The next government will inherit $716 million in court debts
The presidency of Major General Muhammadu Buhari (retired) could pass on at least $715.86 million in court debts to the next administration, The punch has learned.
The judgment debts were listed in the form of 18 promissory notes in a document titled “List of Promissory Notes Issued by Category in March 2022” by the Debt Management Office.
According to Investopedia.com, a promissory note is an instrument of debt that contains a written promise by one party (the issuer or maker of the note) to pay another party (the beneficiary of the note) a specified sum of money , either on demand or at a specified future date price.
Section 4 of the Government Promissory Notes Act provides that government promissory notes are paid out of the general revenue and assets of the federation.
It read in part as follows: “The principal sums and interest represented or guaranteed by any promissory note of the Government are hereby charged and shall be payable out of the general revenues and assets of the Federation.”
Of the 18 promissory notes to judgment creditors, one matured on August 11, 2022, while the second matured on October 15, 2022.
The remaining 16 promissory notes will mature at different times between October 15, 2023 and October 15, 2031.
The punch recently reported that the federal government is facing several court cases over alleged breaches of contracts. A compilation of lawsuits filed against the government by local and foreign entities over the past two years could see Nigeria part with around 7.58 billion naira if the country loses the cases.
In September, Federation Attorney General and Justice Minister Abubakar Malami revealed that the federal government had agreed to pay $496 million to a foreign investor to settle a long-running $5.26 billion contract dispute. dollars.
The government said the mediation process was part of the alternative dispute resolution scheme of the International Chamber of Commerce headed by Phillip Howell-Richardson.
According to the government, the settlement agreement entered into force on August 19, 2022.
The new settlement of $496 million, added to promissory notes of $715.86 million to judgment creditors, would bring the total figure to $1.21 billion.
Olu Daramola, SAN, of Afe Babalola’s Chambers, who spoke with The punch recently said that the government is not used to championing causes.
He said: “Most of the cases against the government are due to negligence and mismanagement, leading to judgment against the government even where there could have been no judgment because it was badly defended. . But unfortunately, the tragedy is that when you file a lawsuit against the government, they may not care until you get a judgment.
“When you already have a judgment, negotiations become difficult because if you win your case in court and the person is now negotiating with you to take less than what was awarded in court, you will certainly not be willing. ”
The SAN added that the negligent signing of contracts created problems for the government.
For his part, Professor Sam Erugo, SAN, said it should be concerning to citizens that the federal government continually faces threats and imminent penalties or liability for alleged breaches of construction contracts.
A veteran lawyer, Matthew Burkaa, said: “No one will be happy to see funds that are supposed to be used for other things being used to pay court costs.
The punch also recently reported that the federal government is to repay five promissory notes worth N311.73 billion, all of which will mature in 2022.
While payment for three promissory notes will be made to state governments, the other two will be paid to judgment creditors.