13% derivation: Court orders FG to pay $951m to Bayelsa govt

A Federal High Court sitting in Abuja has ordered the federal government to pay $951 million to the Bayelsa State government.

The money being the 13 per cent derivative sum due as arrears of revenue payable to it.

The judgment was in respect of a suit marked: FHC/ABJ/CS/175/2012, and filed on February 12, 2021.

In the suit filed on its behalf by Ken Njemanze (SAN), the Bayelsa state government had, prayed the court to compel the Attorney General of the Federation (AGF), who was the sole defendant in the matter to pay five per cent of $50 billion recovered as additional revenue that accrued to the Nigerian government.

While delivering judgment on the matter on Monday, Justice Inyang Ekwo, held that the AGF failed to enter his defence in the suit, prompting the court to declare the plaintiff’s case “unchanged.”

Ekwo held that where a person issues a letter of demand on another person upon outstanding facts, the person for whom the demand notice was issued must take steps to react to same.

“Where the person to whom such demand notice is issued takes no steps, he is deemed to have admitted the claims thereby giving the other person the option of enforcing the claims by the available procedures for enforcement of undisputed claims. That is what has happened in this case,” the judge held.

The court affirmed further that the defendant (AGF) had admitted the claims of the Bayelsa State government in the process the former filed in reaction to the suit.

“I find no material upon which I can grant leave of this court for the defendant to enter a defence or transfer this matter to the general cause list.

“In that case, I also find that the case of the plaintiff remains not only challenged but admitted and therefore must succeed on the merit.

“Judgment is hereby entered on the claims of the plaintiff in this case. This is the order of this court,” Ekwo declared.

In the suit, the Bayelsa State Attorney General urged the court to make “an order directing the defendant (AGF) to pay the sum of $951,190.00 being the 13% derivative sum due as arrears of revenue and payable to Bayelsa State as assessed, completed and calculated by the Body set up by AGF pursuant to paragraph b (iii) (b) of the terms of the settlement made by the (consent) judgement of the Court by the Supreme Court in suit No: SC 964/2016 Attorney General of Rivers State and Others Vs Attorney General of the Federation on the 17th day of October 2018.

“10 percent post judgement interest at the court rate on the said sum of $951, 190, 840.00 (until final liquidation thereof,” among others.

The Akwa Ibom, Bayelsa and Rivers States government had sued the AGF at the Supreme Court, demanding an upward adjustment of the shares of revenues accruing to the Nigerian government whenever the price of crude oil exceeds $20 per barrel.

In the apex court verdict delivered in October 2018, Justice John Okoro, ordered the Nigerian government to embark on an upward adjustment of the shares of revenues accruing to the government whenever the price of crude oil exceeds $20 per barrel.

The three oil states in the Niger Delta: Rivers, Bayelsa and Akwa-Ibom, had approached the Supreme Court for interpretation of Section 16(1) of the Deep Offshore and Inland Basin Production Sharing Contract Act in suit number SC964/2016 filed on their behalf by their lead counsel, Lucius Nwosu, (SAN).

The particular section requires the Federal Government to adjust the shares of the revenue accruable to the federation, whenever the price of crude oil exceeds $20 per barrel.

According to the Bayelsa state government, the money had accrued from 2003 to 2017.