LEGAL PRINCIPLE: CONSTITUTIONAL LAW — State Creation — Succession to Assets and Liabilities — Liability for Projects Vests in State of Location
PRINCIPLE STATEMENT
Under the guideline on sharing of assets and liabilities between states, projects sited in each state vest in the state where the project is situate. That state bears responsibility for meeting outstanding liability on such project.
RATIO DECIDENDI (SOURCE)
Per Oguntade, JSC, in A.G., Plateau State v. A.G., Nasarawa State (2005) NLC-2552000(SC) at p. 7; Paras B–D.
"I declare that by the guideline on the sharing of assets and liabilities as between the plaintiff and the defendant, the projects sited in each of the two States vest in the State where the project is situate; and that it is the State in which a project is situate that bears responsibility for meeting the outstanding liability on such project."
EXPLANATION / SCOPE
Upon state creation, assets and liabilities follow project location. The state where a project is physically located assumes ownership and liability. The principle applies to constitutional law and state succession. The rule provides clear allocation formula to avoid disputes. The state of location cannot disclaim responsibility for projects within its territory. This applies to both completed and ongoing projects.
