Energy

NLNG wins High Court case against NIMASA

Published

7 years ago

October 3, 2017

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By Chioma Obinagwam

The Federal High Court sitting in Lagos, on Tuesday, delivered judgment in favour of Nigeria LNG Limited (NLNG) in a case between the Company and the Nigerian Maritime Administration and Safety Agency (NIMASA) over applicability of NIMASA levies.

NIMASA had alleged that NLNG was liable to pay three percent gross freight on its international inbound and outbound cargo, Sea Protection Levy, two percent cabotage surcharge on all activities carried out for and on its behalf, as well as other sundry claims, all of which NLNG disputed.

In his judgment, Hon. Justice M.B. Idris held inter alia, that NLNG was not liable to make the said payments to NIMASA, and that all such payments already made by NLNG to NIMASA should be refunded to NLNG forthwith. Hon. Justice Idris further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG.

NLNG, in 2013, filed the case at the Federal High Court against NIMASA, seeking a judicial determination on, among other things, the legality or otherwise of the levies sought to be imposed on NLNG by NIMASA, and the consequent blockade of the Bonny Channel by NIMASA and its agents as a result of the dispute.

NLNG had also sought a Court Order restraining NIMASA from further blockade of the Channel. An Interim Injunction granted in favour of NLNG by the Federal High Court was disobeyed by NIMASA, which again effected a blockade of the Bonny Channel for over a three week period whilst the matter was pending, thereby preventing NLNG vessels and other vessels doing business with the Company, from entry and exit through the Channel.

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NIMASA had filed a Counterclaim restating its supposed entitlement to receive payment of the levies from NLNG. However, the Federal High Court judgement reinforces NLNG’s position that by the provisions of the applicable laws, the Company is not subject to payment to NIMASA of the three per cent gross freight as well as the Sea Protection Levy, and that the two per cent Cabotage Levy is inapplicable because NLNG’s LNG vessels are not involved in coastal trade or cabotage.

This decision also affirms the sanctity of the guarantees and assurances conferred on the Company and its Shareholders by the Government of the Federal Republic of Nigeria, on the strength of which the Shareholders made their investments from which the country has reaped immense returns.

NLNG as a law abiding company and a good corporate citizen remains committed to conducting its business in accordance with the laws of the Federal Republic of Nigeria.