FG may lose N7.58tn to contract disputes, damages

September 12, 2022

4.9 min readCategories: News

lawyers, Onyeka Osigwe and Ekene Arubaleze from the law firm Goalcast Legal Services, the firm demanded N6.4tn royalty dues, operational cost and general and exemplary damages by SPDC.


In August 2021, 36 state governments dragged the Federal Government to the Supreme Court on the grounds that it diverted over N1.8tn in recovered loot and also N450bn worth of non-cash assets which were recovered from the proceeds of crime since 2015.


The plaintiffs said the sum which was supposed to be paid into the Federation Account, was illegally diverted into the Consolidated Revenue Accounts and others which the Nigerian constitution doesn’t recognise.

They said the CRA only belongs to the Federal Government and some states, adding that funds in the account were not distributable among the federating units.

In the suit, the plaintiffs asked for the remittance of N1.8tn cash and N450bn non-cash into the federation account.

issue in separate interviews with The PUNCH accused government officials of carelessness.


Olu Daramola SAN, from Afe Babalola’s Chambers,  said that the government was not in the habit of defending cases.

He stated, “Most cases against the government are due to negligence and poor handling leading to judgment against the government even where there could have been no judgment because it has been poorly defended. But unfortunately, the tragedy is that when you file a case against the government,  they may not bother until you get a judgment.apparent multiple breaches and defaults in settlement agreements on the Mambila power project represented another sad episode.


Erugo said like the other previous cases, they constituted national embarrassment and must be condemned in strong terms.


He stated, “To a large extent,  most of the actions and inactions of government officials border on criminality or incompetence.  The revelations in respect of the P&ID contract scam and arbitration with pending action by the government to avoid liability remain current. In that case, the government had strenuously canvassed that the nine contracts were signed in clear breach of due process and gone ahead to show the connivance of Nigerian citizens and officials in the scheme. Unfortunately, nothing tangible has been done to punish all the culprits. It boils down to impunity and failure of rule of law, especially crime and punishment.


“There is no doubt that similar challenges have impacted the Mambila power project breaches and defaults in settlement agreements. The Federal Government will rather shy away from prosecuting indicted officials and face the embarrassment of breaches and defaults. Corruption is killing the system,” Erugo said.


Garnishing proceedings

Human rights lawyer, Mike Ozekhome, SAN, in a telephone interview,  noted that the FG could be embarrassed if its accounts were subjected to garnishing proceedings.


Garnishee proceedings is a judicial process of execution or enforcement of the monetary judgment by the seizure or attachment of the debts due or accruing to the judgment debtor which form part of his property available in execution.

Ozekhome said, “It is better to negotiate once a judgment has been given. Otherwise, the Federal Government can be embarrassed when its accounts are garnished by garnishing proceedings, and this will embarrass Nigeria as a country.”

Another SAN, Babatunde Ogala, said it was the prerogative of the court of law to decide whether contracts were breached or not.


Ogala said, “I can’t specifically state whether it is proper or not for the Federal Government to find itself in such a situation since the details of the contracts allegedly breached are unclear.


“However, it is left to the courts to decide whether contracts were beached by the FG or not. The fact that the case is in court and that there are allegations of breaches doesn’t mean that the courts would determine that there were breaches.


“Also, people need to know the terms of those contracts, to know if indeed there were breaches because anyone could claim that a contract has been breached, whether it’s true or not. An example is the P&ID case which has now been found to have some underhand involvement. So, it is when the facts of the cases have been established that we can talk about the FG entering into negotiations or doing otherwise.”


A senior legal practitioner, Matthew Burkaa, noted that the Federal Government had tried to negotiate a settlement which was a proactive step to take towards sorting out litigation issues.


“Nobody will be happy to see that funds that are supposed to be used for other things being used for settlement of litigation expenses.


“As a legal practitioner, I will not support a situation whereby valid contracts negotiated between parties will be breached by any party,’’ the Senior Advocate submitted.


Burkaa stated that the outcomes of the cases depended on whether FG would follow through or go into negotiations.


“However, if a case is viewed by the FG to be built on fraud and meant to scam Nigeria, the government will have to fight the case to the end. But if the case is built on trust and integrity, why will the government not settle that kind of a matter? he asked.


But Daniel Makolo observed that some of the contracts were entered into by selfish and corrupt officials who wished to make more money for themselves.


The lawyer stated, ‘’If you look at the documents or agreements with foreign partners, companies etc, the proponents who signed on behalf of the Federal Government have vested interest in the contracts. They sign Nigeria into deeper problems than it is.

“They do not protect Nigerians even though they are government workers. If you remove the veil of the company, they are the promoters of the companies. They signed it in such a way that Nigeria will default and they will make money out of it.’’

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