The Supreme Court has at last commenced hearing in the suit filed by the 36 state governors against the Federal Government over the Excess Crude Account and the Sovereign Wealth Fund after both parties failed to settle out-of-court.
The 36 states are challenging the legality of the ECA and the decision of the Federal Government to transfer $1bn from the account to the SWF.
Despite a series of opportunities afforded the states and the Federal Government to arrive at a political resolution of the dispute since the case was filed in 2008, a panel of justices of the Supreme Court led by Justice Walter Onnoghen was on Monday informed that the settlement talks had collapsed.
The states have repeatedly expressed a willingness to have the court determine the case, blaming insincerity on the part of the Federal Government for the failure of the out-of-court settlement talks.
But on Monday, the Federal Government, which had been unwilling to argue the matter before the Supreme Court, showed a newfound resolve to engage the states by moving a motion, asking the court to direct the state governments to furnish it with particulars of their amended statement of claim to enable it amend its statement of defence.
The states, through their lead counsel, Malam Yusuf Ali, SAN, initially opposed the motion, arguing that the particulars of the amended statement are already available for the Federal Government as they are contained in the application they filed before the court.
“What they are asking for are things that are in the motion we filed,” Ali said.
Counsel for the Federal Government, Austin Alegeh, SAN, informed the court that since the settlement talks had failed, he needs the details of the states’ statement of claim in order to amend his defence.
“The report we got is that the settlement talks did not have the desired result.
“Now that we have reached a point where our client (Federal Government) informed us that it looks like settlement cannot be achieved, we need to amend our statement of defence,” he said.
However, in a bid to speed up the proceedings in the case, the states decided to withdraw their initial objection to the Federal Government’s request for the particulars of their amended statement of claim.
Withdrawing the earlier objection, Ali said, “We are no longer opposed to the application (for particulars of amended statement of claim).”
Following the development, the Supreme Court, in a short ruling, directed the states to, within seven days, provide the Federal Government with the particulars of their amended statement of claim.
“The plaintiff (state governments) is to supply the further particulars as required within seven days of this order while the defendant (Federal Government) is to file an amended statement of defence within 21 days of the receipt of the further particulars,” Justice Onnoghen stated in the ruling.
The Supreme Court adjourned the suit to September 23.
The states and the Federal Government failed to reach an out-of-court settlement to the dispute after several adjournments since the case was filed in 2008.
It was gathered that the settlement talks came up in a series of meetings between the vice-president and the governors, who also make up the National Economic Council.
However, the commencement of hearing in the suit meant that the Federal Government could not agree with the terms of settlement proposed by the states.
According to the terms of settlement, the state governments wanted the Federal Government to, three months after the execution of the terms of settlement, cause an inventory of the assets of the National Integrated Power Project, as well as the Railway Modernization Deductions, which should be undertaken by a reputable Nigerian accounting firm.
The states also demanded that the Federal Government should cause all sums standing to the credit of the ECA to be transferred to the Federation Account and distributed, within 10 days from the execution of the terms of reference, among the three tiers of government.
In the same vein, the states demanded that within 30 days of the execution of the terms of settlement the Federal Government should propose a legislation, and initiate a bill to the National Assembly, that will ensure the payment of all revenue which accrues from signature bonus into the Federation Account, for payment to the three tiers of government in accordance with the provisions of Section 162 of the 1999 Constitution.
Also, the states also asked the Federal Government to ascertain the exact amount standing to the credit of the Petroleum Technology Development Fund, as well as dividends derived from the NLNG Limited, and cause same to be paid into the Federation Account.
The states also proposed that the two parties would negotiate with a view to arriving at an agreement on the way to treat the proceeds of the sale of government properties and commercialization of government enterprises, as well as education tax.
The states equally demanded that any funds appropriated to the Federal Inland Revenue Service and the Nigerian Customs Service, which remains unspent as at December 31 of any year shall be paid into the Federation Account at the end of every financial year.
The states also asked the Federal Government to prepare a bill to regulate the grant of waivers and concessions to guide and streamline the exercise.
In the same vein, according to the states, revenue from dividends of shares and interests held by the Federal Government in any company from 2004 to 2007, amounting to N573bn, should be paid to the Federation Account and distributed among the tiers of government.
In the terms of settlement, the states also demanded that the Federal Government should bear the cost of their legal fees in the suit.