Nigeria's Supreme Court has unanimously dismissed a suit filed by the 36 state governments and the Nigeria Governors' Forum (NGF) challenging the federal government's application of recovered looted funds estimated at N1.8 trillion.

In its judgment delivered on Friday, a seven-member panel of the apex court held that the plaintiffs wrongly invoked the Supreme Court's jurisdiction, stating that the subject matter of the suit falls within the jurisdiction of the Federal High Court.

The lead judgment, prepared by Justice Chidiebere Uwa but read by Justice Mohammed Idris, determined that the case marked SC/CV/395/2021 was improperly instituted before the Supreme Court.

According to court documents, the states had claimed that between 2015 and 2021, the federal government secured both international and local forfeiture, recovery, and repatriation of stolen assets valued at approximately N1,836,906,543,658.73. These recoveries also included about 167 properties, 450 cars, 300 trucks and cargoes, and 20,000,000 barrels of crude oil worth over N450 million.

The plaintiffs alleged that instead of remitting these recovered funds into the Federation Account as required by the Constitution, the federal government illegally diverted them into the Consolidated Revenue Accounts (CRA) and other accounts not recognized by the Nigerian Constitution.

In their argument, the states maintained that the CRA is designated for the federal government's share from the Federation Account and other federal earnings, not for funds that should benefit all tiers of government. They contended that by establishing separate Asset Recovery and Interim Forfeiture Recovery Accounts for recovered assets, the federal government contradicted constitutional provisions.

The states cited Sections 162(1), 162(10), and 80 of the Constitution, as well as Section 2 of the Finance (Control and Management) Act of 1958, arguing that recovered funds qualify as revenue that should be paid into the Federation Account rather than the federal government's Consolidated Revenue Account.

"It is unconstitutional to remit or divert revenue payable into the Federation Account to the Consolidated Revenue Account of the Federal Government or any other account whatsoever, or to apply the said revenue to any other purpose," the plaintiffs had argued.

Among other prayers, the states had asked the court to issue an order compelling the remittance of the N1.8 trillion in cash and N450 billion in non-cash recovered assets into the Federation Account for the collective benefit of federal, state, and local governments.

They also sought an order requiring the federal government, through the Revenue Mobilisation and Fiscal Commission (RMFAC), to design modalities for distributing the recovered assets among the federating units.

However, with the Supreme Court's ruling on jurisdictional grounds, the substantive issues raised by the states remain unaddressed, leaving open the possibility of the case being refiled at the Federal High Court.