Firm Sues Katsina over N66.268bn Paris Club Refund

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  • State denies liability

Tobi Saniyi

A financial consulting firm, Mauritz Walton Nigerian Limited, has dragged the Katsina State Government before a Federal High Court in Abuja accusing the state of failure to pay it 20 per cent of the $217.3 million (N66.3 billion) due to it from the Paris Club refund by the Federal Government.

Mauritz Walton, represented by Chief Wole Olanipekun (SAN), is claiming N13,253,774,451.60 being 20 per cent of the total N66.3 billion refund due to Katsina, being fees for its consultancy services to the state.

In its suit, now before Justice Inyang Ekwo, the firm claimed that it was appointed by Katsina State, via a letter dated August 18, 2014, with reference No: MOF/STAFF/409/1/31 to ascertain and recover the excess deductions by the Federal Government from its account to service its external debt between July 1995 and March 2002.

In its statement of claim, the firm said the Katsina State Government agreed to pay it 20 per-cent of what was due to the state from the excess deduction, which is commonly referred to as the Paris Club refund.

Mauritz Waltson’s Chief Executive Officer (CEO), Dr. Maurice Ibe, stated, in his witness statement that, through his firm’s efforts, it was ascertained that Katsina State was entitled to $217,274,991.01 (estimated at N66,268,872,258.00 calculated at an exchange rate of $1 to N305) as Paris Club refund.

Ibe added that his firm’s efforts yielded further results when President Muhammadu Buhari, in 2016 directed the payment of the first tranche of the Paris Club refund to states, including Katsina.

He stated that, although almost all the amounts due to the state had been paid into the state’s account, marked: 1019265062, in the United Bank for Africa (UBA), the state has refused and failed to pay his firm the 20 per-cent fees agreed between parties.

Ibe further stated that despite the pendency of the suit and existing interim orders by the court, restraining further payment to Katsina, the 2nd defendant (Central Bank of Nigeria), on the instruction of the 1st defendant (Finance Minister) recently paid N35,364,610,435 to the 4th defendant (Katsina State), through the 5th defendant (UBA).

The plaintiff is praying the court for several declaratory reliefs, particularly a declaration that it is entitled to N13,253,774,451.60 being 20 per cent of the total N66.3b refund due to Katsina, by virtue of the agreement between parties.

It also seeks an order compelling the Katsina State Government to pay it the N13,25 billion, being its due remuneration for the consultancy services it rendered to the state “leading to the recovery and release of the 4th defendant’s said external debt excess debits refunds.”

In the alternative, the plaintiff wants the court to order the 1st, 2nd and 3rd defendants – Finance Minister, the CBN and the Accountant General of the Federation – to pay it the amount due to it.

It urged the court to order the sum due to it be paid along with 20 per-cent interest from October 1, 2018 until judgment and thereafter, at 10 per-cent until the judgment sum is fully paid.

The plaintiff equally seeks N75million cost against the defendants – Finance Minister, the CBN, the Accountant General of the Federation (AGF), Katsina State Government and the UBA.

All the defendants have objected to the suit and urged the court to dismiss it on the grounds that the plaintiff was not entitled to the reliefs it seeks.

The Finance Minister, the CBN, the AGF and UBA denied being party to the agreement between the plaintiff and the Katsina State Government.

The Katsina State Government admitted, in its statement of defence, that it engaged the plaintiff in relation to the recovery of Paris Club refund, but argued that the firm was not entitled to the 20 per-cent it claimed, because it failed to meet the conditions contained in its engagement letter.

Katsina stated that it has “no reason to honour the demand of the plaintiff as contained in its letter of July 10, 2017 and at the subsequent meetings with the plaintiff as there was no any conclusive agreement between the 4th defendant and the plaintiff to pay the said 20 per-cent of the credited refunds as the plaintiff had been disengaged” by a letter of disengagement dated September 11, 2015.

The Finance Minister argued, in her statement of defence, that she lacked the power to withhold funds due to any state, as being sought by the plaintiff, except upon a specific order of a court.

The Minister further argued that all the refunds made to the Katsina State Government were upon the directive of President Buhari and that the last tranche of the refund has been made to the state.

On Monday (June 3, 2019) plaintiff’s sole witness, Ibe was cross-examined by lawyers to the defendants except that of Katsina State, who said he required about an hour to question the witness.

Ibe, while being cross-examined, insisted that his firm was entitled to be paid the 20-per-cent fees for the services it rendered to Katsina State and that the other defendants were indirectly involved because they were in custody of Katsina’s funds.

Justice Ekwo, while adjourning further hearing to October 14, 15 and 16 this year, warned parties against dissipating the res (subject of dispute) in the case.