The Nigerian government has filed suit aiming to invalidate over $418 million worth of promissory notes issued to contractors tied to Paris Club refunds for state and local governments.
The FG contends the notes were unlawfully charged to federal assets rather than state-level obligations. It petitioned the Federal High Court to void all 62 notes and bar recipients from exercising any rights over them.
Promissory notes valued at $419 million were provided last September to contractors engaged by the Governors Forum and Local Government Association for services rendered around Paris Club refunds.
But the FG argues the debts stemmed from state and local loans, so the notes are invalid assets against federal coffers per the constitution’s separation of assets. The government says it never contracted the companies in question.
Among major recipients targeted are Nigeria’s FSDH Merchant Bank, businessman Ned Nwoko, and Panic Alert Security Systems. The FG aims to undo the DMO’s issuance of the notes ordered by court judgments.
A judgement voiding the notes could force contractors to directly pursue compensation from state and local authorities instead. The high-stakes case centers on fiscal federalism and who bears responsibility for subnational obligations.