LG Funds: Federal High Court Rejects Governors Request To Block NFIU Guidelines

BY AMOS DUNIA, ABUJA – A Federal High Court 2, Abuja presided over by Justice Tsoho on Monday declined the plea by a counsel to the Nigeria Governors’ Forum (NGF) to restraint the Nigerian Financial Intelligence Unit (NFIU) from implementing the guidelines on Local Government Funds pending the determination of the suit.

Justice Tsoho in suit No. FHC/Abj/CS/563/19, while declining the request of the NGF, said that since it is a constitutional matter, he will not bother with interlocutory injunctions.

The refusal by Justice Tsoho, gave the governors of the 36 states a serious blow in their bid to stop the implementation of the guidelines issued by the Nigerian Financial Intelligence Unit (NFIU), directing banks not to allow transactions in States/Local Government Joint Accounts but that such accounts should only be used to distribute allocations to accounts of local governments directly. 

The governors, under the auspices of the Nigeria Governors Forum (NGF), sued the NFIU challenging the legality of the guidelines.

The matter which came up on Tuesday, it could not go on due to the absence of the lead Counsel to the NGF, Lateef Fagbemi, SAN, who was at the Presidential Election Petitions Tribunal.

Fagbemi had initially applied for a stand down to 11:30am to enable him be in court to argue on the matter and was obliged. But by 11:48 am, when the matter was called up again, another lawyer holding brief for him applied for another 30mins stand down saying that his principal was still busy at the Court of Appeal.

But Arthur Obi-Okafor SAN, leading Prof. Deji Adekunle SAN for the NFIU, told the Court that they had shown good faith by waiting for the Plaintiffs Counsel till 11:30am with no guarantee he will be through at the Court of Appeal if the matter is stood down for another 30 minutes. 

Obi-Okafor further told the Court that they are already challenging the jurisdiction of the court to hear the matter which has been served on all the parties.

The lawyer holding brief for Mr Fagbemi SAN for the Plaintiffs while not opposing an adjournment, had earlier urged the Court to restrain the NFIU from proceeding with the enforcement of the Guidelines which the court declined to grant. 

The Court thereafter adjourned the matter to October 23, 2019 to hear all pending applications

The NFIU had on May 6, 2019 issued ‘Guidelines to Reduce Vulnerabilities Created by Cash Withdrawals from Local Government Funds throughout Nigeria,’ which stopped governors from tampering with funds meant for Local Government Councils.

The guidelines took effect from June 1, 2019.