Law News
$3.2bn judgment: CBN seeks out-of-court settlement

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 across 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 suit.

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 the 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 plaintiffs 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 1999 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 the 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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