Excess Crude Account: Supreme Court Hears FG/Governors' Suit September 23
SAN FRANCISCO, March 24, (THEWILL) - The suit filed by the 36 states challenging the legality of the Excess Crude Account maintained by the Federal Government is to be heard by the Supreme Court on September 23, 2014.
The court fixed the date following the collapse of the out-of-court settlement between the Federal Government and the states.
The states are also challenging the transfer of $1 billion from the account to the Sovereign Wealth Fund (SWF).
The out-of -court settlement option has also failed after several attempts to settle the dispute had failed to yield any positive result.
Consequently, the Supreme Court consequently fixed September 23 for hearing of the application brought by the defendant (Federal Government) seeking to amend its statement of defence.
The 36 states had dragged the Federal Government to the Supreme Court praying for a decision on whether to decide whether the states have share in the Sovereign Wealth Fund.
The Supreme Court had earlier granted a request by the parties to settle the matter out of court and to explore an amicable resolution of the disagreement.
But when the case came up for hearing on Monday, counsel to the FG, Austin Alegeh (SAN),said the settlement between the parties had collapsed.
He therefore filed an application praying the court for leave to amend his statement of defence.
Alegeh further prayed the court to order the plaintiffs to furnish him with their amended statement of claims to enable him amend his statement of defence.
In his response on behalf of counsel to the states, Yusuf Ali (SAN), did not oppose the application.
He however, said the information which the defendant wanted had been included in the papers they (plaintiffs) filed before the court.
He said the last meeting with the Federal Government was in 2011 which yielded no result and the defendant was just coming in 2014 to amend its defence.
He submitted that the defendant's application was just to delay the hearing of the suit, as he described the application as an abuse of court process.
In his response, Alegeh stated that it was the office of the Vice President that was co-ordinating the settlement meeting and that the office just briefed him that the settlement did not yield any desired result.
"I have not been part of that meeting, when the settlement talk was on going, we did not amend our statement of defence.
The need to amend it has arisen due to the collapse of settlement talk," he said.
Presiding judge,Justice Walter Onnoghen, in his ruling granted the defendant's application.
He ordered the plaintiffs to supply further particulars required to the defendant within seven days and that the defendant should within 21 days file his amended statement of defence.
The plaintiffs in the suit are seeking an order of court compelling the Federal Government 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 however classified such earnings as 'excess crude proceeds' and 'excess royalties' which were paid into an account termed the 'Excess Crude Account'.
The governors further asked the court to order the Federal Government to transfer to the Federation Account all sums standing to the credit of the Excess Crude Account.
The Federal Government in its defence had accused the states of mischief because they took part in the deliberation of the National Economic Council(NEC) where the decision to transfer the $1 billion from the Excess Crude Account 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 Excess Crude Account.
While asking the Supreme Court to refuse the application by the states to stop the Federal Government from transferring $1 billion from the Excess Crude Account to the SWF, the counsel to the Federal Government 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 states had applied to the Supreme Court to restrain the Federal Government from making any withdrawals from the account styled the 'Excess Crude Account' (or any account replacing same by any name howsoever), pending the hearing and determination of the suit.
They also asked the.
Supreme Court to order that all sums standing to the credit of the account styled the 'Excess Crude Account' (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.
They said they 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.
They 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 for the authority of the Supreme Court.
The governors said unless the order of injunction was granted, the Federal Government would continue to disregard, disrespect and ignore the pending suit in the Supreme Court.
'The conduct of the Government of the Federation and her officials is a violation of the principle of the rule of law and breach of the independence of the judiciary and constitutes a violation of the principle of rule of law handed down by the Supreme Court in the case of Governor of Lagos V Odumegwu Ojukwu (1986) pt 1 NSCC 304 and Rotimi Chibuike Amaechi V INEC (2008) 5 NWLR (PT 1080) 277,' they said.
The governors described the action of the Federal Government as executive lawlessness and impunity, saying the proposed disbursement of $1 billion by the Federal Government, its Minister of Finance and other officers would create a state of fait accompli and helplessness, if not stopped immediately.
'It is in the interest of justice, preservation of integrity of the Supreme Court and the rule of law that this application is granted,' the governors had argued.