Aondoakaa: Presidential Jets Not Commercial Assets, Wrong for Chinese Firm to Seize Them

•Prioritise due diligence, legal consultations in contract negotiations, TI, CISLAC tell FG, state governors

Chuks Okocha, Kasim Sumaina in Abuja and Funmi Ogundare in Lagos

Nigeria’s former Minister of Justice and former Attorney General of the Federation, Michael Aondoakaa, has said the Chinese firm, Zhongshan Fucheng Industrial Investment Co. Ltd, was completely wrong to have seized three of Nigeria’s presidential aircraft, arguing that the aircraft were not used for commercial purposes, but purely for running of state operations.

Aondoakaa, also revealed that the Nigerian government was fully involved in the dispute between Ogun State and Zhongfu, the Nigerian subsidiary of Zhongsang, because of the trade treaty that was signed between the Nigerian Government and the Republic of China in 2001, which allowed access for contracting investors into Nigeria.

The former AGF said this in an interview on ARISE NEWS yesterday, where he discussed the legal dispute between the Ogun State government and Zhongfu, a Chinese firm whose contract was revoked under Amosun’s administration, which led to a Paris court ordering the seizure of three jets belonging to the Nigerian government over an arbitration award in favour of the Chinese firm.

He said, “If you look at the issue of attachment of presidential planes, that is where completely, the foreign firms are wrong.”

He went on to explain, “But now, sovereign immunity operates in two ways. What the Appeal Court in US dealt with was the procedure, the procedural aspect.

“I’m afraid when people will say Appeal Court said, or US said they can attach Nigerian properties everywhere. I don’t think that was its extreme position.

“When you register, the country will evaluate it. And two areas the country will look at are: Did the arbitrators who rendered the final arbitral award exceed their jurisdiction, or was the arbitral award contrary to public policy?

“Nigeria is not hinging it on the issue of public policy, that is it, but of course, issuing of the issue of sovereign immunity.

“But now, where I have a major quarrel with the Chinese people is that the sovereign immunity, even though after the New York Conventions have been classified into two- absolute sovereign immunity with properties that belong to the state which the state uses for operation of State, not for commercial bases, are immune. They’re considered sovereign immunity.

“For instance, military hard wares, presidential planes – because presidential planes are not used for commercial purposes. Presidential planes are used basically for state functions, and those ought to ensure absolute sovereign immunity.”

Aondoakaa, then revealed that in 2001, a treaty for the Reciprocal Promotion and Protection of Investments was signed between China and Nigeria, which, “guaranteed all contracting investors, which is broadly defined, into Nigeria, and gave them even a provision for expropriation, which means you cannot take over their asset.”

He then said the treaty signed in 2001, contained a clause that talked about expropriation, which allowed for compensation if the state takes a step that depreciates investments.

He explained, “Ogun State seems to be part of the country, and when you’re dealing with a treaty, it was the federal government that entered into that investment treaty. It was done in 2001, and signed by the Minister of Industry. And I’ve seen the contents of the treaty, very strong contents of the treaty. I was very worried whether the Ministry of Justice, even that of Ogun State or the Ministry of Justice of Nigeria was consulted. The first issue I looked at was Article 4 of it, which talked about expropriation.

“The treaty had three areas, two strong arbitration clauses in paragraphs 8 and 9. The best venue we could have got was one of the paragraphs that gave a right to court, and these people had attempted to go to court in Nigeria. “If we were clever, we would have had a counterclaim, even when they withdrew their action, they wouldn’t have resorted to going back to arbitration.

“But there wasn’t a counterclaim, because you have alleged that they violated some of the terms of the contract, that must have been the basis on which Ogun State terminated.

“And therefore, when they filed an action in the first instance, Ogun State ought to have raised a counter claim, I do not know why they didn’t, because if they had raised a counter claim, even if you withdraw your action, the counter claim being a separate course of action, it would have remained, and that would have been the live wire.” the former minister of Justice stressed.

Meanwhile, CISLAC and TI-Nigeria, yesterday, on the federal and state governors to prioritise due diligence and legal consultations in contract negotiations.

In a statement signed by its Executive Director, Auwal Musa Rafsanjani, CISLAC/TI-Nigeria expressed concern over the escalating legal battle, which stems from a 2007 agreement for the development of the Ogun Free Trade Zone. 

Rafsanjani emphasised that the fallout from the poorly managed contract resulted in significant financial losses and tarnished Nigeria’s international reputation.

 He urged state governors and government officials to fully understand the legal and ethical complexities of international agreements before entering into them.

According to him, Nigeria is already grappling with numerous socio-economic challenges and the last thing it need is to be entangled in costly legal disputes that could have been avoided with proper due diligence.

Rafsanjani criticised the federal government for allowing state governors to access loans without adequately addressing potential risks.

He pointed out that personal interests often lead public officials into problematic agreements, drawing parallels to the notorious P&ID case.