25 March 2014

Nigeria: SWF- FG, States' Out-of-Court Settlement Collapses

The federal government yesterday informed the Supreme Court that the out-of-court settlement with the 36 states of the federation over dispute arising from the maintenance of the Excess Crude Account and the transfer of $1 billion from the account to the Sovereign Wealth Fund (SWF) has collapsed.

After the apex court was told that talks between the parties involved in the matter had broken down, the presiding justice of Supreme Court (JSC) Walter Onnonghen set the case down for definite hearing on September 23, 2014.

The 36 states of the federation had sued the federal government over the property of the Sovereign Wealth Fund.

They want the court to determine whether the states have share in the SWF.

The apex court last year granted a request by the parties to settle the matter out of court and to explore an amicable resolution of the disagreement.

During yesterday's proceedings, lawyer to the FG Austin Alegeh (SAN), told the court that settlement between parties had collapsed and, in view of that, he brought an application praying the court to amend his statement of defence.

Lawyer to the 36 state governors Mallam Yusuf Ali (SAN) did not oppose the application.

Ali, however, noted that the information which the defendant is asking for had been included in the papers they (plaintiffs) filed before the court.

In his ruling, Justice Onnoghen, who led six JSCs, granted Alegeh's application.

He ordered the plaintiffs to supply further particulars required to the defendant within seven days and that the defendant should within 21 days file his amended statement of defence.

The plaintiffs in the suit are seeking an order of court compelling the government of the federation to pay into the Federation Account N5.51 trillion being the balance of the money that accrued to the central purse between 2004 and 2007 from the proceeds of crude oil sales, petroleum profits tax and oil royalties.

The government of the federation had classified such earnings as "excess crude proceeds" and "excess PPT and royalties" which were paid into an account termed the "Excess Crude Account".

The governors further asked the court to order the federal government to transfer to the Federation Account all sums standing to the credit of the Excess Crude Account.

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