Nigerians have been complaining, under the Buhari-led administration, that the Federal Government has been doing a lot of borrowing.
On Tuesday, the House of Representatives had resolved to review loan facilities already taken by Nigeria from China and other countries, and in the process, they found a clause described as “lethal”.
In a report by ThisDay, in the $400 million loan for the Nigeria National Information and Communication Technology (ICT) Infrastructure Backbone Phase II Project, signed in 2018 between Nigeria and the Export-Import Bank of China, Nigeria allegedly ‘conceded sovereignty of Nigeria to China’.
The clause apparently reads:
The borrower (Nigeria) 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.
But what does this really mean?
First of all ‘Sovereignty’ is the power of a state to do everything necessary to govern itself, such as making, executing, and applying laws; imposing and collecting taxes; making war and peace, and forming treaties or engaging in commerce with foreign nations. It is the full right and power of a country over itself, without any interference from outside countries.
On the other hand, according to an explainer by Twitter user @ayodeleoni the sovereign immunity is a legal doctrine giving immunity to a sovereign state (e.g. Nigeria) from any order, injunctive relief or other execution of any judgment or award against its assets even if made as a consequence of the breach of a binding contract.
What Nigeria has done in that clause is that if they were to breach the loan agreement and the lender won the case in an arbitration, the lender will be able to enforce whatever arbitral award they win against any property of Nigeria except military or diplomatic assets
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