Ask Supreme Court to void Abrogation Act
ABUJA— BARELY six months after the Federal Government assented to the Bill abolishing the controversial onshore-offshore oil dichotomy in the application of the principle of derivation and allocation of revenue in the country, 22 states of the federation are now asking the Supreme Court to void the Act. Dragging the Federal Government and nine others to court are the 19 northern states of the federation and three southern states— Oyo, Osun and Ekiti.
The 19 northern states are Adamawa, Bauchi, Benue, Bornu, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi and Kogi states. The rest are Nasarawa, Niger, Plateau, Sokoto, Taraba, Yobe and Zamfara states. All of them are contending via their suit filed on their behalf by the Chambers of Yusuf Ali (SAN) that the Act grossly offended the provisions of the 1999 constitution and sundry ancillary laws of the land.
The aggrieved states also want the apex court to issue an order stopping forthwith the Revenue Mobilisation, Allocation and Fiscal Commission from implementing and relying on the Act for the purposes of allocating revenue to states and local governments from the Federation Account.
The Federal Government in 2001 approached the Supreme Court for pronouncement on what constitutes the seaward boundary of littoral states within the Federal Republic of Nigeria for the purposes of calculating the amount of revenue accruing to the Federation Account directly from any natural resources derived from the state pursuant to section 162 (2) of the 1999 constitution.
The suit with number SC28/2001 was filed by the then Federation Attorney-General, Chief Bola Ige (SAN),in response to the claims of the littoral states (Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Ogun, Ondo and Rivers) that the natural resources located offshore ought to be treated or regarded as located within their respective states. The apex court did pronounce on the issues brought before it on April 5, 2002 after considering legal submissions by both parties in the case, saying:
*that the seaward boundary of a littoral states for the purpose of calculating the amount of revenue accruing to the Federation Account directly from any natural resources derived from that state is the low-water mark of its land surface or the seaward limits of inland waters within the state as in the Cross River State with an archipelago of islands;
*that the contentions of the littoral states that their boundaries extend to the exclusive economic zone or the continental shelf of Nigeria is rejected;
lthat there is no provision anywhere in the 1999 Constitution which makes it possible for revenue derived from the continental shelf contiguous to a region to be payable to that region;
lthat the Federal Capital Territory is not a state or a local government in a state. It, therefore, cannot qualify for distribution of the Federation Account;
*that the exclusion by the Federal Government of natural gas as constituent of derivation is unconstitutional. Similarly so is funding of the judiciary as a first line charge on the Federation Account as well as servicing of external debts as first line on the Federation Account;
*that it is equally unconstitutional and against the grain of the 1999 Constitution for the Federal Government to refuse payment of the shares of Delta State in respect of proceeds from capital gains taxation and stamp duties; and
*that funding of joint venture contracts and the Nigerian National Petroleum Corporation (NNPC) priority projects as first line charge on the federation account is unconstitutional.
Co-terminous with the findings, the court restrained the Federal Government from further violating the constitution in the manner so listed.
Most lawyers in the case who assessed the judgment applauded it for recognising and upholding the laws of the country. To them, the pronouncement of the court on the matter was fair as they said there was no victor and no vanquished since the two opposing parties had issues resolved for and against them.
But in no short time, dissatisfactions started brewing among Nigerians especially from the littoral states following series of critiques to which the Supreme Court verdict was subjected to.
The dissatisfaction generated by the verdict made President Olusegun Obasanjo to promise a political solution to terminate the aftermath controversy. Attempting the political solution, President Obasanjo presented a bill, after the court’s verdict, to the National Assembly.
The bill was entitled: “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 the Matters Connected Therewith 2004.” The bill was passed by the National Assembly as “The Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act 2004” and President Obasanjo assented to it.
The Act though addressed the agitation of the littoral states on the application of the principle of 13 per cent derivation in the sharing of revenue accruing to the Federation Account from oil producing states, majority of the 36 states of the federation were also dissatisfied with the new legislation but kept their silence.
The aggrieved states which contained their discontent till August this year mobilised themselves and stormed the Supreme Court on August 6, this year to lodge an originating summons seeking to nullify the Act by the National Assembly giving legislative backing to the cancellation of the controversial onshore-offshore dichotomy. They asked for a reversal to the old order.
Establishing their locus standi to bring the action before the apex court, they said: “If the Act is implemented, it will impact negatively on the amount that will accrue to the Federation Account and this will in turn reduce the sharable revenue due to them,” hence the need to arrest its implementation.
Besides, they contended that the Act of the National Assembly amounted to a “legislative judgment” since the Act has by implication ceded part of the shore coastline and territorial waters of Nigeria to the littoral states. This alleged cession is said to be contrary to the provisions of the 1999 constitution, Territoral Waters Act Cap 428 LFN 1990 and the Exclusive Economic Zone Act Cap 110 LFN, 1990 which, they claimed, is to their disadvantage.
Named as defendants in the fresh legal battle over the derivation principle are the Federal Government, the eight littoral states and the Revenue Mobilisation, Allocation and Fiscal Commission.
None of them is yet to enter appearance in the case because the apex court itself is yet to empanel justices that will entertain the constitutional matter. The serving justices of the Supreme Court including the Chief Justice of the Federation, Justice Muhammad Lawal Uwais, are currently on their annual vacation Some of them are already outside the country and may not return until the beginning of new legal year which takes off September this year.
By implication, the suit is likely going to be one of the cases that will be attended to by the apex court in September when the vacation is over. Formulated for the Supreme Court’s determination when it resumes are five fundamental and constitutional questions including:
*whether having regard to the provisions of section 44(3) of the 1999 constitution, the provisions of the Territorial Water Act Cap 428, Laws of the Federation 1990, the provisions of the Exclusive Economic Zone Act, Cap 110, Laws of the Federation, 1990 and binding international conventions to which Nigeria is a signatory, the defendants could validly cede or give away or concede any part of the seaward boundaries of Nigeria to the littoral states in any manner whatsoever;
*whether in view of the provisions of sections 16 and 44(3) of the 1999 constitution, the provisions of the Territorial Waters Act Cap 428, LFN 1990 and the Exclusive Economic Zone Act Cap 110, LFN 1990, it was not ultra vires the powers of the Federal Government to make and implement the Allocation of Revenue (Abolition of Dichotomy in the Application of Derivation) Act 2004;
*whether having regard to the provisions of sections 4, 16, 44(3), 162 and 315 of the 1999 constitution, the Allocation of Revenue (Abolition of Dichotomy in the Application of Derivation) Act 2004 is not unconstitutional, ultra vires and null and void;
*whether in view of the provisions of sections 6(6), 232 and 235 of the 1999 constitution, the Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act 2004 is not unconstitutional, null, void and of no effect whatsoever and;
*whether in view of the decision of this honourable court in suit No SC\28\2001 Attorney-General of the Federation Vs the Attorney-General of Abia State and 35 others delivered on April 5, 2002, the Allocation of Revenue Act 2004 is not a legislative judgment thereby making it unconstitutional, null, void and without any effect.
Should all the questions be resolved in their favour, the plaintiffs want the court to grant them six major reliefs including:
*a declaration that the Allocation of Revenue Act 2004 is unconstitutional, ultra vires and a declaration that all the defendants are without constitutional powers to rely on the Allocation of Revenue Act 2004 for the purposes of allocation of revenue to the states and local governments from the Federation Account;
*an order directing the defendants to forthwith stop the implementation and reliance on the said Allocation of Revenue Act 2004;
*an injunction restraining the eight littoral states 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 Act 2004 ;
*an injunction restraining all the 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 Act 2004 and;
*an order setting aside, annulling and make void the said Revenue Allocation (Abolition of Dichotomy in the Application of the Principle of Derivation) Act 2004.
