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New York, USA – A US attraction court docket has approved Zhongshan Fucheng Industrial Funding Co. Ltd. to implement a $70 million arbitration award in opposition to Nigeria. In a 2-1 ruling delivered on August 9, the court docket affirmed the decrease district court docket’s judgment that the award, issued within the UK, is enforceable beneath the New York Conference.
In January 2023, Choose Beryl Howell of the US District Court docket for the District of Columbia rejected Nigeria’s argument of sovereign immunity, ruling that the court docket had jurisdiction as a result of the UK, the place the award was issued, is a signatory to the New York Conference.
Background of the Dispute
In 2010, Zhongshan, by way of its Chinese language dad or mum firm Zhuhai Zhongfu Industrial Group Co. Ltd., obtained rights to develop a free commerce zone in Ogun State, Nigeria. The next 12 months, Zhongshan established Zhongfu Worldwide Funding (NIG) FZE to handle the venture.
Nonetheless, by July 2016, disputes arose because the Ogun State authorities moved to terminate Zhongfu’s appointment and substitute it with a brand new supervisor. Zhongfu then initiated an funding treaty arbitration beneath the China-Nigeria Bilateral Funding Treaty (BIT). The arbitrators dominated that Nigeria breached its obligations beneath the BIT and awarded Zhongshan roughly $70 million.
In January 2022, Zhongshan sought to implement the arbitration award, resulting in Nigeria’s plea for state immunity, which was dismissed by the UK Excessive Court docket. The case was subsequently introduced earlier than the US courts.
US Enchantment Court docket Ruling
The US attraction court docket majority, comprised of Patricia Millett and Julianna Childs, dominated that the arbitration award is enforceable beneath the New York Conference because of the authorized industrial relationship between the events. The court docket discovered that Nigeria’s sovereign immunity was stripped by the International Sovereign Immunities Act (FSIA) arbitration exception.
In dissent, Choose Gregory Katsas argued that the time period “individuals” within the New York Conference didn’t embody sovereign nations and that the arbitration award stemmed from Nigeria’s sovereign acts.
Current Developments
Following the US attraction court docket’s judgment, a Paris court docket in France ordered the seizure of three Nigerian authorities jets over the dispute. Moreover, a UK court docket of attraction has dominated that Nigeria is answerable for the $70 million arbitration award. This collection of judgments displays Nigeria’s ongoing authorized battles with Zhongshan Fucheng throughout a number of jurisdictions.
The Nigerian authorities has accused Zhongshan of utilizing misleading practices to accumulate Nigerian offshore property.
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