By Sunday Ani
Following the legal tussle between Ogun State and Federal Government against the Chinese company, Zhongshan Fucheng Industrial Investment Company Limited, which has led to the seizure of the Federal Government’s aircrafts in Paris, France, Prince Adewole Adebayo, the presidential candidate of the Social Democratic Party (SDP) in last year’s election, has advised the Federal Government against offending a business partner like China that has business dealings in many fronts with Nigeria.
In this interview, Prince Adebayo, who described the development as an international embarrassment on Nigeria, spoke extensively on the case and the possibility of Nigeria emerging victorious at the end of the day.
Where do you think things went wrong between the Ogun State Government and the Chinese firm, which has led to the seizure of Federal Government’s assets?
Things actually went wrong when the company and the state government that were supposed to be partners became opponents and started litigating. Sometimes, these businesses outlive the tenure of the incumbent governor and the successor might not understand the seriousness and decide to terminate the contract. But internationally, when you engage investors and you sign these contracts, you are not only signing commercial contracts, you are also signing treaties in some situations, and if there is a dispute between the government and the investor, the investor may decide to sue on their own, in a regular court, or it may go into arbitration, or state treaty arbitration. In this case, as a Nigerian doing business in China, there is an agreement internationally which Nigeria and China are signatories to, where they say if our citizen is doing business in the other country, they can do arbitration through the mechanism of the treaty. So, the issue we need to understand is that the dispute is not originally a Federal Government obligation; it is an obligation of Ogun State. But, under public international law, subdivisions, subsidiaries and subnational bodies, are not recognised internationally. So, if a state out of the 36 states in Nigeria has an international obligation, Nigeria will be the one to be held to account. That is where Nigeria is implicated in the matter. We also need to know that it is not a loan; it is not as if Nigeria took a loan and used any of these national assets as collateral. No, it was business that was supposed to be done between the Ogun State Government and the Chinese private firm, which has gone to arbitration to allege that the Ogun State Government breached the contract by stopping them from making progress and they have suffered losses and both parties went to arbitration. The second stage where it went wrong is that when you go to arbitration and the arbitration award is against you, you should try for the sake of your reputation to pay. But, on some occasions, the state entity involved may be advised by the lawyers that the arbitrators made a mistake, or that they misbehaved themselves and went outside their jurisdiction. So, some of these things may go into litigation, and sometimes, it is just a lack of political will to deal with the issue and they are dealing with it casually. The interim attachment of the presidential jets doesn’t mean that the jets have been lost because under the international law, assets of the Federal Government used by the government for diplomacy and monies kept in our central bank for the central banking activities are immune. No court at any time can attach them. I want us to understand that clearly. So, when you go to court for an interim order, typically only one side is heard, the court has not heard from Nigeria’s side, so the Chinese firm going to court to say that these are aircrafts like any other aircraft, and seize the aircraft will not work. They are for maintenance in France and any person, whether you are in government or not can bring your aircraft for maintenance. So, the court might be inclined to just put a temporary seizure and serve notice on Nigeria to appear. I believe that as the law stands, once Nigeria appears and can demonstrate, especially with the assistance of the foreign ministry of the French Government that these are diplomatic assets, the court will lift the seizure. That does not mean you should not settle your counter-party, it doesn’t mean you should not pay your judgment debt when you have gotten finality in litigation, but typically, you do not attach monies or asset belonging to central banks and you do not attach asset or money or property belonging to a sovereign nation, and Nigeria is a sovereign nation headed by a president who is using it for diplomacy.
In all of this, what do you think is the worst case scenario for Nigeria in terms of payment in this ongoing case?
The worst case scenario is that Nigeria will get the arbitration award or a portion of it. As lawyers, it is very difficult to second guess when you are not the one handling the matter. One will assume that the lawyers to the Federal Government know that they have become arbitrators internationally and the lawyers to the Ogun State Government will know enough law to advise them. But, from my experience, I understand the position of the Chinese company is now because I have been in that position against the Attorney’General of Nigeria on many occasions such that I have threatened to seize assets before. In fact, in the past, I have seized the assets of this same government before in London. What I can say generally as a citizen, if I can advise the government is that they should be careful of their commercial reputation, because they are running a neo-liberal government and most of their macroeconomic policies are dependent on attracting foreign direct investment and foreign portfolio investment, and in that kind of situation they wouldn’t want to be seen as a tough cookie, difficult people to do business with, because Nigeria has very good lawyers. Nigeria is highly litigious. It is not today, it has been like that for many years. There is a case where Paul Danny of England passed some negative comments about Nigeria on our attitude towards meeting our obligation. So, Nigeria is known to be a tough customer such that when they owe you, they don’t want to pay; they will argue it to the end. On many occasions, they get it right, like in the case of P&ID. It would have been a disservice to the country to pay all that humongous amount of money without scrutiny. That scrutiny saved the country massive income, saved the country a lot of our wealth and saved millions of people from going into poverty for having to pay $13 billion, which we did not have. But, occasionally, when you also challenge other ones, you get into tough situations but it is an embarrassment that is temporary. I believe that in the next proceeding following this, these aircrafts will be released, but that doesn’t mean that releasing the aircrafts will extinguish the obligation to pay any judgment debt. No, it means that Nigeria can breathe easy and then can now focus on how to negotiate. Additionally, the Attorney-General should be careful in advising the attorneys general. They should know that if they are entering into any obligation with international people, and sometimes even with Nigerians, if they agree to arbitration, they should be careful to realise the implications. I think the Attorney-General of Nigeria should have advised the Ogun State Government, one way or the other, on how to resolve this matter because none of the 36 states in Nigeria is known in the international arena. So, we must have a system whereby we are able to convince the international community that we are a serious people. One governor should not come and sign a contract, only for another governor to come, either because of politics, or other problems not associated with the investor, and cancel the investment. Many Nigerians have lost assets and many international people have lost assets through this attitude. I myself have been a victim of it. On many occasions, you bring investors to the country, they are doing well and being applauded, then the next government comes, whether due to non attention, or politics, or malice or mischief, then they throw the people out and then trouble starts. The most important lesson to learn is to take our courts to be fair and respected so that investors and partners can agree to do their litigation in Nigeria, because the tendency is that people just believe that the Nigeria court system is too slow and the system is not going to give you justice and everybody insists on having international arbitration clauses in their agreement. That is making us lose money, reputation and an opportunity to resolve issues domestically.
It appears Nigeria may be fighting this battle in multiple jurisdictions as the Chinese firm is threatening to take the battle to other countries like the UK, how difficult do you think this could pose for Ogun State and Nigeria, legally speaking?
For Ogun State, Nigeria is the father and guarantor. Internationally, nobody knows Ogun State. I don’t think it has any assets internationally that can be exposed. The most that can happen to Ogun State is that the Attorney General of the Federation may insist on deducting the money from the Ogun State FAAC; that is it. But these are pressure tactics, so it doesn’t mean that going to the UK, America and everywhere is going to get you the asset because the laws are very clear. It is very difficult to attach assets of a sovereign nation in the UK, even in US. The judgment they got at the court of appeal is similar to some judgments in the past. Just recognising the fact that Nigeria agreed not to assert immunity when you are enforcing a particular asset do not lose their immune status just because of that. But because they are putting pressure, trying to embarrass Nigeria everywhere, their aim is not necessarily to keep the asset, but to put Nigeria in the negative news all the time. So, if you are raising bonds, you are talking to investors everywhere, and everybody will be asking you about your debt and if you are being rated globally, some of the rating agencies will consider it; these are pressure tactics. Nigeria is a very difficult country to recover assets from. I have been in litigation before where we spent $60 million in litigation just to recover from Nigeria and it took years. So, Nigeria is very tough. I have tried to recover from other countries, and once you make a little effort here and there, they will call you and negotiate with you. Nigeria is a very tough customer internationally. Maybe, the lawyers in the Ministry of Justice will be happy to say people will think twice before they sue Nigeria. But if you want to do business and you are Singapore, or UAE where people carry their businesses to, then, you don’t want to be seen as a guy who is tough, who will argue, litigate and be excessive to the end. I think what the Ogun State Governor should be doing is to see how to make Ogun State good for business not arguing legally. That is for the lawyer to do in Paris because you must continue to assure the investors that all is well. I am a lawyer, I am from Nigeria. I want to be Nigerian president, I am loyal and patriotic to the country but as a professional, if an international business asks me where they should take their business to and I am advising them on Nigeria, I am bound by professional ethics that Nigeria is a very difficult country and that if you get litigation against them, they may not pay you and they will make trouble with you. That’s part of what you need to advise them and you don’t want that to be part of your profile. I am not saying you should not defend the country but you should make sure that you don’t lose your reputation. But overall, there is no need to panic. This is what happens regularly. What the judgment creditor is trying to do is to put you under pressure in many countries. They may not recover anything from all those countries but they are crying for attention.They are saying, please pay attention to us. Remember China is a very strong country and you don’t want to offend a country that is your partner on many fronts.