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CBN seeks out-of-court-settlement over $3.2bn judgment against FG

The Central Bank of Nigeria told a Federal High Court in
Abuja on Tuesday that it had initiated settlement talks with
the beneficiaries of a $3.2bn judgment obtained against the
Federal Government on December 3, 2013.

The plaintiffs, who won the case against the Federal
Government, comprised 234 local governments of various
states of the federation, the Association of Local
Governments of Nigeria and their consultant, Linas
International Limited.

Key government officials who were sued as defendants,
comprising the Federal Government, the Attorney-General of
the Federation (then Mr. Mohammed Adoke), the Minister of
Finance (who was then Dr. Ngozi Okonjo-Iweala) and the
Accountant-General of the Federation, failed to defend the

They also refused to appeal the judgment up till when the
judgment creditors commenced garnishee proceedings for
the enforcement of the judgment. The CBN, being the bank
holding custody of the Federal Government’s account, is
the only respondent in the garnishee proceedings.

The case is now at the last stage of garnishee proceedings
(garnishee absolute), the court having earlier granted
‘garnishee nisi’ order summoning the CBN to show cause
why it should not be ordered to pay the sum of $3.2bn to
the judgment creditors.

At the resumed hearing of the garnishee proceedings on
Tuesday, CBN’s lawyer, Ms. Ozeigbe Omo-Egharevba, told
the presiding judge, Justice Adeniyi Ademola, that
representatives of the CBN, the Accountant-General of the
Federation and the judgment creditors met on Monday.

“Representatives of the CBN and the Accountant-General of
the Federation met with the representatives of the plaintiff
yesterday (Monday) to see how we can explore an out of
court settlement of the case,” the lawyer said.

She did not give details of the meeting.

Counsel for the plaintiffs, Chief A. Akunebu, however said
he could not confirm if the development was true.
According to him, the plaintiffs’ lead counsel, Joe Agi
(SAN), who would have been in the position to confirm it
was just on his way to court in anticipation that the
proceedings would take place later.

The court then asked the parties to meet at 2pm, the time
which the matter was originally fixed, so that they could
agree on when they would return to court to report the true
position of the settlement talks.

The case was subsequently adjourned till July 6.

The judgment creditor had filed their suit through an
amended originating summons on June 11, 2013 asking the
court to interpret section 162(1), (3) and (5) of the
Constitution of Nigeria (as amended) regarding the use of
money in the Federation Account by the Federal
Government for servicing debt without first obtaining the
authorisation of the various tiers of government including
the local governments.

Specifically, the plaintiffs were dissatisfied with the Federal
Government’s use of money in the Federation Account for
servicing debt by way of first line charges between June
1995 and March 2002 without first obtaining the
authorisation of the other tiers of government including the
local governments.

They were also dissatisfied with the use of the money for
buy- back of London Club debt in 1992 and 2002 as well for
the exit payment of London Club debt in 2006.

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Posted By bobricky On 04:40 Tue, 30 Jun 2015

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