address to his followers, Obi stated that receiving the ADC’s presidential ticket is not guaranteed.

He said: “Someone asked me how I know for sure that the ADC will give me the presidential ticket. I cannot be certain. What matters is that we are committed to a cause.

I keep wondering how we ended up in this situation and what might happen if we decide to stop working on this project.”

“Obi also said he is still committed to his goals, and he hasn’t let any reported threats stop him.

The former Labour Party presidential candidate praised his supporters for their resilience, recognizing the difficulties of working within opposition politics in Nigeria.

Obi thanked everyone who stayed loyal even though they didn’t get much benefit right away.

“I thank you for your sacrifice. It’s not easy to be in the opposition in Nigeria, and I’m thankful to those who keep supporting even when there’s no clear reward,” he said.

He, however, expressed uncertainty about the future, especially concerning political alliances and commitments.

“How can we be certain that the people we’re working with right now won’t leave us behind tomorrow? I wish we could be sure, but we can’t,” he said.

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Terrorism: Tinubu Seeks UK’s Assistance Amid Challenges

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President Bola Tinubu, on Wednesday, solicited partnership with the United Kingdom to crush terrorism in the Sahel before it engulfs the region.

“Our West African region faces complex terrorism challenges with roots in the Sahel,” Tinubu told King Charles III, Queen Camilla, Prince William, and elite guests, at a state banquet.

Speaking as the first Nigerian leader at the historic venue, Tinubu said: “As one of the largest nations within the Commonwealth, Nigeria looks forward to contributing constructively to the continued growth and vitality of this global community.

“Our West African region faces complex terrorism challenges with roots in the Sahel.  Nigeria carries an enormous responsibility to help safeguard regional stability. In confronting these threats, partnership with the United Kingdom remains essential and I look forward to my meeting with Prime Minister Kier Starmer tomorrow.

“Despite these challenges, Nigeria approaches the future with hope and confidence. We are a nation of diverse and vibrant people, of young people dreaming big, of entrepreneurs with a global outlook, and of a hopeful people determined to realise their full potential.”

The Nigeria’s President said it was an honour to stand before the royal family, representing the people of Nigeria to reaffirm the enduring bonds of friendship, history, and shared purpose that have united Nigeria and the United Kingdom for several centuries.

“Allow me first to express my sincere appreciation to Your Majesty and to Her Majesty, The Queen for the warmth and generosity extended to me, my wife, Oluremi, and the Nigerian delegation.

“As the first Nigerian leader to speak here at Windsor Castle, which has served the British Crown for nearly a millennium, is particularly historic. Windsor has stood as a symbol of continuity, witnessing the steady evolution of institutions that have shaped governance, culture, and public life not only in Britain but far beyond these shores.

“Nigeria and the United Kingdom have shared more than just history; our two nations share a vision of progress and resilience. Today, we continue that journey, committed to building a future rooted in partnership, mutual respect, and common values.

“Standing here in Windsor Castle, one cannot help but reflect on Britain’s impact on modern democratic governance worldwide.”

He explained further: “The Magna Carta of 1215 laid the early foundations for the rule of law and the development of parliamentary democracy, establishing enduring ideals around liberty, accountable government, and civic responsibility.

“Great British thinkers and writers such as Thomas Hobbes, John Locke, and Edmund Burke helped to propagate those democratic ideals. Their influence continues to resonate to this day.

“The literary genius of William Shakespeare and other writers such as Charles Dickens, has enriched and shaped the English language, spoken by over 1.5 billion people worldwide.

“In Nigeria, elements of these traditions continue to inform the institutional foundations of our own republic. Our courts draw upon legal traditions rooted in English common law. Our parliamentary institutions reflect constitutional practices that evolved here over centuries. Our civil service structures have also drawn upon administrative models developed in Britain and adapted to Nigeria’s own national context.

“While institutions matter greatly, our people remain the strongest bridge between our two countries.”

He said the Nigerian community in the United Kingdom has become one of the most dynamic diaspora communities worldwide, adding: “Nigerians contribute enormously to the vitality of this nation.  Within the National Health Service, Nigerian doctors and nurses play an indispensable role in delivering healthcare. Nigerian-trained doctors are among the largest groups of international medical professionals serving the NHS.”

He noted the exploits of Nigerians in the country especially in sports, saying: “in sport, rugby players such as Maro Itoje, footballers including Bukayo Saka and Eberechi Eze, and champion boxer Anthony Joshua, illustrate the remarkable human connection that links Nigeria and the United Kingdom.

“Our partnership is further strengthened through the Commonwealth of Nations, which connects 56 countries under Your Majesty’s leadership.”

He expressed confidence that the friendship between Nigeria and the United Kingdom will continue to grow.

“Finally, Your Majesty, I wish to express Nigeria’s deep gratitude to this great nation for the refuge and support it extended during the dark years of military dictatorship. Like many Nigerians involved in the pro-democracy struggle, I found safety here, and I recall that my residence was placed under Metropolitan Police surveillance for protection following threats from agents of the junta.

“That solidarity remains etched in our collective memory, and it is deeply humbling for me to stand before Your Majesty today as the President of a democratic Nigeria.

“On behalf of the Government and people of Nigeria, I thank Your Majesty, Her Majesty The Queen, Prince William and Catherine, the Princess of Wales, other members of the Royal Family, and the people of the United Kingdom for their longstanding friendship.

“In the spirit of friendship and our shared destiny, I invite you all to raise a glass with me:

“To the special bond between Nigeria and the United Kingdom,  and to the bright future that we shall build together.”

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Bala Mohammed Debunks Defection Rumours, Affirms Loyalty to PDP

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Bauchi State governor, Bala Mohammed, has dismissed speculation linking him with a possible defection to the ruling All Progressives Congress (APC), reiterating his commitment to the Peoples’ Democratic Party (PDP).

The governor, who also serves as Chairman of the PDP Governors’ Forum, had recently been the subject of reports suggesting he might be considering leaving the opposition party, with claims that such a move could occur within the week.

However, while dismissing the rumour shortly after presiding over the swearing-in of 17 newly appointed Permanent Secretaries at the Government House in Bauchi on Wednesday, Mohammed downplayed the claims, stressing that he had made no official statement indicating any intention to quit the PDP.

He maintained that the reports are unfounded, reaffirming his continued membership of the party.

“I find it amusing that even when I have not said anything officially, people are already discussing me as if I have moved,” he said.

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