Court Freezes FG, CBN Accounts Over N103.5bn Judgement Debt
A Federal High Court, Umuahia has issued a global freezing order, directing the attachment of monies due to the Federal Government (FG) and the Central Bank of Nigeria (CBN) to satisfy $285.1million (N103.5 billion) judgement debt in favour of a firm.
The decision followed an ex parte motion filed by Interstella Communications Limited and Obi Barth Thompson, praying the court for same in 10 reliefs against the FG and CBN.
Out of the 10 reliefs sought by the applicants, the court granted five with a mareva injunction, ordering that all funds, equitable considerations and or assets of the respondents in the hands of third parties be frozen, attached and restrained.
The court held that such funds will include interest of $57,895 per day from September 3, 2019 to the date of payment of the full sum.
“Such funds be frozen (mareva injunction), attached, restrained and turned over to the plaintiffs within seven days of receipt of service of the order in satisfaction of debts accruing to the plaintiffs from the judgement of the Supreme Court of Nigeria, delivered on December 15, 2019 in SC. 500/2014, between Interstella Communications Limited & 3 Ors, the said debt sums not being in contest by virtue of their being affirmed by the apex court whereby they are immuned to any further appeal.
“An order directing the respondents to sequestrate within seven days of service and receipt of this order, that the sum of ($700million out of the aforesaid total claim sum of $1.6billion) and place same in a compound interest yielding account in the name of the chief registrar of the court as trustee of the said monies, towards full recovery from the respondents by the applicants of their lawful rights and or property in the form of judgement debt sum seized by the respondents…,” the court declared.
The court also ordered that the order be served on the respondents who shall within 10 days upon service and receipt of the order apply for it to be set aside upon providing proof that their outstanding to the applicants are fully satisfied by paying the total accrued debts sum into an account in the name Mr. Obi B. Thompson or as he may designate, adding that the order will become absolute if the debt is not settled to warrant the vacation.
The court further said: “An order directing the respondents to disclose within seven days upon service and receipt of this order to this court and to the applicants; and to the courts in any jurisdiction where the applicants may seek to enforce this order, all their assets in the hands of third parties.
“An order directing the aforementioned third party on who this order may be served, within ten days upon service and receipt of this order, to disclose the extent of the funds standing to the credit of the respondents.
“That service of this order be made on the third parties either by way of courier services, advertisement in a newspaper with national coverage or by bailiff of the court in the jurisdiction.”
The court held that all funds known and unknown to the respondents, payable or may later accrue to the respondents in whatever name such assets are held by their business partners or joint venture partners such as Royal Shell Dutch Petroleum Company and British Petroleum Company and their subsidiaries operating under any name anywhere be frozen.
Firms affected by the order include Exxon Mobil Corporation and its subsidiaries, Chevron Oil Company and its subsidiaries anywhere in the world and the Nigerian National Petroleum Corporation (NNPC) and its subsidiaries and assets anywhere.
The decision of the court is a consequence of the victory of the applicants from the high court to the Supreme Court regarding NITEL contract in 2004.
In 2004, NITEL had arbitrarily disconnected from the national inter-connectivity grid, the first nationwide high-speed broadband (100 percent internet-based multimedia network in Africa South of the Sahara) built in Nigeria by Interstella Communications Limited and Obi Thompson and thereby rendered the huge amount invested in building the network valueless.
When alternative dispute resolution mechanism brokered by the then Minister of Communications, Chief Cornelius Adebayo, failed, the applicants sued NITEL in Suit No: FHC/UM/CS/95/04 and won. By 2008, NITEL’s total indebtedness to Interstella was put at N23.666 billion and 48 million dollars. NITEL could not pay the debt and was not willing to appeal against.
Interstella Communications Ltd and Obi Thompson moved to lawfully disrupt the operations of NITEL by trying to stop the sale of NITEL and seize its assets.
But former National Security Adviser (NSA), Sarki Muktar intervened and pleaded with the respondents to relax the measures of freezing NITEL’s assets so that the FGN could go on with the sale, in exchange for the Federal Government taking over the debts owed Interstella and paying them immediately.
Parties agreed that the debt would be paid in 2009. That agreement is what became the consent judgment that gave cause to the garnishee proceedings against FGN fund with the CBN that ended up in Appeal No: SC. 500/2014, between CBN v. Interstella Communications Ltd. & 3 Ors., which the CBN and FGN lost; and which finally settled all issues contested between parties arising from suit No:FHC/UM/M/85/2011.
On December 15, 2017, the Supreme Court gave its judgment in Appeal No: SC. 500/2014, between CBN v. Interstella Communications Ltd. & 3 Ors. in favour of Interstella Communications Ltd. & Obi B Thompson, which appeal conclusively and finally affirmed the judgment debt sums owed the plaintiffs by the defendants.
It is on the strength of the apex court judgement that the judgement creditors filed the ex parte application, seeking to recover its funds from the respondents.
Meanwhile, legal minds, financial experts and regulatory authorities have expressed worries over government nonchalant attitudes to pending cases and order of court, stressing that much of that will come if government refuse to mend their ways.
They were however optimistic that the judgement would not be the end to the matter as the Federal Government and CBN would soon approach the appellate court for redress.
A senior Advocate of Nigeria, Mike Ahamba, who, in the past represented President Muhammadu Buhari as an opposition candidate, Chief Mike Ahamba, said the time has passed when Federal Government cannot sued.
He stressed that the 1999 constitution makes any dispute arguable against any body and in this instant case, the federal government is a party to the suit.
“In the days of the British Queen you can’t get an injunction against the Queen, it is no longer so. The court is competent to take cases against any authority or person and mareva injunction could be given in appropriate circumstances
“If Federal Government loses a case and an order has been gotten against it, the Federal government should take legal steps to fight instead of acting as it does not exist.
“Nobody is above the law. Government must learn not to ignore court orders because governments in Nigeria are used to ignoring court orders and these are the consequences .
If the judge had adjudged them to be owing someone, if they don’t like it they should go to court to get it set aside by appeal or something. They should not act as if the order doesn’t exist because it is a federal government:, he added.
Another lawyer and former director of Constitutional Watch, Aham Njoku, lamented that the government has not been serious about following cases in court for sometimes.
He said the attorney general can still negotiate with them and may appeal the decision of the court.
“Government should be serious because there are many of such cases that government have not followed resulting to such cases”, he said
Also, Constitutional lawyer, Mr. James Ezike , said it is not the first time such things have been happening .
According to him, there several cases where the judgment was given against Nigeria and they went on an appeal and lost. They were talking about sovereign immunity, but the judges were laughing over it.
“There will be more and more because during the military regime government destroyed the jurisprudence of International law in the ministry of justice and people that understand the issues are no longer there.
“ There is nobody to advise them on what was going on, the last person was retired and the office was closed. We don’t have it again in the Ministry of Justice. When it comes to international law, you just have to have the best brains, it is not a matter of quota and when you are doing it you have to involve everybody”, he added.
But a financial expert, who pleaded for anonymity, expressed worries over recurring judgements against the government in recent times.
He, however, said the judicial decision is just the beginning, as there would be two more opportunities and a very long time period to explore before it ends.