Excess crude account: Govs ask court to stop FG from making withdrawals

The lingering crisis over the Excess Crude Account deepened yesterday with state governors praying the Supreme Court to stop the Federal Government from making any withdrawals, howsoever, from the account styled the “Excess Crude Account” (or any account replacing same by any name howsoever) pending the hearing and determination of a suit they filed in 2008.

In addition, the governors also asked the apex 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 court or be otherwise secured as the court may deem fit pending the hearing and determination of the substantive suit.

While describing the action of the government as executive lawlessness and impunity, the governors said it was in the interest of justice, preservation of integrity of the Supreme Court and the rule of law that this application be granted.

Counsel to the aggrieved governors, Chief Adegboyega Awomolo (SAN) explained that his clients were irked by the fact that in view of the pendency of the lawsuit, the Federal Government had withdrawn, utilised, disbursed and allocated funds from the account and had nearly depleted the sum of N5.51 trillion being the balance on the account as at 2008 when the case was instituted.

This action by the Federal Government, Awomolo noted, was inconsistent and in total disregard to the pending suit.
In addition, he stated that the Federal Government had announced its intention to withdraw, disburse and utilise another one billion U.S dollars from the credit balance from the account in disregard to the subsisting suit and in disrespect for the authority of the Supreme Court.

The plaintiffs are contesting that unless the Supreme Court grants the injunction, the Federal Government would continue to disregard, disrespect and ignore the pending suits in the Supreme Court.
According to them: “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 Odumegu Ojukwu (1986) pt 1 NSCC 304 and Rotimi Chibuke Amaechi V INEC (2008) 5 NWLR (PT 1080) 277.”

They said the proposed disbursement of one billion United States of America dollars by the Federal Government, her minister of finance and other officers would create a state of fait accompli and helplessness, if not stopped immediately.
In an-18 paragraph attached to the application, deposed to by Mr. Ephraim Ajijola, a lawyer at the Law Office of Awomolo, the governors said: “At a press briefing held on October18, 2011 and reported same day on the “Network News” broadcast by the Nigerian Television Authority, the government of the federation, through the Minister of Finance, Dr. Ngozi Okonjo-Iweala, announced its intention to withdraw US$1 billion from the “Excess Crude Account” to start off a national sovereign wealth fund.

“That the said sum of US$1 billion sought to be withdrawn by the government of the federation from the “Excess Crude Account” to fund the national sovereign wealth fund forms part of the subject matter of the substantive suit.”
The governors reminded the court that one of the main issues in dispute between the parties in the substantive suit was whether the payment of revenue, which accrued to the government of the federation from the proceeds of crude oil sales, petroleum profits tax and oil royalties into any account other than the federation account by the government of the federation was illegal and unconstitutional notwithstanding that the proceeds from the aforesaid sources were in excess of the government of the federation’s estimate of the revenue that would accrue from the said sources.

The governors had gone to court to, among others, seek for an order compelling the government of the federation to pay into the federation account the sum of N5.51 trillion being the balance of the sum which accrued to the government of the federation during the period 2004 and 2007 from the proceeds of crude oil sales, petroleum profits tax and oil royalties which the government of the federation classified as “excess crude proceeds” and “excess PPT and Royalties” and paid into an account which was styled “Excess Crude Account.”
They also 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”.

Governors went to court to challenge the action, conduct and activities of the Federal Government of Nigeria with respect to the management and operation of the federation account.
The parties in this suit then exploited avenues of out-of-court settlement for over one year and agreed on a settlement but the settlement so reached could not be implemented and was also not entered as the judgment of the court.
Consequently, the case was set down for trial and parties were directed to exchange briefs.

However, the court did not sit on the days scheduled and the case had remained unscheduled.
While urging the court to grant their application, the governors said that they had satisfied all the requirements of law to entitle them to the injunctive relief sought.
According to them there is a substantial issue of law bordering on the constitutionality of the Federal Government’s power to create separate account as against the spirit and letter of the Constitution in so far as it related to the revenue of the nation in the substantive suit.

-Sun

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Posted by admin on Oct 25 2011. Filed under Governors, Headlines, Oil Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry