Nigeria Dismisses Businessman's $159 Million Paris Club Debt Claim

The U.S. District Court for the District of Columbia has granted a motion to dismiss a Nigerian businessman’s request to enforce a $159 million payment agreement related to the Paris Club refund against the Federal Republic of Nigeria.

On March 12, presiding Judge Colleen Kollar-Kotelly issued the ruling, stating that the court, similar to two previous courts, lacks subject matter jurisdiction over the claims raised by Ted Iseghohi Edwards and his assignees.

As a result, the claims were dismissed according to the defendants—Nigeria and several Nigerian government entities.

The contested agreement regarded a 10 percent legal fee owed to Mr. Edwards for his legal representation of numerous local government councils in Nigeria filing a lawsuit against the federal government. This fee only applies upon the successful recovery of funds.

“Dr. Edwards faced challenges collecting his fees in Nigeria. Thus, in April 2018, he initiated a Foreign Judgment Enforcement Suit in the District of Massachusetts against Nigeria. However, this action was dismissed in May 2018 due to lack of subject matter jurisdiction as well as failure to substantiate his claims,” the court documents disclosed.

Mr. Edwards pursued legal action in the District of Massachusetts against Nigeria and associated government bodies, but his suit was dismissed because all defendants were recognized as immune from litigation under the Foreign Sovereign Immunities Act (FSIA).

After negotiations with Nigeria, an agreement was reached involving the issuance of ten promissory notes amounting to $15.9 million each for a total of $159 million. This sum represented the fee Edward claimed for consulting services rendered to the Association of Local Governments of Nigeria to secure the Paris Club refund.

In September 2021, Nigeria’s Debt Management Office (DMO) issued these promissory notes in favor of Mr. Edwards, with individual maturities scheduled annually over the next decade, commencing with the first note due on October 15, 2022. These notes were guaranteed by the full faith and credit of Nigeria’s government and were intended to be repaid through the Central Bank of Nigeria.

Mr. Edwards assigned his rights to the promissory notes to Boston Legal Partners, Inc., a company based in Massachusetts. However, as of the time of filing the latest suit, the plaintiffs had not received any payment on the first promissory note. Nigeria’s DMO responded to the plaintiffs’ demand for payment by stating it was “awaiting directives from the authorities and will revert as appropriate.”

In September 2023, the Nigerian government filed a motion with a Federal High Court in Abuja to invalidate the promissory notes issued to consultants for the Paris Club refund, asserting that these notes, including the $159 million owed to Mr. Edwards, were invalid due to improper issuance against legal protocols.

Oyinlade Koleosho, a principal state counsel at Nigeria’s justice ministry, argued in an affidavit that the promissory notes had unlawfully encumbered the nation’s assets, while asserting that the consultants lacked engagement by the federal government, rendering the notes without legitimate consideration.

Following this dispute, Mr. Edwards and Boston Legal Partners filed suit against Nigeria, its attorney general, and the DMO in April 2023. They sought payment of the first promissory note and requested summary judgment, but the court denied this request as it deemed it premature since the defendants had not been effectively served.

Once served, the defendants sought to dismiss the plaintiffs' complaints, arguing that the court could not exercise jurisdiction under the FSIA, which confers presumptive immunity upon foreign states against legal actions in the U.S. unless specific exceptions apply.

The court reiterated that the defendants were presumed to be immune under FSIA regulations. Furthermore, it noted the plaintiffs did not demonstrate that the defendants’ inaction regarding the promissory note had a direct impact in the U.S., clarifying that the mere use of U.S. dollars for repayment does not imply necessary performance within the United States.

The judge concluded that the alleged violations of the promissory note did not exert a direct effect within U.S. jurisdiction, thus reaffirming the court’s lack of subject matter jurisdiction under the FSIA’s commercial activity exemption.