Chinese Investors Go to Court -By Demi Ademiluyi

Zhongfu International (Nig.) FZE (Zhongfu), a company controlled by Chinese private investors, has sued the Ogun State Government (OSG) and others in the Ogun State High Court to recover control of 224 hectares of land at the Ogun Guangdong Free Trade Zone (OGFTZ).  The new action is brought to enforce an agreement made between Zhongfu and the OGFTZ company in 2010 to give Zhongfu the land to develop as an industrial park within the zone. Zhongfu is also claiming USD1,000,797,000billion in damages (in addition to the accruals of USD252,000 on a monthly basis) against the OSG for the procurement by the OSG of a breach of the 2010 agreement.

This is yet another recent development in the Chinese-controlled company’s efforts to resist the OSG’s attempts to oust it by force from the zone.  The company had in August this year sued NEPZA to stop NEPZA from recognizing any other company as the official manager of the entire 10,000 hectares zone.  In addition to already being a lessee of the 224-hectare industrial park in the zone since 2010, Zhongfu had in 2013 also been appointed the manager of the entire 10,000 hectares of the zone.

The new action suggests that Zhongfu is determined to fight doggedly in this dispute.  The OSG has not yet filed any papers in response to the new action.  There are indications that Zhongfu is going to file a number of further court cases in the dispute in the course of the next several days.  There are reports that the OSG’s attempts to oust Zhongfu have been discouraging new investors from setting up business in the zone.

Zhongfu International Investment (Nig.) FZE (“Zhongfu”) is a company controlled by Chinese private investors and entitled to operate in the Ogun-Guangdong Free Trade Zone (the “Zone”) as both a Free Zone Enterprise and the Zone manager. Zhongfu has sued Nigeria Export Processing Zones Authority (“NEPZA”), Ogun State Government (“OSG”) and Zenith Global Merchant Limited (“ZGM”) in the Federal High Court, Abuja in Suit No. FHC/ABJ/CS/601/2016. The suit is to enforce Zhongfu’s rights to operate in and manage the Zone. The suit seeks to restrain (i) ZGM from acting as the Zone manager and (ii) NEPZA from recognizing anyone other than Zhongfu as the rightful Zone manager.

NEPZA, OSG, and ZGM have been working together to try to terminate Zhongfu’s appointment as the Zone manager. NEZPA in connivance with OSG has been harassing and intimidating Zhongfu’s Chinese employees. Zhongfu has also sued Wang Junxiong, a Chinese businessman, who has been using the Nigeria Police to arrest and harass Zhongfu’s Chinese staff to avoid paying his debts to Zhongfu. Mr. Wang is believed to be working with OSG, ZGM and NEPZA.