Court Refuses To Reverse Order Stopping Payments Of $418m Paris Club Debts

The Federal High Court, Abuja, on Tuesday, refused to vacate its order restraining the federal government from deducting monies accruing to the 36 states from federation account to settle $418 million judgment debt in relation to Paris Club refund.

Iyang Ekwo, the trial judge, who declined to grant the plea by counsel for the defendants, adjourned the matter till December 13.

The judge said he preferred to hear all pending applications, including the one by the defendants challenging the order, on the next hearing date.

The News Agency of Nigeria (NAN) reports that the judge had, on November 5, made the order after counsel for the 36 state governments (plaintiffs), Jibrin Okutepa, a Senior Advocate of Nigeria, moved an ex-parte motion, seeking an order of interim injunction, restraining the federal government from deducting any money accruing or due to all or any of the 36 states of the federation.

The court had also ruled that the restraining order would subsist pending the determination of the substantive suit.

NAN also reports that while the 36 states Attorneys-General are the plaintiffs, some of the defendants listed in the suit include the Attorney-General of the Federation (AGF), Accountant-General of the Federation and Ministry of Finance.

The rest are Central Bank of Nigeria, Debt Management Office, Federation Account Allocation Committee, Incorporated Trustees of Association of Local Government of Nigeria (ALGON), among others.

According to the motion dated and filed Oct. 27, 43 defendants are sued in the matter.

At the resumed hearing, counsel to the plaintiffs, Mr Okutepa told the court that the matter was slated for hearing.

He said he had two motions which he intended to move.

He told the court that though most of the defendants had responded by serving on them various applications, the 9th defendant (Dr Chris Asoluka, who does business under the name and style of NIPAL Consulting Network) had refused to receive their court processes.

“We have a motion ex-parte to serve the 9 defendant an originating process. The process dated Dec. 6 was filed on Dec 6 and it is praying for an order of substituted service on the 9th defendant,” he said.

The judge then granted prayer one of the motion and ordered that the service be made on the 9th defendant within three days through pasting of the notice on his address.

The senior lawyer told the court that the second motion was an application praying the court for an extension of time to file and serve their counter affidavit and all other processes in response to the defendants’ applications.

Mr Ekwo also granted prayer one of the motion and granted prayer two in part subject to the service of the motion on the two counsel who appeared for 15th, 16th, 10th and 11th defendants.

The two counsel had opposed the motion on the ground that they had not been served with the copy.

Mr Okutepa then asked for a date for hearing.

However, Oyin Koleoso, who appeared for the 1st, 2nd, 4th and 6th defendants (President of Nigeria, AGF, Ministry of Finance Incorporated and Debt Management Office), informed the court that a motion asking the court to vacate the earlier order made had been filed.

Wole Olanipekun, SAN, who appeared for the 14th defendant (Ted Iseghohi-Edwards), also urged the court to set aside the order.

He argued that he made the plea based on the Supreme Court and Appeal Court decisions.

Olusola Oke, also a SAN, who is lawyer to the 12th and 13th defendants (Riok Nigeria Ltd and Prince Nicholas Ukachukwu), also supported Mr Olanipekun’s submission.

Mr Oke, who told the court that his clients were affected by the order, urged the court to take their application seeking the order to be vacated.

Orji Orizu, who appeared for himself in the suit as 18th defendant, also called for the setting aside of the order, arguing that an ex-parte order could only last for 14 days

“That is what we are here for. A motion ex-parte is something done without the presence of the other parties, and it Is the first thing the court ought to do before adjournment,” he added.

Idumodin Ogumu, who represented 15th and 16th defendants ( Panic Alert Security Services Systems Ltd and Dr George Uboh), said he aligned himself with submissions of other counsel.

He argued that based on the rule of the court, the order granted by the court was deemed to have elapsed and no longer had effect.

However, counsel for the plaintiffs, Mr Okutepa, disagreed with the defence submission.

The senior lawyer argued that it was an order of interim injunction restraining the federal government, acting through its agencies also joined in the suit, from deducting the plaintiffs’ monies pending the determination of the motion on notice.

He said the order was also made in compliance with the rule of the court.

“Your Lordship was aware of the rule when you were making the order.

“What I am saying now is that all we are doing now is a nullity because I am yet to serve the 9th defendant.

“This is not an application that your lordship should hurriedly take. Let other defendants be here so that it will not be taken piecemeal,” he said.

After taking all the arguments, Mr Ekwo noted that the restraining order was made subject to the motion on notice filed by the plaintiffs.

The $418 million 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.

Those who claimed to be contractors among the creditors said they executed contracts for state and local governments with agreement to be paid from the proceeds of the Paris Club refund.

State governors, under aegis of the Nigerian Governors’ Forum (NGF), have disputed the creditors’ claims and called for a forensic audit before payment should be done.

Recall how how President Muhammadu Buhari had ignored the governors’ protests to approve the issuance of promissory notes to the creditors.

The promissory notes asked to be issued by the Debt Management Office (DMO) are to be funded through deductions from the allocations of the states and local governments for a period of 10 years