No End in Sight to Resolving Dispute over ECA as S’Court Adjourns Suit to Oct 18

Hope for an out-of-court settlement of the dispute between the federal government and the states over alleged illegal deductions from the Excess Crude Account (ECA) is fading fast as the Supreme Court on Tuesday granted an eight months adjournment to enable the parties continue to explore amicable settlement.

When the case came up yesterday, a lawyer from the Federal Ministry of Justice Abdul Maliki, told the court that parties “are exploring option of amicable settlement.”
He therefore prayed the court   for an adjournment to enable parties settle out of court.

Yusuf  Alli (SAN) who appeared for the states did not object to the application for adjournment but prayed for an early date so that parties, “will know they have to do the needful before the next adjournment date for report of settlement or hearing.”
Justice Tanko Muhammed who presided adjourned the matter to October 18 for either a report of settlement or hearing.

 On December 8, 2015 when the case came up at the  Supreme Court, the parties told the court they were holding talks to settle the dispute out of court. It was then adjourned to yesterday for report of settlement.

While adjourning, the Chief Justice of Nigeria (CJN), Justice Mahmud Mohammed, who presided then had urged the parties to try as much as possible to settle the disputes before the next adjourned date or the court would go into full trial.
But that did not happen yesterday.

The CJN had noted that the matter had lingered for long, and such matter is better to be resolved outside the court.

He further stressed that parties should resolve before the next adjourned date.
The 36 states are challenging the legality of  the ECA and the transfer of $1billion from the account to the Sovereign Wealth Fund (SWF).
The  states are praying the court to decide whether the states had a share in the SWF.

The SWF manages the surplus income produced from Nigeria’s excess oil reserves on behalf of the states and federal government.
The 36 state governors are seeking an order declaring the proposed creation of the SWF illegal and unconstitutional.

The federal government had challenged the jurisdiction of the apex court to hear the suit, arguing that the matter was not between states and the federation, but a dispute between the states and the federal government which it said ought to have been filed before a Federal High Court.

The states are also praying the apex court to issue an order to effect that all sums standing to the credit of the ECA should be paid into court or be otherwise secured as the court may deem fit pending the hearing and determination of the substantive suit.

The governors of the 36 states also want the court to compel the government of the federation to pay into the Federation Account N5.51 trillion 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 ECA.
However, in a counter affidavit filed 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.

Mr. Uchena Njoku of the law firm 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 $1 billion from the ECA 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 ECA.

While asking the Supreme Court to refuse the application by the states to stop the federal government from transferring $1 billion from the ECA to the SWF, the latter’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 was granted.

The governors, through their counsel, Chief Adegboyega Awomolo (SAN), had applied to the Supreme Court to restrain the federal government from making any withdrawals howsoever from the account styled the “ECA” (or any account replacing same by any name howsoever), pending the hearing and determination of a suit they filed in 2008.

They also asked the apex court to order that all sums standing to the credit of the account styled the “ECA” (or any account replacing same by any name howsoever) be paid into a dedicated account at the instance of the court or be otherwise secured as the court may deem fit, pending the hearing and determination of the substantive suit.

Awomolo said the governors were forced to file the application because the federal government and its officials had consistently, and in total disregard for the pending suit, withdrawn, utilised, disbursed and allocated funds from the account and had nearly depleted N5.51 trillion being the balance on the account as at 2008 when the case was instituted.

He further stated that the federal government had announced its intention to withdraw, disburse and utilise another $1 billion from the credit balance from the account in disregard to the subsisting suit and in disrespect to the authority of the Supreme Court.