- Nigerians are to cough up N26.5bn fine incurred by an overreaching Federal Govt
The arbitration award, asking the Federal Government of Nigeria to pay Resort International Limited the sum of N26.5 billion for breach of contractual obligations underscores the defects in some of the laws guiding relationship between the Federal Government and the states. The award arose following the inability of the Federal Government to secure a no-objection status from the Lagos State government, which rightly claims a reversionary interest in the old Federal Secretariat, Ikoyi, Lagos, which the Federal Government unilaterally handed over to the company to develop into residential quarters.
The dispute underlines the distortions and challenges inherent in the provisions of the Land Use Act, and the foggy but touted overriding interests of the Federal Government, in a matter that should exclusively fall within the purview of state legislation. While the private firm should be entitled to the sanctity of a contract duly consummated, albeit by an unthinking Federal Government, our common purse is now compelled to shell out a humongous N26.5 billion because of that lack of foresight by some officials who think of the Federal Government more as a leviathan.
True to type, the Lagos State Government, in line with its robust constitutional activism, particularly since 1999, proactively intervened to ensure that a land appropriated by federal authorities for public use cannot be turned to private use, without considering the interest of Lagos State which constitutionally bears responsibility for the physical and environmental impact of that decision. The state government’s argument that it is indeed entitled to a reversionary right or interest where the Federal Government which took the place to develop a secretariat no longer needs the land for such a purpose, also makes sense.
The fine of N26.5 billion ordered from our common patrimony, painful as it is, is a pointer, as in many other cases, that our laws have not made enough demarcation between the rights and privileges of the Federal Government and the states. This is even more instructive with respect to the ownership of land, since the promulgation of the Land Use Act. The tension between the Federal Government and the states also plays out between communities and states, with each interest fighting over the exercise of rights of ownership over land, which the Land Use Act vests in the governors of the states.
In our view, the Federal Government’s officials, in seeking to convert the former Federal Secretariat to a residential apartment through a partnership agreement with a private firm, without putting the interest of the state in view, manifested a gross abuse of its powers and privileges. No doubt, the actors were hoping to ride rough shod over the legal and equitable interests of the state government, expose her to physical planning nightmares and unplanned expenditure for the provision of infrastructure for the new residents. The import will be that while the Federal Government and its partner, Resort International Limited are smiling to the bank, Lagos State government will be agonising on how to raise the resources to meet the imposed challenges.
Even though an award has been made, we ask, was legal due diligence conducted by the parties before the contract was consummated? If that was done, we believe it would have exposed the limits of the powers of the Federal Government to unilaterally convert a land appropriated for a public purpose to private use, without factoring in the interest of the host state. Now that an award has been made, it will be fair to ask the Federal Government to exhaustively explore all the available legal opportunities to overturn the award, and if it loses, to pay.
