A Review of the Nigerian Energy Industry

NELML sues CBN, Bayelsa, others over N2bn debt

CBN logo23 July 2014, Abuja – Nigeria Electricity Liability Management Limited (NELML) has sued the Central Bank of Nigeria (CBN), Bayelsa State Government, the state’s Attorney General, and the Federal Ministry of Finance over N1.9 billion, which Bayelsa State Government was alleged to have owed the defunct Power Holding Company of Nigeria (PHCN).

NELML, in the suit marked: FHC/ABJ/CS/241/2014 and filed before the Federal High Court, Abuja, said the debt of N1,916,053,016.71 was owed to the Port Harcourt Electricity Distribution Company (PHEDC), an arm of the PHCN, prior to its sale.

The agency, which claimed its move against the Bayelsa Government was within its mandate under the Electric Power Sector Reform Act (2005) to take over the liabilities of PHCN, following the unbundling of PHCN under the power sector privatisation process and the Roadmap of Power Sector Reform launched by President Goodluck Jonathan in Lagos in August 2010, said the court was informed about the Bayelsa Government’s unwillingness to settle the debt despite earlier concessions granted it.

NELML, in its statement of claim, pointed out that PHEDC had upon an “extensive reconciliation of the accounts of all its customers,” found out that Bayelsa Government owed about N2.292 billion for the period of December 1, 2007 to March 31, 2012 for the electricity supplied it for the running of its activities.

It added that on the completion of the reconciliation exercise between parties, it was agreed that the debt be put at N1.916,053.016.17, following which the state’s  Attorney General wrote a letter dated September 6, 2012, seeking a discount of N1billion, a proposal the PHEDC refused, but agreed to 20 per cent discount.

The agency also stated that the state’s Attorney General again wrote on September 25, 2013, proposing to be allowed to pay N1billion in full liquidation of the agreed debt, which PHEDC also refused, but agreed to accept a reduced amount of N1.2 billion.

NELML noted that although Bayelsa later accepted and sought to be allowed to pay the N1.2 billion in three instalments, it failed, necessitating several other meetings.

It stated that “at one of such meetings held on February 21, 2013 between the 1st defendant and PHEDC, at the Ministry of Finance, Bayelsa State, it was agreed that the payment be made in four equal monthly instalments, commencing from April 2013 and concluding July 2013.

The plaintiff said: “This was confirmed by letter dated April 4, 2013 and written by the Commissioner of Finance Bayelsa State. In spite of the assurances and promises made by the 2nd defendant (the Attorney General) till date, no payment has been received from the 1st defendant (Bayelsa State Government) in settlement of the debt as agreed and negotiated by parties.”

NELML pointed out that since the concessions given to the state was upon its promise to pay in full by July 2013 and having failed to pay as at July 2013, the state is no longer entitled to the discount earlier granted it, therefore leaving its actual indebtedness now at N1.916billion.

It made a declaration that the 1st and 2nd defendants were jointly and severally indebted to the plaintiff in the sum of N1.916,053,016.71 being the unpaid bills for electricity supplied to the 1st defendant from December 1, 2007 to March 31, 2011.

It further claimed: “The sum of N1.916,053,016.71 jointly and severally from the 1st and 2nd defendants being the unpaid bills for electricity supplied within the same period. Compound interest at the commercial bank lending rate of 22 per cent per annum until fully liquidated.

“An order directing the 4th defendant (the FMF) to immediately set aside and transfer to a fixed account in the 3rd defendant the amount owed or the judgment sum.

“An order directing the 3rd defendant (the CBN) to, upon judgment, immediately release the judgment sum and interest from money standing to the credit of the 1st defendant until total liquidation of the judgment sum together with accrued interest,” it added.

Both Bayelsa and its Attorney General had not responded to the suit, but the CBN and Federal Ministry of Finance had filed separate objections to the suit, challenging the court’s jurisdiction, their inclusion in the case and praying the court to exclude them from the suit.

The CBN argued that the plaintiff had failed to establish any cause of action against it and that by virtue of the provision of Section 251 of the Constitution, the Federal High Court lacked the jurisdiction to entertain the plaintiff’s claims.

The Federal Ministry of Finance, on its part, argued that since it was not a juristic person, the court lacked the jurisdiction to entertain the suit against it.

The case now before Justice Gabriel Kolawole has been adjourned to October 21.



– Daily Newswatch

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