The United States District Court for the District of Columbia has dismissed a Nigerian businessman’s effort to enforce a $159 million payment agreement against the Federal Republic of Nigeria related to Paris Club refunds. Presiding Judge Colleen Kollar-Kotelly issued the ruling on March 12, affirming that, as with two previous district court decisions, the court lacks subject matter jurisdiction over the claims presented by Ted Isegohhi Edwards and his legal team.
The court granted the motion to dismiss the claims, responding to requests from Nigeria and several Nigerian government agencies. The agreement in question stipulated a 10% legal fee to be paid to Edwards for representing numerous local government councils in Nigeria in litigation against the federal government, with additional costs for restoration.
Background of the Agreement
In April 2018, Edwards faced challenges recovering his legal costs in Nigeria and subsequently filed a ‘Foreign Judgment Enforcement Action’ against Nigeria in the District of Massachusetts. However, that suit was dismissed the following month due to a lack of subject matter jurisdiction and insufficient grounds for the claim, according to court documents. A second attempt in Massachusetts also met a similar fate, as all defendants were deemed immune from litigation under the Foreign Sovereign Immunities Act (FSIA).
Following negotiations, Edwards reached a payment agreement with the Nigerian government, which consisted of 10 promissory notes, each valued at $15.9 million, culminating in the total sum of $159 million. This amount was intended as compensation for consulting services provided to the Local Government Association of Nigeria to facilitate Paris Club reimbursements.
In September 2021, the Nigerian Debt Management Office (DMO) issued a promissory note in favor of Edwards, on behalf of the Federal Republic of Nigeria. These notes are set to mature annually over ten years, with the first maturing on October 15, 2022. The promissory notes are described as being “backed by the full faith and credit of the Federal Government of Nigeria,” subject to the general assets of the country and governed by Nigerian law.
Developments in Payment and Legal Actions
Despite the issuance of the promissory notes, plaintiffs did not receive payment on the initial note. In response to a demand letter from Edwards, the DMO indicated it was “awaiting instructions from the authorities and will issue refunds as appropriate.” As of the time of filing the latest lawsuit, the plaintiffs had yet to receive any payments.
In September 2023, the Nigerian government requested the Federal High Court in Abuja to nullify the promissory note issued to Edwards relating to the Paris Club refunds, claiming it was improperly issued and invalid according to legal statutes. Oyinlade Koleosho, Chief State Counsel at the Federal Ministry of Justice of Nigeria, asserted that the promissory notes had been unlawfully charged against the assets of the Federation, rather than against the appropriate state and local government assets that had incurred the debts.
The Ongoing Litigation
In April 2023, Edwards and Boston Legal Partners filed a lawsuit in the United States District Court for the District of Columbia against Nigeria and several officials, including the Attorney General and the Minister of Justice. They sought payment of the first promissory note and requested immediate summary judgment. However, the court deemed the motion premature since the defendants had not yet been served.
Once the defendants were served, they sought to dismiss the complaint, arguing that the court lacked jurisdiction under the FSIA. The court reiterated that foreign states and their agencies have constructive immunity from litigation in the United States, and federal courts lack jurisdiction over claims against them unless specific exceptions apply.
In its ruling, the court established that the defendants are presumed immune under the FSIA. The judge noted that the plaintiffs had not sufficiently demonstrated that the defendants’ failure to honor the original promissory note had a direct impact on the United States. The court emphasized that the mere fact that the note is payable in U.S. dollars does not automatically link it to performance within the U.S. legal framework. Thus, the court concluded that it lacks subject matter jurisdiction under the FSIA’s commercial activity exception.
