A Federal High Court sitting in Abuja on Friday, 5 November, stopped the federal government from going ahead to deduct $418m Paris Club debt from the bank account of the 36 state governments in the country.
Justice Inyang Ekwo issued a restraining order against the federal government following an ex parte application argued by counsel to the 36 states, Jibrin Otukepa and Ahmed Raji, both Senior Advocates of Nigeria.
While moving the application, Otukepa, who led the legal team of the states, told the judge that the states would be completely crippled if the federal government should go ahead to deduct the huge amount from the bank accounts of its clients.
The senior lawyers told the judge that the federal government predicted the plan to deduct the $418 million from the state account monthly to service debt for contracts allegedly executed for the states.
However, Otukepa said that the 36 states Attorneys General have scrutinized the purported contract and judgment and found that the states were not parties to court action that resulted in the judgment debt.
He further submitted that the purported contract claimed to have been executed for the states are not known to any of the 36 state governments and is, therefore, a phony contract.
The Senior lawyer further told the court that the federal government was the only party to the court case that brought the judgment and therefore such judgment is not binding on the state government.
Justice Ekwo after listening to the arguments of the 36 states ordered the federal government not to go ahead to make any deduction from the state account in respect of the purported court judgment until all issues relating to it are fully determined.
The Judge fixed the matter for November 30th and ordered the plaintiff’s lawyer to serve all processes on the defendants before the adjourned date.