Onyedi Gabriel, Port Harcourt
A Chieftain of the All Progressives Congress in Rivers State, Chief Eze Chukwuemeka Eze, has blamed the ongoing controversies surrounding a clause in a loan agreement between Nigeria and China on misconception by the House of Representatives Committee.
Eze in a statement in Port Harcourt, Rivers State, on Monday, said the Chairman of the House Committee on Treaties, Osai Osai, probing the loan agreement, gave the clause a phony slant that sparked needless reactions from different quarters.
He said the Article 8(1), which the committee harped on never in any way suggested the leasing of Nigeria or her sovereignty to China, contrary to the position of the lawmakers.
Explaining further, he said, “Sovereign immunity is a legal doctrine by which the government of a foreign country is immune from suit in the courts outside its jurisdiction.
“In common law jurisdiction, an independent sovereign state may not be sued in the courts against its will and without its consent. This doctrine of state or sovereign immunity evolved from rules of international law and same has been internalised and made part of the common law of England, which forms part of Nigeria’s body of laws.
“Flowing from the above and borrowing inference from the provisions of the very comprehensive and standard Foreign Sovereign Immunities Act (FSIA), a piece of legislation of the United States, a sovereign debtor, defending against a collection action may seek refuge in the FSIA. The Act was enacted to codify restrictive theory of sovereign immunity of states.
“Although the FSIA serves as a jurisdictional bar to certain suits involving the official conducts of a foreign country, the Act provides several exceptions to that immunity. One of such is in the context of sovereign loan defaults; the sovereign may relinquish its immunity by express or implied waiver. Most sovereign bonds and loan agreements contain express waivers of sovereign immunity.
“In addition and importantly too, the Act provides that a foreign state is not immune from jurisdiction in suits arising from acts that the Sovereign performs in connection with certain commercial activities. This is the chief reason a waiver of sovereign immunity clause, like Article 8(1) quoted above, is usually inserted in a foreign loan agreement, such that Nigeria has entered into with China”.
Eze clarified that the controversial clause only allowed the lender to institute arbitration proceedings and enforce the arbitral award against a sovereign debtor and its assets in another jurisdiction or country if the Sovereign failed to pay back the loan and not to take over the sovereignty and the running of the economy of the sovereign debtor as being peddled around.
He said that bilateral relations would be chaotic, if not impossible if the law had allowed a sovereign promissor to lean on the cloak of sovereign immunity to break contractual terms without at least placing it under obligation, by way of specific performance, to pay compensation for damages caused by the default.
Dismissing the insinuation that Nigeria may have been mortgaged to China, the party chief advised propagators of the falsehood to seek proper clausal interpretation from experts and desist from dragging the country’s image in the mud.
Eze said the loan agreement was signed on December 20, 2010, under former President Goodluck Jonathan and that the current administration only activated the agreement.
He said the Jonathan’s administration which bargained and signed the agreement and the current administration that only activated and implemented the terms would not have acted if the terms were in breach of the Nigerian laws.
On the complaints that the country had been enmeshed in excessive debt, Eze explained that taking loans at low interest rates was more desirable than raising taxes adding that the loans were essential to cover domestic resource gaps and finance projects that would improve the economy, reduce poverty and foster longer-term growth.
Eze stated that biggest economies of the world such as the US, UK, Germany, France, Japan, China, Italy, Canada, Netherlands and others were heavily involved in sovereign debts and rely on foreign loans to finance critical national projects.
He called on the House Committee on Treaties to place national interest beyond self and give necessary support to the Transportation Minister, Chibuike Amaechi, for the speedy completion of more rail infrastructure to create jobs and improve the economy.
He assured that the country was safe under the President Muhammad Buhari-led federal government and appealed to political activists to allow experts discuss and handle the loan matter.
He said the House Committee could obtain other international loan deals to see if they had no single obligation clause upon the sovereign borrower.