PERSISTENCE OF THE NIGERIA GOVERNORS’ FORUM (NGF) IN MISCHARACTERISING THE ISSUANCE OF PROMISSORY NOTES.

  • The Honourable Attorney General of the Federation and Minister of Justice,​​

    Federal Ministry of Justice Complex,

    Shehu Shagari Way

    Central Business District,

    Abuja.

    PARIS CLUB REFUND:

    OUR REACTION TO THE PERSISTENCE OF THE NIGERIA GOVERNORS’ FORUM (NGF) IN MISCHARACTERISING THE ISSUANCE OF PROMISSORY NOTES THEREBY FOSTERING FALSE NARRATIVES ABOUT THE LAUDABLE POLICY OF THE FEDERAL GOVERNMENT TO LIQUIDATE JUDGEMENT DEBTS

    We are part of the legal team for Ned Nwoko on the above subject hereinafter referred to as our client.

    In the past few days, the news and social media have been awash with skewed interpretations, false narratives and mischaracterizations about the ongoing enforcement of court judgments arising from several cases with diverse factual basis but all related to the Paris Club Refunds through the issuance of Promissory Notes to the judgment creditors. It is dishonest, deceitful and malicious to pretend that it is wrong to obey court orders. It beggars belief, that the body of governors who are large of the same party as the President and Commander-in-Chief is the ones condemning him for enforcing valid court judgments.

     

    We read in one of the national daily newspapers, Vanguard, of Friday 3rd September 2021, on page 27 under the title “Governors, Reps caucus tackle FG over $418m payment to consultants”. The publication quoted verbatim excerpts from a letter purportedly written by Mr Femi Falana, SAN on behalf of the Nigeria Governors’ Forum (NGF) to the Minister of Finance, Dr (Mrs) Zaninab Ahmed, on the subject of enforcing court judgments by issuing Promissory Notes to the judgment creditors. On Monday 6th September 2021, the Thisday Newspaper also carried a story on the front page on the same subject matter. The frequency with which letters about claims of lawsuits on behalf of the NGF on this subject is released to the press betrays the intention and scheme of the NGF to suppress the facts, confuse and abuse public opinion in order to continue its resistance in taking responsibility to pay for services rendered.

     

    It bears reiteration, under the prevailing atmosphere of misinformation, to recall that the present payments are part of a broad policy initiative of the Federal Government to liquidate judgment debts which are segmented into categories A, B, and C. The present payment falls into Category A for judgment debts of states and local governments, which were arrived at through the due process of the law.  Categories B and C comprise of judgment debts against Federal Ministries and MDAs worth approximately US$700m.

     

    It is common knowledge that the states and local governments have become a graveyard of so many companies, businesses and upstarts ventures who are lured into rendering services for which they take benefits and refuse to pay.  We commend the Federal Government for this bold policy initiative. The $418m is the cumulative sum payable to several consultants and lawyers for services which the NGF and the Association of Local Governments of Nigeria (ALGON) duly acknowledged and immensely benefitted from without any hue and cry about corruption and forensic audit or politicization of the payments to the states and local governments.

     

    Our client gave substantial concessions to the NGF and discounted the sum he is entitled to in the judgements being enforced.   Furthermore, the acceptance of Promissory Notes instead of direct cash payment, as was done for the states and local governments in the refunds, leads to a further loss of value by our client. If our client and perhaps other consultants were paid simultaneously with the refunds, which is the responsible thing to do, there would have been no need for the several lawsuits which are now being enforced and for which the Federal Government and the Federal Ministry of Finance is being vilified.

     

    It is expedient to bring to the notice of the Honourable Minister of certain background to this matter which hitherto is not  in the public domain:

    a.​that the NGF applied all manner of subterfuge, as it is doing presently, to arm-twist the former Minister of Finance, into paying to them the 1st and 2nd instalments of the 5% provided for legal fees and consultants in the sum of US$86,546,526.65 and N19,439,225,871.11 respectively, illegally into NGF bank accounts. The authentic consultants were not paid. Please see attached letter dated 7th December 2016.

     

    b.​Furthermore, the NGF illegally appropriated US$100m out of the US$350m approved by Mr President for Linas International Limited for the consultancy on Paris Club refunds to local governments. Linas International Limited and the lawyers were again shortchanged by the NGF.

     

    c.​The investigation and cases involving the questionable and later-day consultants hurriedly contrived and used by the NGF to funnel these sums of money are still ongoing with the Economic and Financial Crimes Commission (EFCC). It is always easy to forget that people had paid back to EFCC the money paid to them without justification. EFCC has investigated and issued three different reports on the involvement of Ned Nwoko with respect to Paris Club Refunds and all the investigations exonerated him.

    d.​We cannot fail to remind you, Sir, that the criminal first investigation on the role of Ned Nwoko and Linas International Ltd with Paris Club Refund claims was at your instructions to the Economic and Financial Crimes Commission (EFCC) in2016. Following that first investigation, two subsequent investigations were carried out by the EFCC and all affirmed the pivotal roles of  Ned Nwoko and Linas International Ltd in the consultancy for the Paris Club Reforms.

     

    e.​One fact that should not be lost in the dust of sensationalizing this matter by the NGF is that by the terms of engagement, our client spent his funds to execute the assignment on the clear condition that where no money was recovered there was no liability to the local and state governments, NGF and ALGON. He will bear the entire loss. He engaged other professionals and in some cases borrowed through private arrangements to achieve the objective.  The states and local governments never had confidence in the chances of success of these consultancies and will not stake their money to fund the inherent costs therein. Hence, they agreed to the percentages now being enforced and left the consultants to, “sink or swim”. The Consultants having succeeded, the state and local governments have taken the benefits and in what is becoming habitual of politicians at state and local government levels they do not desire to pay in accordance with agreements.

     

    As stated above, we represent one of the judgment creditors mentioned in the said publication. Ordinarily, we would have ignored the publication but because it quoted Mr Falana, SAN verbatim there is a need to correct the misinformation contained in the said letter which ignored age-long established legal principles as it applies to the case Mr Falana, SAN filed in court. Furthermore, it is on the basis of this case that the NGF is claiming that the Federal Government is going ahead to pay consultants when there is a case against the payments. This is a false impression as it relates to our client. There is NO CASE in court over the payment to our client to warrant a stay of execution of the judgment by the Federal Ministry of Finance. It is unfortunate that what is essentially a legal issue of the simple contracts is being politicized and sensationalized to skew public opinion and blackmail the Federal Ministry of Finance into declining the payments.

     

    1. By an earlier letter dated 19th April 2021 Mr Falana, SAN  sought to halt the Ministry of Finance from executing a valid judgment of the Court because he was planning to file a suit to challenge the payment. Draft court processes were attached to the said letter. The draft court process was an application by the NGF to the Federal High Court for Leave of the Court to appeal in the year 2021 the judgment of the Federal High Court was delivered in 2013 in Suit No. FHC/ABJ/CS/130/2013 and which has been executed. The Federal Government commenced execution of the judgment in Suit No. FHC/ABJ/CS/130/2013 in December 2016 by first refunding the states and local governments the 1stinstallment. The NGF initially resisted that Linas International Ltd is paid its portion of the judgment sum for consultancy. Following public outcry for the illegal appropriation of legal fees and the EFCC investigation, the NGF came clean and issued on 5th July 2017 a “LETTER OF NO OBJECTION” to the payment of Linas International Ltd Consultancy fee in Suit No. FHC/ABJ/CS/130/2013 as well as entered into a Terms of Settlement with Ned Nwoko in Suit No. FHC/ABJ/CS/148/2017. Please find attached the NGF Letter of No Objection dated 5th July 2017.

     

    2. We reacted to the letter as it relates to the payment to our client and corrected the obvious fundamental error which Mr Falana, SAN had fallen into, perhaps because he was not properly briefed, which is that the payment by Promissory Notes to our client by the Federal Ministry of Finance is not founded on Suit No. FHC/ABJ/CS/130/2013 which Mr Falana, SAN is seeking Leave to appeal against. The judgment being enforced, with respect to our client, is a CONSENT JUDGEMENT to which the NGF, Mr Falana’s client, is a party to, that is Suit No. FHC/ABJ/CS/148/2017. The question with a notorious answer is, CAN A PARTY APPEAL A CONSENT JUDGEMENT? The answer is NO. Copy of our letter dated 10th June 2021 is herewith attached.

     

    3. We find it curious that NGF through Mr Falana, SAN has either deliberately or for reasons we cannot fathom persisted in pushing the grave error of not distinguishing between the two judgments of the court and thereby misinforming the public and stirring unnecessary controversy that politicizes the matter. Contrary to the impressions created in the media, the Federal Ministry of Finance, Budget and National Planning (MFBNP) IS NOT paying our client PRESENTLY any money founded on Suit No. FHC/ABJ/CS/130/2013.

     

    4. We equally find it disappointing that the House of Representatives Caucus (HRC) will dabble into matters related to court judgments and sensationalize the same in the media without first seeking to understand the basic facts of the matter. The HRC as lawmakers should know that their legislative powers and oversight functions do not extend to matters in court and matters on which the law courts have passed judgment on. Section 6 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) establishes the court as the final arbiter in dispute resolution. It is shocking to note that the HRC (of the opposition party) should be urging the Chief Law Officer of the Federation, the Attorney General, to undermine the constitutional basis of the powers of the courts. The judicial system established by the 1999 Constitution has an inbuilt review mechanism through appeals against judgments.

     

    5. If the governors have the conviction that their umbrella body, the Nigeria Governors’ Forum is corrupt, the bold thing to do is to call them out and conduct internal self-cleansing. Nothing stops the governors from conducting a “Forensic Audit” on their activities as suggested by the HRC. As Law Makers, the HRC knows that it is a grave assault on the framework of the judicial arm of government to make statements or engage in actions that impugn the integrity of the judiciary or in any way suggest the same. AS STATED ABOVE OUR CLIENT HAS BEEN INVESTIGATED BY THE EFCC AND REINVESTIGATED ON THREE OCCASIONS AND HIS CLAIMS OF ENTITLEMENT WERE FOUND TO BE VALID

     

    6. We address the below issues relating to Suit No. FHC/ABJ/CS/130/2013.

    It is instructive that so far the NGF through Mr Falana, SAN has not alleged any fraud in the court processes he filed at the Federal High Court to seek leave of the Court to be joined and to appeal the 2013 judgment in Suit No. FHC/ABJ/CS/130/2013. Please find attached a copy of the application in court.

    The NGF application pending before the Federal High Court contends that based on the provisions of Section 162(5) of the 1999 Constitution (as amended)  which empowers the state governments to receive the revenues accruing to the local governments from the Federation Account, it ought to have been made a party in Suit No. FHC/ABJ/CS/130/2013.

    The NGF team of senior lawyers understands the legal principles involved with the process and the arduous hurdles involved in waking up to challenge a judgment several years after you promoted its execution. We summarize some of the basic principles for ease of appreciation:

    a.​First, after every judgment there is a 90-day window for aggrieved parties to appeal the judgment. During this 90 day period (window) the judgment will not be enforced. At the expiration of the 90 days, you require the leave (permission) of the court to appeal the judgment. There are established grounds that must be satisfied before the court can grant you the leave to appeal.

    b.​The courts are reluctant to stay execution of their judgments after the 90-day window except on good grounds which the applicant must satisfy. The reason is obvious. Parties MUST NOT BE DENIED THE BENEFIT of the result of a court proceeding otherwise the essence of the court is eroded.

    c.​The law is that the application for leave does not act as a stay of execution of the judgment of a court. It is after the court has granted leave that it would consider any application for stay of execution of judgment. Again there are stringent and established conditions that must be satisfied to warrant the grant of the application for stay of execution of a judgement of a court.

    7. The court cannot grant a stay of execution of a judgement that has been executed.
    8. Contrary to the impression created in the letter quoted in the publication under reference and other publications there is no Order of Court ordering the Federal Ministry of Finance to stay execution of the judgment being enforced.
    9. It is expedient to recall that on 7th July 2017, governors under the auspices of the NGF set up a committee of the governors and engaged with several consultants, including our client,  at the Plateau Government Lodge, Asokoro where some of these consultancies were interrogated. Furthermore, the NGF was part of the processes that culminated in the enforcement of the court judgment in Suit No. FHC/ABJ/CS/130/2013 leading to the refunds to local governments and PART PAYMENT of the consultancy fees of Linas International Limited by the Federal Government in 2018. The same NGF now engaged Mr Falana, SAN to seek leave to appeal a judgment it participated in enforcing before the appointment of the current Minister of Finance.
    10. It is instructive to state that while the NGF through Mr Falana, SAN filed an application for leave to appeal Suit No. FHC/ABJ/CS/130/2013 on behalf of NGF, by his letter dated 25th September 2019 he sought to enforce the same judgment in Suit No. FHC/ABJ/CS/130/2013on behalf of ALGON. Paragraph 2 of the letter reads as follows:

    Paragraph 2

    “Following the suit instituted at the Federal High Court by our client in conjunction with local governments on the refund of the Paris Club Loan the Order Nisi was made absolute on 27th June 2016 directed the Garnishee to “pay over the judgment debt of $3,188,078,505.96 to Local Governments in Nigeria to be warehoused in the Central Bank for disbursement to them.”

    Paragraph 4

    “Since the local governments did not borrow any money from external sources the refund of the loan to them ought to be paid in line with aforesaid Garnishee Order……”(italics ours)

     

    11. In 2019 Mr Falana, SAN while acting for ALGON urged that the Ministry of Finance pay in accordance with the Court Order which also contained the order that our client is paid before the balance is paid to local governments. In a twist of position in 2021, Mr Falana, SAN while acting for NGF seeks to leave to appeal the judgment in the suit his client, ALGON   sought to enforce. In both instances, he placed reliance on Section 162 (5) and 162(6) respectively of the 1999 Constitution of the Federal Republic of Nigeria.
    12. The above sections deal with allocations to local governments. The NGF is misconceived about its powers and rights as prescribed by Section 165 of the 1999 Constitution over matters surrounding local government funds. The above section deals with “allocation” to local government funds in the Federation Account. It does not constrain local governments from exercising discretion to engage consultants or contractors or even expending their allocation.
    13. The facts and circumstances of the case at hand with respect to Suit No. FHC/ABJ/CS/130/2013, is entirely different from local government funds coming from allocations to the Federation account. The funds involved in this case were judgment sums recovered from the Federal Government by Linas International Limited in favour of local governments. The same judgment upheld the terms of engagement of Linas International Limited with local governments by awarding it a portion of the judgment sum as agreed. In fact, the Court ordered that the portion of the judgment in favour of the consultant should be deducted forthwith before the balance is paid to local governments.
    14. To the extent that the Paris Club Refund to local governments have gone through the judicial crucible, it is no longer funds from “allocation”. It is a judgment sum and not subject to Section 165 of the 1999 Constitution.  The judgment in Suit No. FHC/ABJ/CS/130/2013 attached Federal Government funds to repay local governments.
    15. The interpretation and narratives being pushed by the NGF through their lawyer Mr Falana, SAN is to deny the import, effect and powers of the courts to hear and determine matters and have the judgments obeyed. Our courts have always reserved the power in the 1999 Constitution to give judgments on matters including funds in the Federation Account.
    16. The lead law firm in Suit No. FHC/ABJ/CS/130/2013have prepared processes to deal with this matter.

    We have gone into the above summaries to lay bare the fact that the NGF picks and chooses what and when it is convenient to them to uphold the rule of law and seeks to manipulate public opinion in a matter in order to have the consultants at their mercy but for the redemption offered by the law courts, the businesses of the consultants would have been ruined. The NGF has eaten their cake and still want to have it back.

    Signed by;

    Joe Gazadma SAN, Ken Njemanze SAN, Joe Agi SAN, Jeph c.c Njikonye SAN, Onyeka Nwokolo ESQ. Tim Odaah E

     

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