Sovereign Wealth Fund: S-Court begins hearing on 36 govs’ suit

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By IKECHUKWU NNOCHIRI
ABUJA — Five months after governors of the 36 states of the federation dragged the Federal Government before the Supreme Court over plans to transfer $1 billion from the “Excess Crude Account” to a new a new account to be known as the “Sovereign Wealth Fund,” the apex court has ordered the two parties to appear before it today, for hearing to commence on the matter.

A seven-man panel of the court, headed by the Chief Justice of Nigeria, CJN, Justice Dahiru Musdapher, has assumed jurisdiction of the legal dispute following an outright collapse of an out-of-court mediation between the warring parties.

Though the case was filed by the 36 states governors last October 23, however, the Federal Government approached the court pleading it to allow the parties to explore amicable resolution of the case through negotiation.

Meanwhile, the plaintiffs had in their consolidated suit, beseeched the apex court for an order restraining the Federal Government from making any withdrawals howsoever from the account styled the “Excess Crude Account” (or any account replacing same by any name howsoever) pending the hearing and determination of a subsisting suit legal action they had initiated in 2008.

They further urged the court to order that all sums standing to the credit of the said “Excess Crude Account”, (or any account replacing same by any name howsoever) be paid into court or be otherwise secured as the court may deem fit pending the hearing and determination of the substantive suit.

The Governors maintained that unless the order of injunction was granted, the Federal Government would continue to disregard, disrespect and ignore the pending suits before the Supreme Court.

Their lead counsel who was a former Attorney General of Lagos State, Chief Adegboyega Awomolo, SAN, had maintained that his clients were forced to approach the apex court for redress in view of the fact that the Federal Government and its officers, had, consistently and in total disregard for the pending suit, withdrawn, utilized, disbursed and allocated funds from the Account.

He alleged that the Federal Government had nearly depleted the sum of N5.51 trillion being the balance on the account as at 2008 when the case was instituted.

The plaintiffs counsel maintained that the Defendant in the suit (Federal Government), drew the irk of his clients (Governors) when it announced its intention to withdraw, disburse and utilize another one billion U.S Dollars from the credit balance from the account, an action he said would further amount to a sheer disregard to the subsisting suit and disrespect for the authority of the apex court.

According to the thirty six state Governors: “The conduct of the Government of the Federation and her officials is a violation of the principle of the Rule of Law and breach of the Independence of the Judiciary and constitutes a violation of the principle of Rule of Law handed down by the Supreme Court in the case of Governor of Lagos V Odumegu Ojukwu (1986) pt 1 NSCC 304 and Rotimi Chibuke Amaechi V INEC (2008) 5 NWLR (PT 1080) 277.”

The governors further criticized the action of the government pertaining to the subject matter of the litigation, describing it as “executive lawlessness and impunity.”

They contended that the proposed disbursement of One Billion United State of America (USD) Billion Dollars by the Federal Government, her Minister of finance and other officers, would create a state of fait accompli and helplessness, if not stopped immediately.

“It is in the Interest of Justice, preservation of integrity of the Supreme Court and the Rule of Law that this application be granted”, they added.

In an-18 paragraph affidavit deposed to by one Mr. Ephraim Ajijola, a lawyer at the Law Office of Awomolo,  which was attached to the application, the governors averred that: “At a press briefing held on 18th October 2011 and reported same day on the “Network News” broadcast by the Nigerian Television Authority, the Government of the Federation, through the Minister of Finance, Dr. Ngozi Okonjo-Iweala, announced its intention to withdraw US$1 billion from the “Excess Crude Account” to start off a national sovereign wealth fund.

“That the said sum of US$1 billion sought to be withdrawn by the Government of the Federation from the “Excess Crude Account” to fund the national sovereign wealth fund forms part of the subject matter of the substantive suit.”

The governors told the Supreme Court that one of the main issues in dispute between the parties in the substantive suit was, whether the payment of revenue which accrued to the Government of the Federation from the proceeds of crude oil sales, petroleum profits tax and oil royalties into any account other than the Federation Account by the Government of the Federation was illegal and unconstitutional notwithstanding that the proceeds from the aforesaid sources were in excess of the Government of the Federation’s estimate of the revenue that would accrue from the said sources.

Besides, it would be recalled that the governors had gone to court to challenge the action, conduct and activities of the Federal Government of Nigeria with respect to the management and operation of the Federation Account.

The governors had among others things, sought for an order compelling the Government of the Federation to pay into the Federation Account the sum of N5.51 trillion being the balance of the sum which accrued to the Government of the Federation during the period 2004 and 2007 from the proceeds of crude oil sales, petroleum profits tax and oil royalties which the Government of the Federation classified as “excess crude proceeds” and “excess PPT and Royalties” and paid into an account which was styled “Excess Crude Account”.

They also 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”.

The parties had equally exploited avenues of out of court settlement for over one year and indeed agreed on a settlement but the settlement so reached could not be implemented and was also not entered as the judgment of the court.

Consequently, the case was set down for trial and parties were directed to exchange briefs.

However, the court did not sit on the days scheduled therefore the case remained unlisted.

 

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