Nigeria: State Govts Urge Court to Suspend $418m Paris Club Debt Deductions

This came after the same court dismissed a suit filed by the state governments to obtain an order to stop the federal government from making deductions to the settlement of the $418million Paris Club judgement debts.

The 36 state governments have urged the Federal High Court in Abuja to restrain the federal government from going ahead with the deduction of funds from the Federation Account for the settlement of the $418 million Paris Club judgement debt.

This came after the same court dismissed the state government’s suit seeking an order to stop the said deductions last month.

Delivering judgment on the suit on March 25, the trial judge, Inyang Ekwo, had held that the states’ Attorneys-General, who jointly filed the suit on behalf of their respective states, lacked the legal standing to institute the lawsuit without their governors’ consent.

The News Agency of Nigeria (NAN), however, reports on Tuesday that the Attorneys-General of the 36 states, on March 28, applied to the judge to stay execution of the judgement.

They prayed the court, in their application, to restrain the respondents from proceeding with the execution of the judgement delivered on March 25 pending the hearing and determination of their appeal by the Court of Appeal.

The application was brought pursuant to Order 32 Rule 1 and Order 56 Rule 8 of the Federal High Court Civil Procedure Rules 2019; Sections 120 and 162 of the 1999 Constitution (as amended) and under the inherent jurisdiction of the court.

The applicants, who listed 26 grounds why the court should grant their prayers, said the lower court’s decision had been challenged at the Court of Appeal.

Part of the grounds is that “the applicants have the constitutional right to appeal the said decision, pursuant to Sections 36, 240 and 242 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).”

According to them, the appeal, which they said, is pending before the Court of Appeal, Abuja Division, “raises arguable, substantial and recondite grounds of appeal with great chance of success.”

The court, they added, “has vires to grant the instant application to preserve the res and subject matter of the pending appeal.”

Mr Ekwo fixed Wednesday for the hearing of the motion.

Background

The 36 states’ Attorneys-General had sued the Attorney-General of the Federation (AGF), the Accountant General of the Federation and the Ministry of Finance, and others, over the planned deduction.

Other defendants sued by the plaintiffs are the Central Bank of Nigeria (CBN), Debt Management Office (DMO), Federation Account Allocation Committee (FAAC), Incorporated Trustees of Association of Local Government of Nigeria (ALGON), among others.

There are a total of 43 defendants, including the judgement creditors, sued in the suit that was filed by the 36 state Attorneys-General on October 27, 2021.

Mr Ekwo had last November restrained the federal government from making any deduction from the federation account to settle the controversial judgment debts until his court’s resolution of the issues.

But delivering judgement on the suit, on March 25, the judge, Mr Ekwo, held that the state Attorneys-General lacked the legal standing to institute the lawsuit without their governors’ consent.

“The states Attorneys-General cannot on their own bring this suit given the provisions of Section 211 of the 199 Constitution.

“This is beyond the powers of the state Attorneys-General to initiate this suit on their own.

“No cause of action can flow when a plaintiff lacks the legal standing to institute a suit.

“This suit does not fall within the class of suits that can be initiated by the State Attorneys-General without the consent of the governors,” the judge held.

Mr Ekwo further held that the court lacked the power to review its own earlier judgement ordering the payment of the creditors.

“I find no merit in this suit and it is, accordingly, dismissed,” Mr Ekwo said.

The debts had accrued from court judgments awarding the creditors, who claimed to be “consultants” and “contractors” to the states and local governments, various sums of money which currently stand at $418 million.

Some of the creditors claimed to have earned their shares of the money through ‘consultancy services’ of helping state and local governments to recover funds over-deducted by the federal government from their allocations between 1995 and 2002 to service the London Club and Paris Club loans.