The rising assault on sovereign immunity and implications for developing countries (Part 2)

By Ambassador Godknows Igali

Whose assets have been seized?

Over the years, the assets of several countries, especially from the developing world, have been seized, arising from judicial pronouncements by national courts abroad. Most noticeable, based on its own federal law, D’-Amator Kennedy Act and Helms-Burlon Act, both enacted in 1996, several assets belonging to Cuba amounting to billions of dollars were seized in the US.

As aptly averred by Ilias Bantekas in “The Seizure of Sovereign Assets” (2017), shortly afterwards, Argentina’s $1.3 billion assets were seized in 2012 by the US due to debt issues. In the same year, assets belonging to Egypt amounting to $100 million were seized in the UK due to disputes on natural gas followed by Iraq’s assets amounting to $1.7 billion also seized by the US after the fall of Saddam Hussein in 2003.

What has been most disturbing in this diminishing application of sovereign immunity is the fact that poorer countries, especially in Africa, have become the victims of its denial in national courts of law in the US and in Europe.

The facts from research also show that in 2011, a presidential jet belonging to Equatorial Guinea was seized in France as part of investigations into corruption and money laundering. A similar fate befell a Libyan presidential jet during the period of that country’s civil war also in 2011. In 2014, the jet belonging to the President of Guinea Bissau was seized in Brazil because of disagreements over a debt of $25 million. Sadly, this jet was even auctioned when the latter could not afford to pay and offset the debt.

In that same year, a Congolese presidential aircraft was seized in South Africa over unpaid debt of $30 million. During that same period, a Zambian presidential plane was seized in South Africa in a legal dispute over a subsisting loan of $40 million. In 2019, such seizure was followed by an incidence involving a Gambian presidential jet seized in the US as part of asset recovery linked to former President Yahya Jammeh’s corruption case. In a similar way, a presidential jet belonging to Central African Republic was seized in France as a result of international sanctions on that country.

In a more recent case, Belgians likewise seized state assets belonging to Congo due to debt enforcement also. Canada seized Iranian assets in 2020 due to sanctions for human rights abuses. In the same year, the Swiss also seized properties belonging to Angola due to what they described as corruption. In addition to these, there was the case of the seizure of Pakistani assets in the UK, which came as a result of a dispute with a British company in 2019.

According to available data, more astounding physical assets of states and finances that are ordinarily immune have also been seized in recent times. Some of the most famous ones include $1.7 billion of Iranian assets seized due to terrorism and related sanctions. In 2018, the US seized some South African assets due to corruption; Venezuelan oil assets seized in 2020. Sudanese state assets amounting to $150 million as well as those belonging to Yemen in various sums and Syria’s, amounting to €100 million, were seized in various EU countries due to human rights abuses or terrorism.

The only exception to the plight of weaker countries was in 2022 when the EU froze €260 billion of Russian foreign reserves and about a similar amount in the US due to the war in Ukraine In Europe and Australia, some other physical Russian assets were seized. In another exception, the US had also seized Chinese state assets previously.

Nigeria’s Own Take of Woes.

As often reported in the local and international media, the sad story of seizure or detention of Nigerian government assets, particularly aircrafts, have not been new in the country’s relations with foreign companies and their courts.

For flying objects, as far back as 2007, a Dassault Falcon 900 presidential jet belonging to the Nigerian government was seized at Le Bourget Airport, Paris in France, over debt issue. About the same time, in the UK, a presidential jet (Boeing 737-800) was seized at London Heathrow airport over a £12.5 million debt to a British company, Avcon Jet Ltd. Since then, it has been a catalogue of woes, with all manner of government aircrafts seized or remanded in the United Kingdom, France, Switzerland, Germany, Canada, Dubai, and South Africa.

Relatedly, in 2017, a UK court allowed the seizure of a Nigerian property in Hampstead due to a £5 million debt to a UK based construction company. The following year, 2018, another UK court issued an order for the seizure of a property owned by the Government of Nigerian in Kensington, London due to an unpaid £10 million debt owed to a UK based Energy Company.

In the catalogue of woes, in 2018, a Nigerian government property in Houston was allowed by a US court to be seized due to a debt of $3 million to a US energy company. The following year, that is in 2019, another US court allowed the seizure of a Nigerian government property in Los Angeles as a result of an unpaid $1.1 million to a US based construction company.

On the heels of the Los Angeles seizure, another US court ordered the seizure of a Nigerian government property in New York due to an accrued $1.4 million debt to an energy company in 2020. This was the result of a failed scandalous contract between the government of one of the states in Nigeria, Ogun State, and a Chinese company, Zhongshang Fucheng Industrial Investment Limited.

Things took a turn for the worse in 2021 as the process of seizure of various Nigerian physical assets and aircrafts commenced simultaneously in the US, UK, France and Switzerland at the behest of same Zhongshang Fucheng Industrial Investment Limited.

The Chinese company had won in the US court to take over three aircrafts and other Nigerian assets. As particularly reported by Bloomberg, Reuters, and Nigeria’s own The Guardian newspapers, this process was completed in 2024, leading to the seizure of aircrafts, Dassault Falcon 7X, Boeing 737, and Airbus A330.

As widely reported in the media, in 2023, the UK Court of Appeal upheld arbitration awards, moral damages, along with legal fees, in favour of the notorious Zhongshang, Chinese company to take over two properties in Liverpool owned by the Nigerian Consular Office.

Still on the issue of the $70 million debt owed to the Chinese company, a US Court of Appeal in a final stage ordered the Chinese firm to take over two properties belonging to the Nigerian government in the US. This verdict was delivered on Friday, 19 August 2024, in what was a majority judgement, 2-1. Clearly, the multiplicitous and parallel litigations by the Zhongshang Chinese company against Nigerian interests in the UK, US, Canada, France, Switzerland, etc, is intended at creating maximum damage and effect.

Ambassador Igali (PhD) is a career diplomat and award-winning writer.