The Federal High Court sitting in Abuja has refused to vacate its order restraining the federal government from deducting monies accruing to the 36 states from the federation account to settle a $418 million judgment debt in relation to the Paris Club refund.
Counsel to the 36 States, Jibrin Okutekpa, a Senior Advocate of Nigeria, had 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 states of the federation.
But the presiding judge, Justice Iyang Ekwo, declined to grant the order.
The judge said he preferred to hear all pending applications, including the one by the defendants challenging the order, on the next hearing date.
Justice Ekwo, therefore, adjourned the matter till December 13.
Attorneys-General of the 36 States of the federation had approached the court over the refund of the $418m Paris Club debts.
Joined in the suit are the Attorney-General of the Federation (AGF), Accountant-General of the Federation and Ministry of Finance.
Others are the Central Bank of Nigeria, Debt Management Office, Federation Account Allocation Committee, Incorporated Trustees of Association of Local Government of Nigeria (ALGON), among others.
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According to the motion dated and filed October 27, 43 defendants are sued in the matter.
Background of the suit
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 an agreement to be paid from the proceeds of the Paris Club refund.
State governors, under the aegis of the Nigerian Governors’ Forum (NGF), have disputed the creditors’ claims and called for a forensic audit before payment can be made.
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.