The Federal Government yesterday asked the 36 state governors for an out of court settlement in a lawsuit instituted by them, challenging the legality of the Excess Crude Account and the decision to transfer $1bn from the account to the Sovereign Wealth Funds (SWF).
Yesterday’s request contradicted the Federal Government’s earlier stance on the matter.
The Supreme Court panel headed by the Chief Justice of Nigeria, CJN, Justice Dahiru Musdapher, could not hide its anger at the inconsistent positions of the Federal Government in the case three years after it started.
It will be recalled that the Federal Government had earlier admitted that it had been handling the Federation Account since 2004 in breach of Section 162 of the Constitution and that the Excess Crude Account was illegal.
The government had also posited that there was no need to litigate on issues of law that were clear and unambiguous; stressing that out of court settlement was the best option.
The position triggered a long discussion only for the Federal Government to later turn around and insist on going ahead with the trial of the case.
Justice Musdapher has just convoked a fresh panel headed by him to look at the merit of the suit.
But as soon as the apex court decided to go into the matter, the Federal Government came with a fresh application for more time to settle out of court.
But the states, which were poised for a showdown, accused the Federal Government of insincerity in its promise to settle out of court.
Counsel to the states, Yusuf Alli, SAN, said that his clients wanted the issue resolved “once and for all.”
But the counsel to the Federal Government, Austine Alegeh, SAN, pleaded with the court to allow a short adjournment to enable the parties hold further discussion and resolve the dispute amicably.
He said that almost all the issues had been resolved and that outstanding ones could still be resolved out of court by the parties.
The CJN expressed concern at the inability of both parties to reach a compromise even as he rhetorically asked, “if states and the Federal Government are not ready to uphold the sanctity of the constitution, who else will?”
He consequently adjourned the case to May 21, 2012 for the parties to report back to the court how far they have gone with the out of court settlement arrangement.
Governors of the 36 states had gone to court to seek an order compelling the Federal Government to pay into the Federation Account N5.51trn 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 Federal Government 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 $1bn 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 transfer of the $1bn 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 from the account pending the hearing and determination of the suit filed in 2008.