The Nigerian Ports Authority (NPA) has revoked the agreement it had with Lagos Deep Offshore Logistics Base (LADOL) after accusing the company of breaching the agreement.
LADOL has, however, hit back at the NPA, stating the cancellation of the contract was illegal.
The controversial contract was a land lease agreement for 121 hectares of land near the Light House Beach, Tarkwa Bay, Lagos. The port authority said LADOL made certain decisions that contravened its agreement.
According to a report, LADOL was prohibited from subletting any part of the property, but the company went ahead to sublet a portion of the land. NPA discovered during an investigation that without approval, LADOL had executed a sublease dated September 13, 2013 with Messrs SHI-MCI Fze (representing Samsung Heavy Industries Nigeria).
This prompted NPA to draw the attention of LADOL’s parent company, Global Resources Management Limited, stating in a letter signed by the agency’s General Manager, Land and Asset Administration, Yusuf Ahmed, that, “Clause 4.5 (a) of the agreement which prohibits the lessee (LADOL) from subletting any part of the premises without a written approval of the Lessor (NPA).”
It was disclosed that such decision is a breach of contract and “shall result in the automatic cancellation of this lease.” The letter further stated that the company’s “actions in that regard led to the current impasse with resultant negative attention within and outside the country. Consequently, the authority has reviewed the events and decided to exercise its rights under the lease and hereby revokes it with immediate effect.”
LADOL was also said to have sublet part of the land to an American company called Africoat Nigeria Limited.
Apart from the accusation of breaching contract, NPA also alleged that LADOL had been holding back on its payment to the Federal Government, as the company was paying less than it collected on rent.
NPA intervened in order to protect SHIN’s fabrication and integration yard. It was reported that $270 million had been borrowed to build and restore investors’ confidence.
The company said the decision by NPA to revoke their agreement was illegal and wrong. LADOL also described it as unconstitutional and should be null and void.
In a bid to fight the contract cancellation, LADOL and Global Resources Management Limited have listed Samsung Heavy Industries Nigeria, the Nigerian Export Processing Zones Authority, Oil and Gas Export Free Zone Authority and SHI-MCI Free Zone Enterprise as defendants after filing a lawsuit.