The request for the deduction of $318 million from the Federation Account as legal fees to a judgment creditor has set governors on a collision course with the Federal Government.
The money is to be deducted over a 10-year period, from the account of the 774 Local Government Areas.
Those making the request have asked Finance, Budget and Planning Minister Mrs Zainab Ahmed to issue a promissory note pending the determination of legal issues surrounding the controversial issue.
The judgment creditor, Dr. Ted Iseghohi Edwards’ claimed, through his counsel, Ikechukwu Ezechukwu (SAN), that he got a Garnishee Order absolute attaching funds of Local Governments in the custody of the Central Bank of Nigeria (CBN).
He said he rendered Legal and consultancy fees to the 774 local government councils in getting refunds of First Line Charge/ Paris Club Deductions.
According to him, he offered the services through a mandate from the late Chairman of Board of Trustees of the Association of Local Government of Nigeria (ALGON), U.K Ibrahim.
He said the Garnishee Order followed the decisions of both the FCT High Court and the Federal High Court which entered judgments in his favour for the sum of $318million (N152, 640,000,000)
He said the Federal Government has agreed to pay less than the full judgment debt.
He claimed that President Muhammadu Buhari had since December 2020, approved the payment of the $318million through the issuance of a Promissory Note because the country is in financial straits.
The deduction of the N152.6billion will be made from the accounts for the next ten (10) years.
But the governors and ALGON have asked the Minister to stay action on the promissory notes pending the determination of all legal issues on the judgment debt.
In a March 29th, 2021 to the President, ALGON said it never gave Dr. Ted Iseghohi Edwards, any engagement or instruction or power of attorney to represent it.
It also said no local government in the country gave any mandate to Dr. Ted Iseghohi Edwards.
The governors on Monday took up the battle against the release of the money.
Acting under the auspices of the Nigeria Governors Forum (NGF), the governors said whatever affected local governments has implications for states by virtue of Section 162(5) of the 1999 Constitution.
The NGF’s counsel, Femi Falana (SAN) in an April 19 letter to the Minister said: “The Nigeria Governors’ Forum (NGF) has engaged our services to’ challenge the decisions of the Court relating to or connected with payments of Legal and Consultancy fees arising from London Club Debt, Buy Back and London Club Debt Exit Payment, which is the fulcrum of the judgment of the Federal High Court, Abuja in Suit No: FHC/ABJ/CS/130/13 — LINAS INTERNATIONAL LIMITED & ORS.V. THE FEDERAL GOVERNMENT OF NIGERIA & ORS.
“As you already know, the claim of Dr. Ted Iseghoni Edwards arose from legal services he allegedly rendered to the Association of Local Governments of Nigeria (ALGON).
“Consequently, we have prepared all the Court processes challenging the judgments of Courts and seeking for Stay of execution and/or injunction pending appeal.
“We have been unable to file due to the ongoing strike by the Judiciary Staff Union of Nigeria (JUSUN), which has occasioned a complete shut-down of our Courts. Find attached herewith copies of the processes already prepared and awaiting the re-opening of the Courts for filing.
“Our attention has been drawn to a letter from the firm of Ikechukwu Ezechukwu, SAN & Co dated 8” April, 2021 urging you to issue promissory notes to Dr. Ted Iseghoni Edwards.
“We respectfully urge you not to accede to the request because these promissory notes are to be deducted from the accounts of the States for the next ten (10) years. It is therefore expedient to await the outcome of legal steps being taken by the States as represented by the NGF.
“Section 162(5) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) mandates any amount standing to the credit of local governments to be paid directly to the states for the benefit of their local government councils. The states therefore have a responsibility to ensure that funds standing to the credit of the local government councils are protected as custodians of such funds.
“We need to inform you of your sacred duty of staying action on this matter in view of the injunctive reliefs sought in the processes to be filed in Court on these matters.
“While extending the assurances of our highest regard, we hope that you will exercise restraint by resisting any urge to issue promissory notes to anyone (including Dr. Ted Iseghohi Edwards, Mr. Ned Munir Nwoko, Panic Alert Security Systems, Dr. George Uboh, Riok Nigeria Ltd, Prince Orji Nwafor-Orizu & Barrister Bello Olaitan Busayo) pending the determination of these actions by the Court.”
In an April 8th 2021 letter to the Minister of Finance, Mr. Ikechukwu Ezechukwu, (SAN), who is the counsel to Dr. Ted Iseghohi Edwards demanded issuance of the promissory notes to his client.
The letter reads in part: “We are counsels to Dr. Ted Iseghohi Edwards (Judgment Creditor) herein referred to as our client.
“Our client got a Garnishee Order absolute attaching the funds belonging to Local Governments in the custody of the Central Bank of Nigeria in satisfaction of a Judgment debt as per Judgments of both the FCT High Court and the Federal High Court of Nigeria which entered Judgment in favour of our client for the sum of $318,000,000.00.
“At the instance of the Federal Government, this Judgment was compromised to the effect that the Federal Government agree to pay less than the full Judgment debt. Mr. President has since December 2020 approved the payment of this sum through issuance to our client a Promissory Note because the Country is in financial straits.
“Since the approval of Mr. President, you, as the Minister responsible for carrying out the Presidential approval, have refused to carry out your official reasonability as a Public Officer hiding under the cloak of awaiting for consent and responses of the judgment debtors.
“We hereby demand on behalf of our client your immediate compliance with the Presidential approval and effect the satisfaction of our compromised Judgment debt by issuing our client with Promissory Notes as proved.
TAKE NOTICE that in the light of the Attorney-General’s press conference on Tuesday 6th day of April 2021 debunking all allegation in the social media concerning the judgment debt, we shall after seven (7) days of the date of the receipt of this letter by your ministry you failed, refuse or neglect to comply with the presidential directive, our client will have no choice than to seek remedy in the Court claiming his entire judgment debt and 10% interest per month until the liquidation thereof.“
The letter to the Minister was copied the Director-General Debt Management Office (DMO) on April 8th, 2021.
The letter to the DMO reads “We act for Dr. Ted Iseghohi Edwards. Find enclosed a letter we wrote on behalf of our client to the Hon. Minister of Finance and copied to the Hon. Attorney General of Federation.”
In a March 29th letter to the President, ALGON said it was opposed to the payment of the N152.6billion to Ted Iseghohi Edwards.
It also said it did not enter into any consultancy or legal engagement with Dr. Ted Iseghohi Edwards.
It said: “There is no evidence anywhere the Local Governments engaged Ted Edwards to recover Paris Club Refunds on their behalf. No engagement or instruction letter, power of attorney or letter of authority was issued by a single local government to him.
”We must make it abundantly clear that any payment to Dr. Ted Iseghohi Edwards by the Federal Ministry of Finance, Budget and National Planning from the Local Governments’ Allocations without the consent or authority of any Local Government Councils will be an illegality and a clear violation of the principle of tier autonomy over government funds enshrined in the constitution and recognized by the Supreme Court.
“It could also open a floodgate of claims by local governments across the country against the Federal Ministry of Finance and any other Ministry or Agency that facilitates such illegal and fraudulent payment.