The Managing Partner of Synergy Attorneys and Senior Advocate of Nigeria, Abiodun Owonikoko, has referred to as for laws to manage the involvement of Nigerian states in international direct funding agreements with nations which have a Bilateral Investment Treaty with Nigeria, to forestall “onerous” clauses in these offers.
Owonikoko made the decision throughout an interview with ARISE TV on Tuesday following the seizure of three jets belonging to the Federal Government over the dispute between the Ogun State Government and Zhongfu, a Chinese agency whose contract was revoked.
He additionally referred to as on the Federal Government and the Economic and Financial Crimes Commission to totally examine transactions involving state governments to remove any risk of corruption or fraud.
Owonikoko acknowledged, “The Nigerian method typically lacks the foresight to be taught from previous errors. I had beforehand advocated for an audit of all foreign-related business transactions involving Nigerian sub-nationals, so we will determine potential areas of dispute and renegotiate unfavourable phrases earlier than they change into enforceable judgments.
“And I bear in mind, to be truthful to the Attorney General, one of many committees he arrange upon assumption of workplace was one the place they had been to overview all our BITs, after which provide you with a type of customary settlement… I imagine that a part of what ought to occur in the event that they have already got that customary settlement now’s they need to use that to enter into our BITs and overview as a result of all of the BITs usually have a place for fixed overview.
“You request from the other side that you want to review based on either changes in your own legislation or the economic realities, and then you can negotiate yourself out of the onerous clauses in those agreements.”
He added that there must be laws in place to watch state enterprises’ transactions with international investments.
“There is a necessity now, for extra than simply extraordinary coverage, there must be laws that may regulate the involvement of state enterprises with international investments.
“I’m not speaking about Mobil coming into right into a contract with Oando, I’m speaking a couple of state entity in Nigeria coming into right into a international direct funding association with a international nation with which Nigeria has a BIT, which implies that we’ve an obligation to guard that funding, and we must always give them equal remedy.
Thank you for reading this post, don't forget to subscribe!
“Any international investor in Nigeria that decides to make the most of the BIT will probably be entitled to go after the federal authorities for any funding choice that prejudices its curiosity in Nigeria, as long as it’s coated below the BIT and the BIT Nigeria has with China covers pretty a broad spectrum of companies.
“Most of them – and that’s why I’m fearful by it – the truth that we’ve the proliferation of export processing zones, we’ve virtually thirty-something… Some of them are in Kano, a few of them are in Kogi, a few of them are in Kaduna, and also you marvel what we’re exporting.
“A lot of businesses that are coming into those zones are protected by the BIT, and most likely, in an era where companies are exiting because they are not comfortable with our business environment, those that will remain are those who are protected in those zones, and they are likely to initiate dispute resolution through arbitration so that they can go after federal government for all kinds of liabilities that may arise,” he acknowledged.
He added, “It’s not only state versus state, but even liability arising between them and co-Nigerian investors can also be subject of those proceedings.”
Speaking on the authorized dispute between the Ogun State Government and Zhongfu, he mentioned, “Where a authorities, particularly Nigeria within the 90s, 70s, up till 2000, was working a command economic system, a whole lot of our companies bought entangled with authorities involvement. So, sure belongings of the federal government had been categorised as business belongings, regardless that owned by the federal government.
“The unfortunate thing is that the leading case on this matter actually generated out of a controversy between foreign investors and Nigeria in the 70s during the Armada Cement crisis…”
Owonikoko famous that when the federal government includes itself in business transactions, successfully selecting to have interaction in enterprise, it can not declare immunity from the results of breaching these contracts.
“Now, in a scenario involving the Chinese, individuals have forgotten that Nigeria and China have a Bilateral Investment Treaty, which was signed in 2001 and got here into power in 2010. Under that settlement, international traders from China who latch onto that treaty are entitled to some type of safety for his or her funding and so, if there’s a dispute, there’s the supply that they both go to a Nigerian court docket or resort to arbitration.
“In this specific occasion, the Chinese firm determined to go to arbitration. Usually, it’s the safer wager for international entities in a rustic the place they need to shield their investments.
“So where we are now, the assets reportedly attached in France are Federal Government public presidential jets, used for running government business. But if it was a CBN private jet being used for commercial transactions, it probably would not be as protected as the presidential jet. So I see the issue involving those jets as not really a matter of enforcement of judgement, but a diplomatic issue,” he added.
On whether or not fraud was concerned within the Ogun State settlement with China, as was claimed, which led to the breach of the contract, he acknowledged, “From what we see here, really, it was a kind of political decision that led to this trouble. So, I’ve not yet seen evidence of corruption or fraud in what has happened, it’s purely politics, and you don’t try people for political mistakes. The only thing is if you dig deeper, what looks like ordinary political decisions may actually have some elements of fraud, in which case, when you leave office, immunity will not cover fraud.”