Foreign Loans, Agreements And Need For Caution

News report last week showed that at least, 33 properties owned by the Federal Government in the United Kingdom have been identified and at risk of being forfeited due to litigation damages awarded to an energy firm, Eurafic Power Limited, by a London Court of International Arbitration which was endorsed by a UK High Court.

Also recently, the country is locked in a legal battle against another company known as P&ID, which is not resting on its oars in attempt to seize $9bn (about N4.5trn) Nigerian assets located anywhere in the world. This is as controversy arose over Sovereignty Clause noticed to have been inserted in loan agreements signed with the Peoples Republic of China and companies in that country, over loans tied to contracts awarded to Chinese companies handling especially railway and other mega-billion Naira projects in the country.

In a case with number CL-2017-000781, a UK High Court ordered the payment of $2.51m, £225, 949.19 and N57.9m (a combined N1.12bn based on the current Central Bank of Nigeria’s exchange rate).

According to information available to The AUTHORITY, this current legal tussle emanated from a contract entered into by the Federal Government and Eurafric Power Limited in February 2013, over a share sale agreement with the Bureau of Public Enterprise (BPE) and the Federal Ministry of Finance, both acting on behalf of the Federal Government.
The purchase of Sapele Power Plc, owners of Sapele Power Station at the cost of $201m, is at the center of this legal tussle. The agreement with the National Council on Privatisation led to the issue of Share Certificate 0001 to Eurafric Power Limited on February 10, 2014, approving the sale of the Federal Government’s equity in Sapele Power Plc. The Certificate of Handover, No 0002 showed that all assets, liabilities, employees, rights and obligations of the Power Holding Company of Nigeria were handed to Sapele Power Plc, now owned by Eurafric Power Limited.

But after the handover Federal Government and the Niger Delta Power Holding Company began arrangements to transfer a substantial portion of the premises already sold to Eurafric Power Limited to one Ogorode Power Generation Company, claiming that the portion it transferred did not form part of the sold assets.

The firm therefore commenced arbitration in the UK in line with the agreement signed by the parties. A tribunal comprising a former Attorney-General of Pakistan, Makhdoom Ali Khan as Chairman; a retired Nigerian Supreme Court Judge, Justice Samson Uwaifo, and a former Attorney-General of the Federation (AGF), Chief Bayo Ojo (SAN) as co-arbitrators. On September 28, 2017, the arbitral tribunal ruled in favour of Eurafric Power Limited. In addition, a UK High Court presided over by Justice Popple Well subsequently recognised the award as a court judgment. He decided that: “The defendants are jointly and severally ordered and directed to pay to the claimant the following amounts: $2,500,000 as legal costs; £215,930.60, as an advance paid on costs and N57.9m, £10,018.50 and $11,158.33 as disbursements. All other claims and counter claims are dismissed.”

As at the moment, Eurafric Power Limited is insisting that the Federal Government honour the court judgment and pay immediately. On October 23, last year, they wrote through its lawyer, Godwin Obla (SAN), saying it had identified 33 properties belonging to Nigeria in the UK which were not being used for diplomatic purposes, that it would liquidate to recover the awarded damages.

The P&ID case, the Chinese loan agreements and several other issues identified as tardy raises cause for serious concern. Nigerians have been wondering how top government officials would simply enter into an agreement, mislead government into not honouring such agreements and land the country into big trouble.

It is true that government is battling to extricate the country from all these legal tango, but, this will cost huge sums of money in addition to the damage, bad image and hardship already inflicted on the country by those contracts not going on as agreed.
The AUTHORITY is wondering why the officials, who got the country into such a mess, were never asked to account. It is also another wonder that the legal officers who put the country into such mess are also left out of untangling the mess they tied. All these are similar to issues of fighting anti-corruption without linking the accountants and auditors who certified hitherto corrupt activities while attempting to puncture such corrupt acts.

And we ask: Is it possible for money to be stolen from public treasury without the involvement of accountants and auditors? Why then does Nigeria chase shadows by arresting only political office holders, whereas there are professional collaborators in such acts of corruption?

Now that it is clear, without any iota of doubt, that some Nigerians perpetrate heist, especially on issues of contract with foreign companies, foreign loans or financial deals, why have we refused, as the adage says, wash our eyes clearly with soap and water, figure out why these keep recurring and plug it with finality. It has been observed that hardly would there be any contract with foreign interest that does not end up a huge fraud.

If such keeps happening always and all the time in the same and similar manner, just like our security agencies and the fight against insecurity, then it means there are basic truths we are not telling ourselves. For us to overcome our current economic and developmental challenges, there is no running around in circles; we need to make a complete U-turn and do only what is right. Any other thing to the contrary is a ruse and can only continue to drag us backward. The AUTHORITY believes we have moved in the reverse gear for too long. Can’t we wake up and take the right path?

Related Posts

Leave a Comment

This News Site uses cookies to improve reading experience. We assume this is OK but if not, please do opt-out. Accept Read More