N16BN DEDUCTION: LAGOS OPPOSES PHCN'S BID TO WITHDRAW APPLICATIONS

By NBF News
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LAGOS State Government, on Thursday, opposed the bid of the Power Holding Company of Nigeria to withdraw two defective applications before the Federal High Court in Lagos, following a dispute on the alleged deduction of N16bn by the PHCN from the state statutory allocation over the State's Independent Power Project.

The PHCN had in the applications sought to vacate a subsisting injunction restraining it and the Minister of Finance from making further deductions from the state's statutory allocation from the Federation Account on the basis of an agreement on the IPP.

Lagos had sued the PHCN and four others in March 2010 and alleged that the Federal Ministry of Finance had continued to make illegal deduction from its allocation on the order of the PHCN.

The plaintiff also joined the Ikeja Electricity Distribution Company; Eko Electricity Distribution Company; Transmission Company of Nigeria; and the Federal Minister of Finance as co-defendants to the suit.

The Lagos State further claimed that there was a Power Purchase Agreement between the parties on the power project, saying that under the agreement, the electricity agreed to be distributed to the state was to be in addition and not in substitution for the electricity that the PHCN would ordinarily supply to the state.

It also alleged that the PHCN had failed to distribute the electricity to the state and was thereby in breach of the agreement, saying that the electricity the state was paying for was being distributed to the entire nation.

It further claimed that the Ministry of Finance had continued the monthly deductions in favour of the PHCN from the state's monthly allocation, claiming that as at the time of filing the suit, the amount that had been deducted from it was in excess of N16bn.

The court later granted the application of Lagos State for an injunction and restrained the PHCN and the Minister of Finance from making father deductions.

But the PHCN's and its subsidiaries had urged the court to discharge the injunction while Lagos State had opposed the application.

When the matter came up on Thursday, lawyer to the PHCN, Dr. Babatunde Ajibade (SAN), told Justice Mohammed Liman, that he would like to withdraw the two applications on the grounds that they were defective, saying that he had filed another application to correct the anomaly.

But the Lagos State Attorney-General and Commissioner for Justice, Mr. Supo Shasore (SAN), opposed Ajibade's move to withdraw the applications just as he insisted that the development was an abuse of court process.

Justice Mohammed later directed the AG to file a formal application on the issue raised and urged parties to file written addresses and adjourned the case till June 2.

The Lagos AG also argued that the decision of Ajibade to file multiple applications on similar issues amounted to an abuse of court process.

He said since Ajibade had done so, it was no longer his prerogative to choose which of the applications he intends to utilize.

Acceding to him, it is appropriate for court to strike out all subsequent applications filed after the initial one.