President Goodluck Jonathan
Supreme Court resumes hearing Monday
From Tobi Soniyi in Abuja
Failure by the federal government and the 36 states of the federation to reach an out-of-court settlement over the dispute arising from the maintenance of the Excess Crude Account and the transfer of $1 billion from the account to the Sovereign Wealth Fund (SWF), could threaten the fund.
The federal government and the 36 states of the federation will be heading back to court tomorrow following the collapse of talks between both sides on the legality of Excess Crude Account and the SWF.
The two parties, which had previously asked the Supreme Court to stand down the case aimed at resolving the dispute over the retention of the Excess Crude Account and the transfer of $1 billion to the recently created SWF, have now gone back to the apex court for adjudication on the dispute.
With the breakdown in talks, the Supreme Court is scheduled to begin hearing in the case tomorrow.
Already, a panel of seven justices, headed by the Chief Justice of Nigeria, Justice Dahiru Musdapher, has been constituted to hear and determine the case.
The Supreme Court had earlier granted a request by the parties to settle the matter out of court and to explore an amicable resolution of the disagreement.
Governors of the 36 states had gone to court to among others, seek an order compelling the Government of the Federation to pay into the Federation Account N5.51 trillion being the balance of the money that accrued to the central purse between 2004 and 2007 from the proceeds of crude oil sales, petroleum profits tax and oil royalties.
The Government of the Federation had classified such earnings as “excess crude proceeds” and “excess PPT and royalties” which were paid into an account termed the “Excess Crude Account”.
The governors 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.
However, in a counter affidavit filed last week on behalf of the federal government by the law firm of Alegeh and Co., it said efforts to find a common ground did not succeed.
In an affidavit deposed to by a lawyer in the firm, Mr. Uchena Njoku, he said: “I know as a fact that subsequent to the institution of the substantive case, the parties explored the possibility of an amicable settlement of the issues discernible in the case and mutually sought several adjournments of the case to enable them to conclude the settlement option and report same to the court.
“That when it became clear the plaintiffs/applicants were not amenable to the settlement options, discussions in this regard were called off and parties accordingly informed the court.”
The federal government also accused the states of mischief because they took part in the deliberation of the National Economic Council where the decision to transfer the $1 billion from the Excess Crude Account to the SWF was taken.
It added that the states had also been receiving their shares from the money and accused them of insincerity.
In response, the states insisted that they had shared only the legitimate funds deposited in the Federation Account and not from the funds illegally deposited in the Excess Crude Account.
While asking the Supreme Court to refuse the application by the states to stop the federal government from transferring $1 billion from the Excess Crude Account to the SWF, the federal government’s counsel said his client would run into problem if the application was granted.
He said the day-to-day running of the nation’s economy would be put in danger if the application is granted.
The governors, through their lawyer, Chief Adegboyega Awomolo, had applied to the Supreme Court to restrain 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 suit they filed in 2008.
The governors also asked the apex court to order that all sums standing to the credit of the account styled the “Excess Crude Account” (or any account replacing same by any name howsoever) be paid into a dedicated account at the instance of the court or be otherwise secured as the court may deem fit, pending the hearing and determination of the substantive suit.
Awomolo said the governors were forced to file the application because the federal government and its officials had consistently, and in total disregard for the pending suit, withdrawn, utilised, disbursed and allocated funds from the account and had nearly depleted N5.51 trillion being the balance on the account as at 2008 when the case was instituted.
He further stated that the federal government had announced its intention to withdraw, disburse and utilise another $1 billion from the credit balance from the account in disregard to the subsisting suit and in disrespect for the authority of the Supreme Court.
The governors said unless the order of injunction was granted, the federal government would continue to disregard, disrespect and ignore the pending suit in the Supreme Court.
They said: “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 Odumegwu Ojukwu (1986) pt 1 NSCC 304 and Rotimi Chibuike Amaechi V INEC (2008) 5 NWLR (PT 1080) 277.”
The governors described the action of the government as executive lawlessness and impunity.
They said the proposed disbursement of $1 billion by the federal government, its 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 is granted,” the governors had argued.
In an-18 paragraph affidavit attached to the application, deposed to by Mr. Ephraim Ajijola, a lawyer at the law office of Awomolo, the governors said: “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 reminded the 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.”