Attorney General Of Adamawa State & Ors. V. Attorney General Of The Federation & Ors (2005)

LAWGLOBAL HUB Lead Judgment Report

UWAIS, C.J.N. 

This suit was commenced by an originating summons, supported by an affidavit filed on behalf of all the plaintiffs by their counsel. The following reliefs, which have been stated in the originating summons are being sought by the plaintiffs: –

1. Declaration that the Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004 is unconstitutional,ultra vires the defendants and therefore null and void.
2. Declaration that the 1st and 10th defendants are without constitutional powers to rely on the Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004 for the purposes of allocation of revenue to the states and local governments from the Federation Account.
3. Order directing the defendants to forthwith stop the implementation and reliance on the said Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004.
4. Injunction restraining the 2nd – 9th defendants by themselves, their agents, or any other person or persons deriving authority through them from taking benefit from, insisting on or in any other manner seek to take advantage from or under or in the said Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004.
5. Injunction restraining the 1st and 10th defendants by themselves, their agents, servants, privies or any other person or body deriving authority from or through them from implementing, giving effect to or in any other manner enforce the provisions of the Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004.
6. Order setting aside, annulling and make void the said Revenue Allocation (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004
7. Any other relief or other reliefs as the Honourable Court may find the plaintiff entitled to in law and equity.”

Conflicting affidavits

In paragraphs 6,7,8,9, 10 and 11 of the affidavit in support of the originating summons, it is averred as follows:-

“6. That I know as a fact that hitherto, the amount accruing to the Federation account included monies realized from the on-shore and off-shore exploration of crude oil by oil companies operating in Nigeria.

7. That I know as a fact that the President of the Federal Republic of Nigeria presented a Bill to the National Assembly titled “An Act to Abolish the Dichotomy in the application of the Principle of Derivation for the Purpose of Allocation of Revenue Accruing to the Federation Account and for Matters connected therewith 2004” to the National Assembly which passed same and the President had since accented to it and it is now “The Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004″,

(hereinafter referred to as the Act).

8. That I know as a fact from the briefing given to my principal by the plaintiffs that the Act once implemented will impact negatively on the amount that will accrue to the Federation Account and this will in turn reduce the shareable revenue due to the plaintiffs.
9. That I know as a fact that the said Act has by implication ceded part of the shore coastline of Nigeria to the 2nd – 9th defendants.
10. That I know as a fact that the Act also has the effect of granting part of the territorial waters of Nigeria to the 2nd-9th defendants to the disadvantage of the plaintiffs.
11. That I know as a fact that the Act as it is if implemented will work to the disadvantage of the plaintiffs.”

Counter-affidavits to the affidavit in support of the originating summons were filed by the 2nd, 4th, 7th and 9th defendants respectively. That of the 2nd defendant avers in paragraphs 5 to 18 as follows:-

“5 That when the President of the Federal Republic of Nigeria presented a Bill title (sic) “An Act to Abolish the Dichotomy in the Application of the Principle of Derivation for the Purpose of Allocation of Revenue Accruing to the Federation Account and for Matters Connected therewith 2004,” to the National Assembly it was a matter of great public discussion, views and great interest throughout Nigeria and beyond.

6. That both Houses of the National Assembly deliberated openly and extensively on the Bill before the same was passed by the two Houses of the National Assembly as the “Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004.”
7. That throughout this period and throughout the long processes and procedure leading to the passage and enactment of the Act none of the plaintiffs raised a finger or voice in protest or made any reservation whatsoever.
8. That all the 36 states making up the Federal Republic of Nigeria have elected representatives in the National Assembly whose responsibility it is to initiate Bills, to take part in debates, to criticize or take any position on all Bills presented before the National Assembly and to participate in the passage or rejection of such Bills.
9. That all the representatives of the plaintiff states took part in the deliberations leading to the passage of the Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Bill 2004.
10. That neither the representatives of the 22 plaintiff states in the National Assembly nor the Attorneys-General of those states warned or advised or admonished the President of the Federal Republic to refrain from giving his assent to the Bill when it was finally presented for his assent.
11. That our leading counsel in this case A. Ekong Bassey, Esq. (SAN) informed me and I verily believe him that the plaintiffs’ action is an attempt to unlawfully interfere with the law making process of the National Assembly.
12. That our leading counsel in this case A. Ekong Bassey, Esq, (SAN) has also advised and I verily believe that it is wrong for the 22 plaintiff states having given support to the passage of Bill through their accredited representatives in parliament (National Assembly) to now turn round through their Attorney-General to challenge the validity of an Act which they had fully supported and sanctioned.
13. That in answer to Paragraph 8 of the plantiffs’ affidavit,the 2nd defendant states that the Act has already been fully implemented.
14. That paragraph 9 of the plaintiffs’ affidavit is totally false; the Act has not either directly or by implication ceded any “part of the shore coastline of Nigeria to the 2nd -9th defendants.”
15. That paragraph 10 of the plaintiffs’ affidavit is false and accordingly denied the Act has not in any way “granted part of the territorial waters of Nigeria to the 2nd-9th defendants.”
16. That paragraph 11 of the plaintiffs’ affidavit being false is accordingly denied; it is not true that “the Act. .. if implemented will work to the disadvantage of the plaintiffs,” indeed, the Act has already been implemented to the knowledge of the plaintiffs.”

In paragraphs 5-14 of his counter-affidavit, the 4th defendant avers thus:-

“5. That paragraph 6 of the plaintiffs’ affidavit in support of their originating summons is not correct and in answer thereto the 4th defendant avers that monies accruing to the Federation Account still include and continue to include monies realized from onshore and offshore exploration of crude oil in Nigeria.

6. That paragraph 7 of the plaintiffs’ affidavit in support of their originating summons is admitted.
7. That paragraph 8 of the plaintiffs’ affidavit in support is false; and in answer thereto the 4th defendant contends that the Act abolishes the onshore/offshore dichotomy that hitherto prevailed in computing revenue due to the oil producing states under the principle of derivation as enshrined in the Constitution of the Federal Republic of Nigeria, 1999.
8. That in further answer to paragraph 8 of the plaintiffs’ affidavit in support, the 4th defendant contends that the Act will not impact negatively on the amount accruing to the Federation Account; all monies derived from oil and gas exploration and production both onshore and offshore are payable into the Federation Account before any payouts or deductions are effected thereto.
9. That still in answer to said paragraph 8 of the plaintiffs’ affidavit in support, the 4th defendant contends that all revenues accruing to the Federation having first been paid into the Federation Account, payouts and deductions therefrom are made in accordance with law, and in accordance with the revenue allocation formula tabled before the President by the 10th defendant who then presents same to the National Assembly for enactment into law.
10. That paragraph 9 of the plaintiffs’ affidavit in support is false and misleading; and in answer thereto, the 4th defendant contends that the implication of the Act is that natural resources including crude oil derived from the waters and subsoil contiguous to the coastline or seawards limits of inland waters of an oil producing littoral state and extending to the 200 meter water depth (isobaths) is deemed part of the state for the purpose of computing revenue accruing to that state under the principle of derivation.
11. That in further answer to paragraph 9 of the plaintiffs’ affidavit in support, the 4th defendant contends that ownership of all natural resources derived offshore are vested and continue to be vested in the Federal Government of Nigeria in accordance with all relevant laws.
12. That paragraph 10 of the plaintiffs’ affidavit in support is false and misleading; and in answer thereto the 4th defendant states that no part of the territorial waters of Nigeria is granted to the defendants. Natural resources derived from the territorial waters contiguous to a littoral state are deemed to be derived from that state for purposes of computing revenue due to the state under the principle of derivation.
13. That in answer to paragraph 11 of the plaintiffs’ affidavit in support, the 4th defendant contends that the plaintiffs will suffer no disadvantage occasioned by the implementation of the Act.
14. That in further answer thereto, the 4th defendant contends that the Act is in accord with all relevant international and municipal legislation and conventions upon which the 4th defendant shall rely at the hearing of this suit.”

The 7th defendant avers in paragraphs 5-11 of his counter affidavit –

“5. That the legislators from the plaintiffs’ states constitute the majority in the National Assembly.

6. That I know as a fact that the Act in question was extensively debated before it was passed.
7. That the people in the plaintiffs’ states for whose benefit the plaintiffs’ share of the money in the Federation Account are meant have through their representatives in the National Assembly participated in the enactment of the Act in question.
8. That contrary to paragraph 9 of the affidavit in support, the Act in question has neither directly nor indirectly ceded any part of the shore coastline of Nigeria to the 7th defendant.
9. That contrary to paragraph 10 of the affidavit in support, the Act in question has not in anyway granted any part of the territorial waters of Nigeria to the 7th defendant.
10. That the 7th defendant played no role in the enactment of the Act in question.
11. That I know as a fact that it is the 10th defendant that has the power to implement the Act in question.”

While the 9th defendant avers in paragraphs 5-16 of his counter-affidavit as follows:-

“5. That the 9th defendant admits paragraph 6 of the plaintiff’s affidavit in support of their summons filed on the 5th day of November, 2004.