25 October 2011, Sweetcrude, Abuja— Governors of Nigeria’s 36 states yesterday initiated fresh legal war against the Nigerian Federal government over the proposed creation of a Sovereign Wealth Fund.
The governors applied to the Supreme 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 they initiated in 2008.
Besides, the plaintiffs/applicants are also praying the apex 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.
The governors have briefed a Senior Advocate of Nigeria, Chief Adegboyega Awomolo, to commence the fresh legal action on their behalf.
Awomolo, SAN, who filed the application yesterday, said his clients were forced to approach the apex court for redress considering that the Federal Government and its officers, had, consistently and in total disregard for the pending suit, withdrawn, utilized, disbursed and allocated funds from the Account.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 ire of his clients (governors) when it announced its intention to withdraw, disburse and utilize another $1 billion from the credit balance from the account, an action he said would further amount to a sheer disregard of the subsisting suit and disrespect for the authority of the apex court.
According to the 36 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 Chibuike 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 States of America (USD) Dollars by the Federal Government, her Minister of Finance and other officers, would create a 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.
It will 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 other things, sought 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 in this suit then 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 had remained unlisted.
In urging the court to grant their application, the governors said they had satisfied all the requirements of law to entitle them to the injunctive relief they sought.
They contended that there was a substantial issue of law bordering on the constitutionality of the Federal Government’s power to create or operate a separate account as against the spirit and letter of the Constitution in so far as it related to the revenue of the nation which is the subject matter of the substantive suit.