Ziklagsis Network Limited, a metering company, has sued the federal government and others over the termination of a metering contract and withdrawal of about N39.1 billion meant for its execution, deposited at Providus Bank.
In the suit, the company claimed that it was being unfairly targeted despite its compliance with the contractual agreements.
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The plaintiff, through its lawyer, Wole Olanipekun, a Senior Advocate of Nigeria (SAN), filed the suit on 5 November 2024, seeking N1.1 billion in damages and the cost of filing the suit against the defendants.
The defendants are the federal government, the Federal Ministry of Power, the Minister of Power, the Debt Management Office, Providus Bank Ltd, and De-Haryor Global Services Limited.
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Ziklagsis alleged that the defendants’ actions have jeopardised its ability to execute the metering project as agreed.
Alleged violations
Ziklagsis contended that the Federal Ministry of Power and the federal government violated key provisions of the Judgement Compromise Agreement (JCA) entered on 28 August 2017 at the end of an initial legal tussle over the project.
Citing Articles 3, 4, 5, 6, 10, 18, 24, and 29 of the JCA, the company claimed that the ministry had no authority to confiscate, withhold, or divert the N39.1 billion loan granted to it for the provision of electric meters in Nigeria.
The company attributed its inability to meet contractual deadlines to disruptions caused by the COVID-19 pandemic.
It also accused the defendants of calculated attempts to frustrate its efforts to fulfil the terms of the Revalidated Tripartite Agreement, claiming the actions are in “utter bad faith.”
The company further said De-Haryor Global Services Limited (the 6th defendant), with whom it entered into a Metering Consortium Project Agreement as part of the Nigerian Army’s metering project, failed to meet its contractual agreement, which breached the contract’s terms.
Ziklagsis also alleged that the 2nd defendant, the Federal Ministry of Power, colluded with De-Haryor to withdraw N7.5 billion earmarked for the project from its own account without its knowledge or consent.
“Rather than ensuring compliance, the 2nd defendant colluded with the 6th defendant to misappropriate the funds and frustrate the execution of the project,” Ziklagsis’ affidavit stated.
Unreleased funds
Ziklagsis argued that the federal government and the Ministry of Power refused to release the funds needed for the project, despite receiving presidential approval.
It further alleged that the funds were instead mismanaged, preventing the deployment of free pre-paid meters to Nigerian households, as intended.
“However, despite the presidential approval and compliance on the part of the plaintiff, the project was once again frustrated by the defendants by the willful refusal of the 2nd defendant to release the funds as agreed for the execution of the project.
“All efforts by the plaintiff to get the 2nd defendant to release the money for the execution of the project proved abortive. Rather, the defendants attempted to abrogate and divert the contract and money for the project to some other persons or institutions.
“The plaintiff proactively instituted a civil action at the Federal High Court, Abuja Division, to prevent and stop the 1st to 4th defendants from diverting the contract and the money to some other persons and/or institutions in Suit No: FHC/ABJ/CS/442/2018 between Ziklagsis Networks Limited v. Federal Government of Nigeria & 4 Ors,” the company’s affidavit filed in support of the suit stated.
Defence
In their joint defence, the federal government and the Minister of Power maintained that they paid N39.1 billion to Ziklagsis for the execution of the metering project.
But it said Ziklagsis deposited the money in a fixed deposit account at Providus Bank instead of utilising it for the project.
The defendants argued that their actions to terminate the contract and recover the funds complied with the terms of the JCA, specifically Article 5(d), which provided Ziklagsis with a two-year moratorium to supply electric meters.
Counter-claims from Providus Bank and De-Haryor
Providus Bank, represented by Adesegun Ajibola also SAN, refuted Ziklagsis’ claims in a counter-affidavit on 13 August 2024.
The bank argued that Ziklagsis’ affidavit contained falsehoods and half-truths because it was merely a fixed deposit account customer seeking higher interest rates.
The bank stated it issued a payment guarantee to the Ministry of Power in February 2020 based on Ziklagsis’ directives.
The bank said that it is not a party to the original contract but maintains a banking relationship with Ziklagsis.
It explained that Ziklagsis, the Nigerian Army, and De-Haryor Global Services Ltd entered into a Power Metering Consortium Agreement in September 2023, which allocated part of the funds for the Nigerian Army Power Metering Project.
Providus Bank stated that, with Ziklagsis’ consent, it issued payment guarantees totalling N12.76 billion and transferred part of the contract sum to De-Haryor Global Services Ltd as agreed.
Also, the bank urged the court to dismiss Ziklagsis’ suit because it was filed in bad faith and posed a risk to national security due to delays in installing prepaid meters in military barracks.
Similarly, De-Haryor Global Services Limited, an electricity installation company and interested party in the case, also filed a counter-affidavit and described the lawsuit as baseless.
According to its lawyer, Marcus Abu, the company was introduced to Ziklagsis by the Nigerian Army to facilitate a N7.5 billion loan for the barracks metering project.
In the affidavit, De-Haryor claimed it was successfully delivered on phase one of the project but noted that Ziklagsis failed to supply any meters since August 2017.
The company noted that Ziklagsis deposited the contract funds into a fixed deposit account instead of utilising them for the metering project.
“By the provision of Article 5(d) of the JCA, the plaintiff (Ziklagsis) was given two years of moratorium within which to supply or provide electric meters in Nigeria according to the JCA.
“The federal government and the Ministry of Power fulfilled their obligations under the contract by disbursing over N39bn to the plaintiff. However, Ziklagsis’ actions indicate an intention not to utilize the funds for the project,” Mr Abu said.
The company called for the court to declare the contract discharged due to Ziklagsis’ breach.
The bank, where Ziklagsis was accused of depositing argued that Ziklagsis’ affidavit contained falsehoods and half-truths because it was merely a fixed deposit account customer seeking higher interest rates.
The bank stated it was unaware of the specific terms of Ziklagsis’ agreement with the federal government.
Also, De-Haryor Global Services Limited, an electricity installation company, engaged as successor to Ziklagsis to execute the project, filed a counter-affidavit, describing the lawsuit as baseless.
De-Haryor said that it had been introduced to Ziklagsis by the Nigerian Army to facilitate a N7.5 billion loan for the barracks metering project.
According to its lawyer, Marcus Abu, Ziklagsis failed to perform its obligations under the contract.
The company noted that Ziklagsis deposited the contract funds into a fixed deposit account instead of utilising them for the metering project.
“By the provision of Article 5(d) of the JCA, the plaintiff (Ziklagsis) was given two years of moratorium within which to supply or provide electric meters in Nigeria according to the JCA.
“Meanwhile, the plaintiff (Ziklagsis) did not invest any funds in the performance of the same but the 1st and 3rd defendants (federal government and Minister of Power) had already given the sum of over N39 billion to the plaintiff for the execution of the metering project. Rather than perform its obligation under the contract, the plaintiff deposited the said sum in a fixed deposit.
“My lord, the mere fact that the 1st and 3rd defendants (federal government and Minister of Power) had already paid the contract sum to the plaintiff (Ziklagsis) shows that the defendants have performed their obligations under the said contract.
“On the other hand, the plaintiff depositing the contract sum in a fixed deposit account is a clear indication that it had no intention to utilise the contract sum for the project intended by the JCA. Rather than declaring estoppel against the defendants as prayed in relief 1, the court should declare that the contract is already discharged by the plaintiff’s breach,” Mr Abu stated.
De-Haryor, who had delivered on phase one of the barracks metering project for the Nigerian Army, further alleged that Ziklagsis had not supplied a single meter despite receiving approval and funds.
It added that the moratorium granted to Ziklagsis for project execution had long expired.
De-Haryor argued further in its filing that Ziklagsis’ reliance on COVID-19 as an excuse is unfounded, noting that the pandemic did not last the entirety of 2020.
The company called for the court to declare the contract discharged due to Ziklagsis’ breach.
The case has been assigned to a trial judge, James Omotosho, who has scheduled a hearing for 4 February 2025.
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