A Federal High Court in Abuja has restrained President Muhammadu Buhari, the Attorney General of the Federation (AGF) and five others from proceeding with their planned deduction of about $418 million from the accounts of the 36 States in settlement of alleged debt from the Paris Club Refund and judgements got by some individuals and firms against the Association of Local Government of Nigeria (ALGON).
The other five are the Accountant General of the Federation, Ministry of Finance, the Central Bank of Nigeria (CBN), Debt Management Office (DMO) and Federation Account Allocation Committee (FAAC) -who are all listed as the first to seventh defendants – in a suit, marked: FHC/ABJ/CS/ 1313/2021 filed by the 36 states, through their Attorneys-General.
Justice Inyang Ekwo issued the order on Friday after listening to Jibrin Okutepa (SAN) and Ahmed Raji (SAN) who argued the states’ ex-parte application.
While moving the ex-parte motion, Otukepa, argued that the 36 states would be crippled if the Federal Government, acting trough through the first to seventh defendant, goes ahead to deduct the huge amount from the bank accounts of the States.
He said the Federal Government claimed that the planned monthly deduction, scheduled to commence at the end of November was to settle debts for contracts allegedly executed for the States.
Otukepa however said that the 36 States’ Attorneys-General have read the purported judgment displayed the Federal Government and found that the states were not parties to the court cases which led to the judgment debt.
He added that the purported contract claimed to have been executed for the states were not known to any of the 36 state governments and is therefore a phoney contract.
Okutepa noted that the Federal Government was the only party to the court case that resulted in the judgment and therefore such judgment is not binding on the state government.
In a brief ruling, Justice Ekwo granted three of the four reliefs contained in the ex-parte motion, with the one that sought a refund, which Okutepa agreed to withdraw on the grounds that no deduction had been made.
The reliefs granted by the court are:
*An order of interim injunction restraining the Federal Government of Nigeria, acting through all or any of the first to seventh defendants or any of its agencies or any other persons whomsoever, from approving the deduction or deducting any money accruing or due to all or any of the 36 states of the Federation (hereinafter referred to as the plaintiffs/applicants/states/states of the federation) from the Federation Account for the payment of any judgment debt in the sum of 418million dollars in relation to the Paris Club Refund or any other matter ancillary thereto without the express consent of the states of the federation and the appropriation of the said monies by the Houses of Assembly of the various states of the federation pending the hearing and determination at the motion notice for interlocutory injunction.
*An order of interim injunction restraining the Federal Government or any of Its agencies or any other person whomsoever, acting on their behalf from deducting or further deducting any money from any amount due to all or any of the states of the Federation from the Federation Account for the payment of any judgment debts amounting to the sum of 418m dollars purportedly arising from contracts and suits in relation to the Paris Club Refund or any other matter ancillary thereto contrary to the Appropriation Laws of the various states of the federation pending the hearing and determination of the motion on notice for interlocutory injunction.
*An order of interim injunction restraining any or all of the 21st to 43rd defendants (listed financial institutions in the country) from accepting, giving value, discounting and/or honouring in any form or manner whatsoever, any promissory notes issued by and/or with the approval of all or any of the first to seventh defendants to the ninth to 19th defendants their attorneys, assigns, agents, creditors or any other person deriving any form of interest from all of any of them in relation to any promissory notes issued in relation to the purported judgement debt amounting to the sum of 418m dollars purportedly arising from contracts and suits in relation to the Paris Club Refund or any matter ancillary thereto, against the accounts and interests of the plaintiffs without the express consent of the states and appropriation of the said monies by the Houses of Assembly of the various states pending the hearing and determination of the motion on notice for interlocutory injunction.
Justice Ekwo then adjourned further hearing till November 30.
The plaintiffs stated in a document filed with the motion, that they “are in receipt of the Federation Accounts Allocation Committee (FAAC) deduction summary for the month of September 2021 which shows deductions to be made from monies accruable to the states of the Federation from the Federation Accounts.
“The funds accruable to the Consolidated Funds of the States from the Federation Account can only be utilised pursuant to the Appropriation Laws of each of the states of the federation.
“Part of the deductions in the FAAC summary is for the liquidation of judgment debts in favour of persons, who neither had any contractual relationship with the plaintiffs/applicants nor obtained any judgment against any of the plaintiffs/applicants.
“The plaintiffs, not being parties to the purported contracts giving rise to the suits which culminated in the judgments that pronounced the judgment debts sought to be liquidated, and having not been joined as parties to the said suits, their funds cannot be utilised for the liquidation of the judgment debt.
“Persons other than the government of the states lack the constitutional and statutory powers to enter into contracts that can or will bind the government of the states without the approval of the state governments and appropriation for same by the Houses of Assembly of the states.
“The Federal Government of Nigeria acting through the first to seventh defendants do not have the powers to appropriate any funds accruable to the states of the federation from the Federation Account for any purpose whatsoever contrary to the Appropriation Law of the various states,
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“The purported judgment debt sought to be liquidated with the purported deduction from funds accruing to the states from the Federation Account was not provided for in the Appropriation Laws of the various plaintiffs/applicants.
“The Federal Government of Nigeria acting through the first to seventh defendants has concluded plans to effect deductions from monies accruing to the states from the Federation Account for the liquidation of the purported judgment debts, which the states know nothing about, without their consent.
“The states are in dire need of the funds sought to be deducted by the Federal Government acting through the first to seventh defendants from the monies accruing to them from the Federation Account for the execution of developmental projects already provided for in the Appropriation Laws of the various states.”
