•Experts fear repeat of fate of Zambia, say waiver of immunity, unconstitutional
Yemi Ajayi, Davidson Iriekpen, Martins Ifijeh in Lagos and Chuks Okocha in Abuja
Concerns mounted at the weekend over the
rising trend of government officials signing
loan agreements with a
clause that waives the sovereign immunity of the country if it defaults
in its repayment plan.
Last week, the House of Representatives
summoned the Minister of Transportation, Hon. Rotimi Amaechi; Minister
of Finance, Budget and National Planning, Mrs. Zainab Ahmed; and
Minister of Communications and Digital Economy, Alhaji Isa Pantami; over
a loan agreement with China, which contained the waiver clause.
According to the House, Article 8(1) of
the commercial loan agreement signed between Nigeria and Export-Import
Bank of China concedes Nigeria’s sovereignty to China.
The lawmakers had picked holes in the
$400 million loan agreement for Nigeria National Information and
Communication Technology (ICT) Infrastructure Backbone Phase II Project,
signed in 2018.
The controversial clause in the
agreement, signed by Federal Ministry of Finance (borrower) on behalf of
Nigeria and the Export-Import Bank of China (lender) on September 5,
2018, provides that “the borrower hereby irrevocably waives any immunity
on the grounds of sovereign or otherwise for itself or its property in
connection with any arbitration proceeding pursuant to Article 8(5),
thereof with the enforcement of any arbitral award pursuant thereto,
except for the military assets and diplomatic assets.”
While the ministers are to have their
day with the House on August 17, 2020, to explain their action, some
critics, including former vice president, Alhaji Atiku Abubakar, agreed
with the federal legislators at the weekend that the clause was capable
of mortgaging the sovereignty of Nigeria, saying it exposes Nigeria to
the fate of Zambia, which signed a loan agreement with a similar clause
with China and has now lost some of its national assets to the Asian
country on default of repayment.
THISDAY checks showed that China in 2018
had taken over Zambia National Broadcasting Corporation (ZNBC) over
loan default and had commenced talks with the Zambian government to take
control of Zambia’s national electricity company, ZESCO, and the
Kenneth Kaunda International Airport, Lusaka, owing to the inability of
Zambia to meet its loan repayment promises to the Asian country.
According to data from the China Africa
Research Initiative (CARI) at Johns Hopkins University, Zambia had
accumulated loans from China totalling almost $6.4 billion as at
December 2017.
Senior lawyers, including Mr. Ebunoluwa
Adegboruwa (SAN) have called on the National Assembly to compel
President Muhammadu Buhari to submit to both chambers all agreements
signed with China to enable experts to vet them, saying the contract
might not have been signed with the input of experts.
Many other lawyers that spoke with
THISDAY said the waiver clause might have been accepted by the Nigerian
officials out of ignorance of the concept of the sovereign immunity of
states, which protects sovereign states from the jurisdiction of courts,
particularly in a foreign country without the consent of the state.
They pointed out that it is this concept
that Nigeria is hanging on to in its $9.6bn arbitral award case with
Process and Industrial Development (P&ID) in the United States,
where the nation is challenging the enforcement of the award on the
ground of sovereign immunity.
Besides, some legal experts told THISDAY
that the agreement having not been approved by the National Assembly
would be unconstitutional and illegal, adding that although Amaechi
claimed in a statement on Saturday that the loan was approved by the
federal legislature, the contract might not bound the country if its
details were not approved by the legislature.
“I think Amaechi has missed the point.
The National Assembly might have approved the executive’s borrowing plan
but not the agreement signed on the loan,” a senior lawyer told THISDAY
last night.
Amaechi had warned that the Chinese
authorities might not sign the $5.3 billion Ibadan-Kano rail line loan
if the lawmakers continued to investigate the agreement.
The minister had also explained that the
clause ‘waiving sovereignty’ in the loan agreement between Nigeria and
China was only a contract term, a sovereign guarantee that assures
payback according to the terms and conditions of any loan.
However, a former Minister of External
Affairs, Prof. Bolaji Akinyemi, clarified that Nigeria and other African
countries cannot plead sovereign immunity when they are sued for
defaulting in loan repayment, saying that the special clauses in these
agreements are standard procedures.
But Atiku and the Peoples Democratic
Party (PDP) flayed the agreement and Nigeria’s rising debts yesterday,
warning that both were a threat to the country’s sovereignty.
They called on President Muhammadu
Buhari to rethink the borrowing strategy leaving a heavy debt burden for
successive administrations.
Atiku, in a statement yesterday by his
media office, urged the federal government and the All Progressives
Congress (APC) to apologise to Nigerians and make an admittance of guilt
for taking the country through the throes of subjugation to another
country.
Atiku recalled that he had called the
attention of the country to the reality of reckless borrowing by the
present APC administration and how the terms of those loans could
compromise the future of the country.
He lamented that some managers of the
party and even the government denied the allegations that he raised and
also discounted the warning for caution.
“Regrettably, just last week, a cabinet
minister confirmed our fears. Now, we all are aware that Nigeria’s
sovereignty may have been traded for foreign loans and God forbids our
inability to service those loans, the lender country would take
ownership of choice infrastructure on the Nigerian soil. No negotiation
could be weaker than that!
“Nigeria had a total foreign debt stock
of $7.02 billion on May 29, 2015. Today, our foreign debt is $23 billion
and rapidly rising. Debt, by itself, is not a bad thing. But debt
budgeted for such unproductive ventures, like the proposed $500 million
upgrade of the Nigerian Television Authority and other sundry bogus
contracts is debt that leads to death. To trade Nigeria’s sovereignty
for this type of profligacy is the height of irresponsibility,” Atiku
said.
The PDP said the revelation of the
clause in the agreements entered by the APC administration with their
Chinese lenders had vindicated its stand that the APC had been secretly
mortgaging the sovereignty of Nigeria to benefit its selfish leaders.
The PDP also called on the National
Assembly to review all foreign loan agreements entered into by the APC
administration and take urgent steps to redress the situation.
The PDP, in a statement, signed by its
National Publicity Secretary, Mr. Kola Ologbondiyan, said its
investigation showed that the mortgaging of the nation’s sovereignty to
foreign lenders, including the $500 million loan from China, had been
with the active connivance of the APC.
The PDP rejected the attempts by the Buhari administration to justify its action.
It said: “Nigerians can recall that our
party had on May 28, 2020, alerted that the Buhari administration and
the APC had placed our nation on the international auction market with
an accumulation of foreign loans under nebulous terms.”
Nigeria, Others Can’t Plead Sovereignty if they Default, Says Akinyemi
Former External Affairs Minister,
Akinyemi, however, said that Nigeria and other African countries cannot
plead sovereign immunity if they default on loans from international
organisations or nations.
Akinyemi, during an interview on Daily
Motion recently, said the country could only plead sovereignty during
political relations and not economic relations, which the commercial
loan agreement falls on.
He said: “Africa should look closely
into terms of engagements. African governments should not sign
agreements they cannot operate with. It doesn’t make sense to sign an
agreement where the Chinese promise to give you money in Yuan whereas
you are to pay back in dollars. That is an unequal term of agreement.
“Ask yourself if the project will be in
your favour in the future. What is the point of signing an agreement for
Chinese to build a railway system with the terms paid within 20 years,
when the volume of people travelling by railway in your country cannot
sustain the railway system?
“If the income generated by the railway
system can generate the loan, then go ahead, but if you know you will be
unable to repay the loan, then don’t go into it.
“There is usually a clause in these
agreements, which are standard procedures. It usually says country X
cannot plead its sovereignty if there are disagreements, and you need to
go to arbitration. You cannot say you are a sovereign country and
cannot be dragged to the court of arbitration. That is standard
procedure. Economic relations are different from standard relation.”
He said for political relations, a
country could plead its sovereignty to protect itself, but for economic
relations, it was not possible.
“Always get experts to interpret the terms of your agreement to ensure it will not lead you to economic slavery,” he added.
Akinyemi also stated that there was
nothing wrong in Africa broadening the basis of its interaction with the
economic global community, as this was better than just being dependent
on one source.
“It makes sense for us to have many
economic and trading partners. What a lot of people are worried about is
the content of the engagement our countries have been signing with
China.
“We should separate these two issues from the propaganda we are
getting from the West that we should have nothing to do with China and
that we should be afraid of getting China too deeply involved in African
affairs. They are only trying to protect their own trading relationship
with Africa,” he stated.
Former president of the Nigerian Bar
Association (NBA), Mr. Olisa Agbakoba (SAN), stated that the loan
agreement Nigeria entered into with the Chinese government does not mean
it has signed away its sovereignty to the Asian giant.
In an interview with THISDAY yesterday,
he said China’s agreement with Nigeria means if it defaults in paying
its loans, it would waive its sovereign immunity such that it can be
taken to the arbitration court for defaulting, adding that this was
different from signing away a country’s sovereignty.
He said: “If you take a loan, you must
present a guaranty. So what this China – Nigeria loan stated is that if
Nigeria defaults, it cannot raise sovereign immunity.
“In 1973, Nigeria’s cargo plane was
arrested in the United Kingdom. So the London court said if Nigeria is
involved in a connection transaction, it cannot invoke sovereign
immunity.
“What the Chinese has done is to say,
they are giving us a loan on a connection basis, and that in the event
that we default, we cannot avoid the court by saying we are bringing in
sovereign immunity into it. You know sovereignty would mean the country
is immune from liability.”
He said although loans were necessary
for infrastructural development, it was important that they go through
the relevant processes, adding that Bi-lateral Investment Treaty (BIT)
ought to be vetted by the Ministry of Justice before they should be
signed.
He said: “The vetting is to check if it
is in the best interest of Nigeria. For instance, is there an
arbitration agreement that makes China the place of the hearing and not
Nigeria? As you know, arbitration has become a very big issue, and if
Nigeria loses that arbitration, it is losing about 20 per cent of its
foreign reserve.
“While it is important to keep in mind
that loans are not a bad thing to get into, it is important proper legal
framework is followed. I am not sure proper legal framework has been
followed in this case because it is the Ministry of Justice that advises
the executives on how loans are structured,” he added.
Sovereign immunity, or state immunity,
is a principle of customary international law, by virtue of which one
sovereign state cannot be sued before the courts of another sovereign
state without its consent. Put in another way, a sovereign state is
exempt from the jurisdiction of foreign national courts.
The United Nations Convention on
Jurisdictional Immunities of States and Their Property, which seeks to
lay the global ground rule was adopted by the General Assembly on 2
December 2004 but is yet to come into force.
No comments :
Post a Comment