Nigeria: In Fresh Application, Govs Beg Court to Halt Deduction of $418m Paris Club Debt

27 April 2022

The 36 governors of the federation, in a fresh application, have approached a Federal High Court in Abuja to restrain the federal government from approving the deduction of any money accruing to the states from the Federation Account for the payment of the $418 million judgment debt.

In a fresh application marked: FHC/ABJ/CS/1313/2021, and filed on March 28, the applicants asked the court to specifically restrain the respondents from proceeding with the judgment of a Federal High Court delivered on March 25, dismissing a suit filed by Attorneys General of the 36 states challenging the directive by President Muhammadu Buhari that funds due to the states be deducted from the federation's account to defray debts owed contractors in respect of the Paris Club refund.

In the motion filed by their lawyer, Sunday Ameh, SAN, the governors asked the court to halt the federal government from giving effect to the judgment of Justice Ekwo till their appeal at the Abuja Division of the Court of Appeal was determined.

Among the 43 respondents listed in the suit were President Buhari, Attorney-General of the Federation (AGF), Accountant-General of the Federation, Ministry of Finance, and Central Bank of Nigeria (CBN).

Others were Debt Management Office (DMO), Federation Account Allocation Committee (FAAC), Incorporated Trustees of Association of Local Government of Nigeria (ALGON), Dr Chris Asoluka, Linas International Limited, among others.

According to the motion, 43 defendants were sued in the matter.

Ekwo had on March 25, dismissed the suit filed by the 36 States AGs for lacking merit, adding that the plaintiffs did not have the legal right to institute the matter without their governors' consent.

In a 17 paragraph affidavit deposed to in support of the motion, the governors claimed, "That there is an urgent need to preserve the res and protect the said monies sought to be deducted from the funds due to the states from the federation account from being dissipated and paid over to the supposed judgment creditors, pending the hearing and determination of the suit".

According to the applicants, it would be difficult to recover the said funds from the supposed judgment debtors, in the event that the substantive suit was meritorious and successful.

They further claimed that, "The balance of convenience is in favour of the applicants, who will suffer greater harm and lose money belonging to their respective States if this application is not granted as they will be unable to recover the funds dissipated and paid over to the supposed judgment creditors who are impecunious and will be unable to refund the monies in the likely event that the substantive suit succeeds."

They submitted that if the respondents were not restrained and the said sum deducted, they would not be able to pay Staff Salaries, thereby causing millions of families across the country to suffer untold hardship, which would in turn bring about a surge in criminality and breakdown of law and order.

The applicants also claimed that the damages they were likely to suffer if the monies were paid the judgment creditors and the appeal turned in their favour, were so much that they would not be adequately compensated.

Among the grounds the application was predicated upon were that the lower court's decision had been challenged at the Court of Appeal and 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)."

The appeal, they said, was pending before the Court of Appeal, Abuja Division, raised arguable, substantial and recondite grounds of appeal with great chance of success.

The applicants maintained that the court had vires to grant the instant application to preserve the res and subject matter of the pending appeal.

They, therefore, prayed the court for an order of interim injunction, restraining the federal government from deducting monies accruing to the 36 states from the federation account to pay the judgment creditors pending the determination of their appeal at the Court of Appeal, Abuja.

Assigned to Justice Ekwo, the case comes up today.

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