The United States District Court for the District of Columbia has granted a motion to dismiss an attempt by a Nigerian businessman to enforce a $159 million payment agreement against the Federal Republic of Nigeria with regard to the Paris Club refund.
In a copy of the judgment, delivered on 12 March and seen by PREMIUM TIMES, Colleen Kollar-Kotelly, the presiding judge, noted that the court, like two other district courts before it, lacks subject matter jurisdiction over the claims by Ted Iseghohi Edwards and his assignees.
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The judge, therefore, granted the motion to dismiss the claims, as requested by the defendants – Nigeria and various Nigerian governmental entities.
The Agreement
The agreement pertained to the 10 per cent legal fee payable to Mr Edwards for providing legal representation to hundreds of local government councils in Nigeria in a lawsuit against the Federal Republic of Nigeria. The fee was chargeable for any recovery.
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“Dr. Edwards struggled to collect his fees in Nigeria. So, in April 2018, Dr. Edwards brought a “Foreign Judgment Enforcement Suit” in the District of Massachusetts against Nigeria. But the district court dismissed his action in May 2018 for lack of subject matter jurisdiction and failure to state a claim,” the court document stated.
Mr Edwards initiated a legal action in the District of Massachusetts against Nigeria and various Nigerian governmental entities, but had his action dismissed by the court, which noted that all the defendants were immune from suit under the Foreign Sovereign Immunities Act (FSIA).
Following negotiations with the Federal Republic of Nigeria, he reached an agreement regarding payment, whereby Nigeria agreed to issue him ten promissory notes, each in the sum of $15.9 million, for a total sum of $159 million.
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The sum was the fee he demanded for providing consultancy services to the Association of Local Governments of Nigeria to secure the Paris Club refund.
In September 2021, Nigeria’s Debt Management Office (DMO) issued the promissory notes in favour of Mr Edwards on behalf of the Federal Republic of Nigeria. The notes were scheduled to mature individually on a yearly basis over a decade, with the first note maturing on 15 October 2022.
They were “backed by the full faith and credit of the Federal Government of Nigeria,” “charged upon the general assets of Nigeria,” and “governed by the Laws of the Federal Republic of Nigeria.”
The terms required the notes to be presented to the Central Bank of Nigeria for payment. Mr Edwards assigned the notes to Boston Legal Partners, Inc., a Massachusetts corporation.
The plaintiffs received no payment on the first promissory note. In its response to a demand letter for payment from the counsel to the plaintiffs in Nigeria, the DMO said it was “awaiting directives from the authorities and will revert to you as may be appropriate.”
The plaintiffs had yet to receive payment as of the time they filed the latest suit, according to the court document.
In September 2023, the Nigerian government asked a Federal High Court in Abuja to void the promissory notes issued to consultants in respect of the Paris Club refund. It noted that the notes, which included the $159 million in favour of Mr Edwards, were invalid and inappropriately issued in breach of relevant laws.
“The promissory notes in issue were wrongly and unlawfully charged on the assets and revenues of the federation instead of the assets and revenues of the states and local governments, who incurred the applicable loans/debts,” Oyinlade Koleosho, a principal state counsel in Nigeria’s federal ministry of justice, noted in a supporting affidavit.
He argued that, given that the consultants were not engaged by the federal government, there was no valid consideration for the promissory notes issued to them.
Payment enforcement suit
Mr Edwards and Boston Legal Partners filed a suit against Nigeria, Nigeria’s attorney general and minister of justice and the DMO at the US District Court for the District of Columbia in April 2023. The plaintiffs requested payment of the first promissory note and immediately sought summary judgment, but the court denied the motion as premature, considering that the defendants had yet to be served.
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The defendants were eventually served, and they moved to dismiss the plaintiff’s complaint.
According to the defendants, the court lacks jurisdiction over all defendants under FSIA and also lacks personal jurisdiction over Nigeria’s attorney general and minister of justice.
The FSIA, the court remarked, provides foreign states and their agencies or instrumentalities with “presumptive immunity from suit in the United States.” “Unless a specified exception applies,” a federal court lacks subject-matter jurisdiction over a claim against a foreign state or its agency or instrumentality, it noted.
It ruled that the defendants are presumed to be immune from suit in the US under the FSIA.
The judge stated that the plaintiffs have not shown that the defendants’ failure to fulfil the first promissory note “caused a direct effect in the United States.”
He added that the “mere fact” that the promissory notes are to be paid out in dollars “does not show that the notes ‘necessarily contemplate’ performance in the United States — the US dollar is a commonly used currency the world over.”
“Accordingly, because Defendants’ alleged violation of the Promissory Note did not have a direct effect on the United States, the Court does not have subject matter jurisdiction under the FSIA’s commercial activity exception,” the judge said.
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