Paris Club refunds: 36 states lose $418m suit against FG

The Federal High Court sitting in Abuja has dismissed a suit filed against the Federal Government by the Attorneys-General of the 36 states of the Federation.

The 36 Attorneys-General, in a suit dated October 27, 2021, are challenging the planned deduction of $418 million from the Federation Account to settle debts owed consultants engaged by the states and local governments in relation to the Paris Club refunds.

Other defendants are the Central Bank of Nigeria, Debt Management Office (DMO), Federation Account Allocation Committee (FAAC), and Incorporated Trustees of Association of Local Government of Nigeria (ALGON).

Delivering his judgment on Friday, Justice Inyang Ekwo, dismissed the suit saying the attorneys-general have not shown enough evidence to accord them the right to institute the action.

He held that they lack the legal standing to institute the lawsuit without their governors’ consent as there was no express evidence to show that the governors of the 36 states consented to the filing of the suit.

He noted that the office of the Attorney-General of a state was created under Section 195 of the 1999 Constitution (as amended), adding that the Attorney-General of a state is appointed by a governor which makes him an appointee under the control of a governor.

He said: “The state Attorneys-General cannot on their own bring this suit given the provisions of Section 211 of the 199 Constitution

“This is beyond the powers of the states Attorneys-General to initiate this suit on their own.

“No cause of action can flow when a plaintiff lacks the legal standing to institute a suit.

“This suit does not fall within the class of suits that can be initiated by the State Attorneys-General without the consent of the governors.

“I find no merit in this suit and it is, accordingly, dismissed.”

Persecondnews.com recalls that Paris Club became popular in Nigeria in 2005 when it judged the federal government’s economic reforms as far-reaching, and focused that it canceled 60 percent of the country’s $30bn debt.

Before the debt was written off, the Federal Government had agreements with state governments to deduct certain amounts from their federal allocation to service the debts.

Following a final agreement with the club in October 2005, some states that have been over charged in the debt servicing arrangement applied for a refund.