In the last two weeks, the Nigeria Governors’ Forum (NGF) and the Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami (SAN), have been engaged in brickbats over how to compensate consultants who assisted states and local governments to recover their shares of the Paris Club refund. Lawyers, in this report by ERIC IKHILAE, suggest the way out.
The Federal and 36 states’ governments have, in recent times, been at loggerheads over some issues, among which is the right to collect stamp duties, the query over the status of recovered looted funds and assets, and the collection of the Value Added Tax (VAT).
The latest, however, is the dispute over what constitutes the actual indebtedness of the states, through the Nigeria Governors’ Forum (NGF) and the 774 local government areas, through the Association of Local Governments of Nigeria (ALGON), to some contractors engaged by the states and local governments to retrieve their shares of the Paris Club refund (PCR) and the London Club debt buy-back deals.
How it all began
According to the documents seen, the issues began around 2003 and 2005. By the arrangement, the states and councils were to be refunded what was over deducted from their accounts between 1995 and 2002 for the servicing/repayment of both debts.
For reasons best known to them, and despite each having ministries of finance and justice, the various state governments and councils decided to engage consultants (lawyers, accountants and other professionals) to help retrieve their shares of the proceeds of both deals.
In early 2013, and on learning that the refunds were in the custody of the Federal Government, ALGON along with one of its consultants, Linas International Ltd and 235 others (on behalf of themselves and as representatives of all the Local Government Councils and Area Councils of Nigeria) sued the Federal Government and three others before the Federal High Court in Abuja.
The suit marked: FHC/ABJ/CS/130/2013 also had the Attorney-General of the Federation (AGF), the Minister of Finance and the Accountant-General of the Federation as the other defendants.
On December 3, 2013, the court entered a judgment of $3,188,079,505.96 against the defendants. The plaintiffs initiated garnishee proceedings. In a ruling on June 27, 2016, Justice Adeniyi Ademola held in favour of the plaintiffs – represented by a legal team led by Joe Agi (SAN) – and stated that the proceedings were properly initiated.
Justice Ademola rejected the objection raised by the Central Bank of Nigeria (CBN), listed as the sole garnishee and represented by a team of lawyers led by Ahmed Raji (SAN); the Federal Government and AGF (represented by Abubakar Musa) and the Accountant-General of the Federation (represented by C.S.E. Obong).
The judge proceeded to make absolute the garnishee order nisi he earlier issued on April 1, 2015, and ordered the garnishee (the CBN) to pay the judgment sum to the plaintiff, with some conditions.
Justice said: “The order nisi dated 1st April 2015 is hereby made absolute. The garnishee (CBN) shall pay over the judgment-debt of $3,188,078,505.96 to the local governments in Nigeria to be warehoused in the Central Bank for disbursement to them, less 20 per cent consultancy fees.
“The garnishee shall forthwith pay 20 per cent of the above judgment debt of $3,188,078,505.96 to the first judgment creditor (Linas International Ltd) through its solicitors, Joe Agi & Associates into Stanbic IBTC Bank sort code: 221070424 account No: 0001725341.”
The dispute
As could be discerned from the arguments by both sides so far, parties agreed that, indeed, the states and councils engaged consultants for the recovery of what was due to them from the Paris Club and London Club debts refunds.
The dispute, however, exists in ascertaining the actual consultants, services rendered and their actual entitled fees.
AGF’s position
Malami claimed to have done all the necessary investigation to ascertain the consultants, the job done and what was due to them.
He stated that sometimes in early 2016, ALGON brought the 2013 judgment to the attention of the Federal Government and requested that the judgment debt be paid, a request he claimed the states agreed to and volunteered to receive the funds on behalf of the councils.
The AGF said when the issue was brought to his attention, he wrote to some security agencies to investigate the claims by the states and councils as it relates to the engagement of consultants, works done and the actual payment due.
“The fact is very clear that in consideration of the financial status and the volume of the transaction, due diligent relating to contractual undertones and the judgment were carried out by the office of the AGF to guard the government coffers against being robbed by some unscrupulous agents like the case of the Process and Industrial Development (P&ID),” Malami said.
He added that the result of his investigation showed that the consultants were engaged and that they carried out the responsibilities for which they were engaged and that they deserved to be paid. In particular, Malami said part of the findings by the EFCC was that a firm, Riok Nig Ltd and a law firm, Ted Edwards & Partners were engaged by ALGON.
“Findings of the investigation of the law enforcement and security agency also revealed that there exists a valid consultancy and legal service agreement between Ted Edwards and Partners and ALGON for the recovery of Local Governments’ share of the London debt buyback and exist from the Federal Government consolidated revenue fund.
“With regards to the level of completion of the contract awarded to Riok Nig Ltd and its physical existence, verification exercise conducted throughout the 774Local Government Areas in Nigeria confirmed the existence of the projects. However, while some have been completed, others are at various stages of completion,” Malami said.
The AGF cited a letter dated February 4, 2014, written by the National President of ALGON, confirming that the association awarded a contract to Riok Nig Ltd for the “provision of a borehole, overhead tank, generating set and water reticulation works in two locations in the 774 Local Government Area/Councils in Nigeria.”
Malami said based on the investigation by the security agencies, the Federal Government was advised to make the refund to the states and LG, but on the condition that each state governor executes an indemnity in favour of the Federal Government to receive the money for the Local Governments, which the governors did.
“The 36 states governors received the entire refund, less a curious five per cent for legal fees, which was paid to the NGF, without deducting legal and consultancy fee as mandated by the courts.
“The recovery was made by the consultants, but paid to the 36 states governors by the Federal Government of Nigeria without first, deducting consultancy fees for those who laboured for the recovery, as mandated by the courts.
“It was the consultants who discovered the over deduction necessitating the refunds; it was the consultants that went to court and got judgment on behalf of states and LGs, and it was the consultants who also went to court to get garnishee order absolute for and on behalf of the states and LGs, which led to the refund by the Federal Government.
“The governors cannot collect the money awarded under suit No: 130, refuse to pay the consultants who did the work, and then seek to set aside the judgment in suit No: 130 after collecting the money. The current effort by the Federal Government is to recover that portion it overpaid the governors, which was meant for the consultants, as mandated by the courts.
“The Federal Government is a law-abiding government. The judgment of the court stated how much each party should get and, in this situation, where one party was overpaid, that amount which they were not entitled to has to be refunded and paid to those it belongs to,” Malami said.
NGF’s position
The governors are contending that it was not the responsibility of the AGF to fight the battle of the consultants engaged by the states and councils.
The NGF, while admitting that some of the consultants had been paid before now, said it required time to verify their claims and fresh claims after the initial payments made from 2016 to 2018.
The NGF, while arguing that the judgments rendered by the contractors and on which the AGF claimed to have based his decisions, were suspect.
It insisted that it had taken steps to challenge the judgments and was investigating some of the payments made before to make a demand for refunds where fraud is ascertained.
The governors faulted the report of the investigation conducted by the State Security Service (SSS) and the EFCC at the instance of the AGF, arguing that such security agencies lacked the requisite knowledge to engage in forensic auditing required.
They also faulted some findings of the investigators, which the AGF purportedly relied on.
The NGF noted that “one of the strange payments made is that of USD$47,831,920 million to Panic Alert Security Systems Ltd/George Uboh for allegedly reviewing a 16-page judgment for the then factional NGF.
“Can the Office of the HAGF point to any consent judgment awarding that sum to PANIC Alert? Did the NGF’s letter of 20th January, 2020 relied upon by the HAGF ever recommend the payment of any sum?
“Linas and Ned Nwoko, in this scheme, are walking away with US$68,658,193.83 state funds allegedly for legal consultancy services. Is the AGF not aware that the work alleged to have been done by him was already contained in a FAAC Reconciliation Committee Report constituted in 2005 submitted in 2007 with recommendations on how states and LGAs should be refunded the over charges from the Paris Club Refunds.
“Dr. Ted Iseghohi-Edwards has been paid the sum of USD$159m in promissory notes, yet he had his matter in Suit No FCT/HC/CV/1353/18 struck out on November 10th, 2020. Furthermore, the legal basis for his claim is rooted in suit No: FHC/ABJ/CS/130/13: Linas International & 235 ors v. FGN, which clearly stated that he cannot benefit under the judgment because he was not a party in the case and cannot enforce the terms of the judgment.
“Contrary to the representation of the AGF, the EFCC’s report on Ted was negative. The report not only recommended his arrest but a forfeiture of any of his assets associated with the Paris Club Refund. The AGF ignored these recommendations.
“Riok, to whom the AGF supports and recommends the payment of USD$142,028,941.95 was also excluded by Justice Ademola in the judgment in the Linas case. This was confirmed by the Court of Appeal in Appeal No CA/558/2017. That is the appeal now before the Supreme Court. (SC).
“Which judgment then is the basis of the AGF’s recommendation that Riok be paid the sum of $142,028,941.95. There is also no evidence of execution of any contract by Riok.
“Curiously, the Department of State Security (DSS) is alleged to have confirmed 50% execution.
“The court and EFCC stated clearly that it is not the responsibility of the DSS to ascertain the execution of contracts as they do not have the expertise. ALGON disowned the contracts. Why will the AGF insist on them? It is not true that the EFCC in its report recommended payment to the contractors. It did not.
“In the case of payments recommended and paid to Prince Orji Nwafor Orizu US$1,219,440.45, and Olaitan Bello – US$215,195.36, it remains a mystery. These two lawyers are alleged to have performed legal services for RIOK and its associated companies and not for the states or LGAs. Why they are paid from state resources is only imagined?”
NGF’s Chairman Governor Kayode Fayemi of Ekiti State recalled that after President Muhammadu Buhari directed the payment of the refund to states in 2017, Malami requested for information on the payment of fees for consultants, which information was passed to him, following which a total of $350 million was approved by President Buhari as a full and final settlement.
Fayemi added that “some of these funds went to some of the people who are now back to the Attorney-General claiming $419 million. So, if in 2017, a certain amount of money had been approved as full and final payment, where did this $419 million come from?
“I suppose that is the question that the court needs to help unravel. And that is why we were saying, Mr. Attorney-General, you were the one behind the settlement of the $350m in the first place. Why the hurry, if we are challenging your $419 million?” He said.
Fayemi said the current NGF wants to ensure that the right thing is done by challenging some of the judgments in court. He called for caution and urged the AGF to tarry awhile and allow the courts to take a holistic and closer look at the entire cases currently pending before them.
“Why can’t the Attorney-General who’s a Senior Advocate of Nigeria wait for the court to adjudicate over this matter and resolve them one way or the other? If the court now says Nigeria Governors’ Forum, you’re liable, then, we wouldn’t have a choice. We would have to pay the money in question, but at this point, that’s not been the case.
“This case has not been sufficiently adjudicated on and they are still sitting in court. All that we need to see the Attorney-General for, we have done this in private, we have done this in his office; we have gone to the President to highlight this. Let this matter be resolved in court and we would take it from there,” Fayemi said.
NGF’s spokesman, Abdulrazaque Bello Barkindo, argued that any discerning legal mind would find no difficulty in concluding that the so-called judgments under reference are dripping with too many irregularities bordering on competence and lack of jurisdiction, which are the bases why some of them are being challenged on appeal and in other courts.
Barkindo added: “No diligent public officer would act on such judgments by recommending payment. It is even more curious that the AGF also recommended payments to some contractors allegedly based on judgments that did not make any monetary award or on claims that were struck out.
“The AGF may need to explain to Nigerians why these particular judgment-debts are given unusual attention and priority and processed with supersonic speed over and above all others; some of which preceded these so-called judgments and have been pending for settlement by the AGF for several years.
“The AGF also claims he intervened to pay the contractors to avoid execution of the judgments against the Federal Government resources. That is absolutely not true at all. Assets of the FGN were not at any time threatened. The NGF is not aware that there is any existing mandamus issued by any court in favour of the contractors against the Federal Government. The only application for mandamus by PANIC Alert is pending for hearing at the Federal High Court and parties have since joined issues.
“The AGF also says that the NGF and LGAs seek to transfer their liability to the FGN. That is not true. There is no liability to transfer in the first place and none exists; neither has the NGF provided any undertaking or indemnity to the FGN to act on its behalf as represented by the AGF,” Barkindo said.
The way to go
Legal experts, who are familiar with the issues, have suggested ways the dispute could be properly addressed.
Prof Yemi Akinseye-George (SAN), John Baiyeshea (SAN) and Tunde Falola have advised parties to tread softly and work towards an amicable settlement.
Akinseye-George Akinseye said: “The matter should be resolved amicably and out of court. The fees claimed by the consultants should be reviewed and an acceptable amount agreed.
“A labourer is worthy of his wages. Having conferred benefits, the consultants must be paid. But the fees must be reasonable.”
According to Baiyeshea, “the governors should insist on preventing the so-called consultants from fleecing Nigeria of millions of dollars.
“The AGF should actually be at the forefront in the effort to prevent shylock consultants from ‘eating’ Nigeria raw.
“I will advise the AGF to cooperate with the governors’ forum.”
Falola suggested that “the best way to resolve the lingering crisis is for all the parties concerned to maintain the status quo and allow the courts to determine all pending cases at various levels in the interest of the rule of law and the nation at large.
“In law, none of the parties is allowed to take further steps that may jeopardise the hearing and determination of the cases both at the Supreme Court, Federal High Court and any other court for that matter.”
