The ECOWAS Court of Justice has ordered the government of Cross River State to repay the sum of US$6,455,846 to the ECOWAS Bank for Investment and Development (EBID).
In its ruling on Friday, the court also ordered the Nigerian State government to pay an interest of 6.5 per cent per annum on the amount starting from 31 August, 201.
It said that the repayment accrued from an outstanding loan granted the government in 2005.
Delivering judgment in a suit brought by the bank, an arm of ECOWAS, Justice Edward Amoako Asante, said the “sum represents the situation of the Tinapa Free Zone Project loan in the Applicant’s book as at 31 August 2018.
He asked the government of Cross River to submit to the Court within two months a report on its measures to implement the Court’s orders relating to the loan with which the government financed the Tinapa business resort.
Although the Court granted most of the reliefs sought by the Applicant, it declined the Applicant’s claim for immediate execution of the Irrevocable Standing Payment Order (ISPO).
The ISPO is a loan condition precedent mandating the Accountant General of the Federal Republic of Nigeria tagged “Guarantee” in Clause 7.05 of the loan agreement to satisfy the indebtedness.
The Court also refused to grant the Applicant’s claim for solicitor’s fees on the ground that it was not backed by documentary evidence.
The Applicant EBID had filed suit no ECW/CCJ/APP/14/19 on 2nd April, 2019 urging the Court to declare its Loan Agreement No 7/AP/LAR/FRDF/04/05 with Cross River State Government (CRSG) as valid, binding and subsisting between the parties.
The applicant also urged the court to declare the Respondent as having failed to fulfil a loan condition precedent and compel the Respondent to repay the loan with interest.
The Applicant had alleged that despite several demands, the Respondent refused and/or neglected to repay the loan with duration period of seven (7) years after a two-year moratorium.
The Respondent, the Government of the Cross River State of the Federal Republic of Nigeria, admitted it approached EBID, an investment and development bank, to part finance its TINAPA business and resort project.
It further admitted that both parties signed a loan agreement on May 20, 2005 for a sum of UA6, 525,371 equivalent of US$10,000,000.
The Respondent claimed it made repayments until 2010 when it defaulted due to an administrative issue and that the repayment schedule for the outstanding payment was restructured to run from 7 January 2010 to 1 January 2020.
But the Court noted that the Respondent defaulted on its repayment schedules.