Enugu State dragged to court over non-payment of N10bn Paris Club refund consultation fee

ENUGU State government has been dragged to court by a consortium of consulting firms asking it to pay out the sum of N10.2bn ($26.72m) being the debt owed them regarding the Paris Club refund.

In the first such legal battle of its kind, Mauritz Walton Nigeria and Bizplus Consulting Services has asked a High Court of the Federal Capital Territory (FCT) to grant their application that the Enugu State government pays up. They claim the money represents 20% of the sum of N44. 4bn they helped the state recover from the federal government.

According to the claimants, the debt arose as a result of the defendants failure to pay the claimants the agreed 20% of N44.4bn and consultancy fees for their role in the federal government’s refund of excess deductions in the Paris Club loans.

Between 2002 and 2007, the Nigeria government, through its Federation Account Allocation Committee in concert with the 36 states, reconciled the external loans/debts and in the process, it was discovered that excess deductions under the first line charge were made to service foreign loans owed by the federal government and the states. Owing to the discrepancies, the Enugu State government, like some other states, engaged the services of the  companies to help reconcile and recover the money deducted as foreign loan facilities between 1992 and 2008.

Based on the agreement, the claimants said they went ahead to intensify engagement with the minister of finance and the Debt Management Office (DMO) wherein they were able to prove that the Enugu State government between June 1995 and March 2002 suffered excess deductions/debits regarding its external loans/debits repayment in the total sum of $142,034,156 which they therefore demanded to be refunded to the first defendants. According to claimants, their irrefutable case made to the Federal Ministry of Finance and the DMO as well as other relevant federal government agencies for the refund of the excess deductions led to the payment of the sum of N44.4bn to the Enugu State government.

According to the companies, the refusal by the state government to pay the consultancy fee as well as their disregard to several letters written by their lawyer demanding payment, led the claimants to institute the legal action. They thus demanded the sum of N400m as the cost for instituting the suit.