FAAN/Maevis: Impunity, (Il)legality and PPPs!

I have restrained myself from commenting on the FAAN-Maevis controversy until I considered myself fully seised of the facts. You recall that on Saturday March 24, 2012, officials of FAAN forcefully and physically took over the part of the Murtala Muhammed International Airport occupied by MAEVIS and violently ejected its workers from the premises. FAAN proceeded to take over MAEVIS equipment and transferred operations of some or all of the facilities and services provided by MAEVIS to Societe International De Telecommunication Aeronautiques (SITA). It is incontrovertible that FAAN and Maevis entered into an agreement dated October 31, 2007 covering “acquisition, installation, operation and management of Airport Operations Management System (AOMS), Airport Operation Database (AODB), Common User Terminal Equipment (CUTE), Computer-Based Departure Control System Platform, Common User Self Service (CUSS) Kiosk, a fully automated Airport Pricing and Billing System (PBS), a proactive Revenue Management System and an electronic payment Gateway System incorporating a Transparent Electronic Funds Transfer and Settlement System at the Airports…”. That agreement provides that “FAAN shall provide adequate space and power supply to MAEVIS free of all encumbrances and cost for the Data Centre at the airport”. The agreement also provides in Articles 5 and 7 that FAAN will pay MAEVIS 2% of current revenue and 35% of “additional revenue generated and collected above FAAN’s current revenue generation”. I have also seen correspondences emanating from FAAN in which it acknowledged existence of MAEVIS’ court action and recognised the need to “maintain the res in view of the present court action instituted by MAEVIS against the Authority” (letter dated October 22, 2010 from FAAN to MAEVIS); another addressed to MAEVIS’ bankers in which FAAN affirmed that “all issues relating to the Commission and Enhancement fees payable to MAEVIS Limited under the FAAN-MAEVIS AOMS agreement has been fully resolved”. In this letter, FAAN went ahead to confirm that “The Honourable Minister of Aviation has directed that in line with Federal Government’s commitment to the rule of law and smooth operation of this project, the deduction and payment of the 2% commission and 35% Enhancement fees due to MAEVIS Limited shall be implemented” (letter dated July 31, 2009 from FAAN CEO and Director of Finance and Accounts to Zenith Bank and MAEVIS Ltd). There are also two letters from the Honourable Attorney-General and Minister for Justice, dated April 21 and May 24, 2011 in which the AGF advised FAAN to stay action on the termination of MAEVIS agreement in view of the directive of the Federal High Court on both parties to submit their dispute to arbitration in line with their agreement, as well as the intervention of the Infrastructure Concession and Regulatory Commission (ICRC). On its part, the ICRC an agency of government has confirmed the existence and validity of the Concession Agreement between FAAN and MAEVIS, expressed concern over FAAN’s actions and promised to take up the matter with FAAN. As the Courts, the AGF and ICRC have all acknowledged, the proper course of action for a law-abiding legal entity (especially one that is a government agency) was to refer any dispute between the parties to arbitration as provided in Article 15 of the agreement signed by the parties which provided first for mutual consultation and then arbitration. I have seen evidence that MAEVIS duly filed a notice of arbitration to FAAN and appointed its party-nominated arbitrator (a notable SAN) as far back as January 20, 2011 to which FAAN inexplicably refused to respond! Finally there is documentary evidence of several rulings of various Federal High Courts that “the Res is to be preserved” (Justice B. F. M Nyako-24/9/10); directing that “parties herein should go to Arbitration as provided for by Article 15 of their Agreement” (Nyako-17/12/10); re-emphasizing the order on parties to proceed to arbitration (Nyako-19/5/11); and an order restraining SITA and Government from entering or implementing any agreement that interferes with the rights of MAEVIS under its agreement with FAAN (Justice A. M Liman-21/3/12). It is amazing, indeed shocking that in the face of all the above, SITA, FAAN and the Minister of Aviation have acted with the level of arrogance, impunity and total disregard for the law in the manner they did on March 24 and subsequently. Given this behaviour of FAAN, will any sensible investor of any credibility or worth enter into a public-private partnership with any agency of the Government of Nigeria? A country in which an agency of government, prodded by its supervising Minister can ignore the country’s Attorney-General, its Courts and the institution responsible for regulating PPPs is not one in which sane people will be prepared to enter into agreements with governments, least of all agreements requiring such a person to invest funds ahead of reaping expected returns. If it is true as I have seen in some newspaper reports that the Minister may have in fact disobeyed the President of the Federal Republic in proceeding to throw MAEVIS out of the airport, then our descent into a banana republic is complete!