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NLNG demands $315m judgement debt from NIMASA

By Udeme Akpan & Godwin Oritse

THE Management of Nigeria LNG has formally issued a demand notice for the sum of USD$315,598,823.29 judgment debt to the Nigerian Maritime Administration and Safety Agency (NIMASA).

The sum represents the payments made under protest to the Agency by NLNG since 2013, as well as direct and shipping losses incurred by NLNG due to the initial two-day blockade of the Bonny Channel by NIMASA in May 2013.

The development followed the decision on October 3, 2017 by the Federal High Court, Lagos 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 forthwith. The Court presided over by Justice M. B. Idris further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG.

Investment community

Commenting on the development, General Manager External Relations Dr Kudo Eresia-Eke said, ‘The Federal High Court ruling transcends being simply a legal victory for NLNG. It must be viewed for what it really is: A resounding message from Nigeria to the global investment community. The message is that we can be trusted to keep our sovereign word and that Nigeria remains open for business, partnership and investments.”

NIMASA had alleged that NLNG was liable to pay three percent gross freight levy on its international inbound and outbound cargo, Sea Protection Levy, two percent cabotage surcharge as well as other sundry claims, all of which NLNG disputed. 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 agent 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 blockaded the Bonny Channel over a three week period while the matter was pending, thereby preventing NLNG vessels and other vessels doing business with the Company from entry and exit through the Channel.

The Federal High Court sitting in Lago had, held that Nigerian Liquefied Natural Gas, NLNG, was not 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, as insisted by Nigerian Maritime Administration and Safety Agency, NIMASA. NLNG had sued NIMASA over the applicability of the levies on it.

NLNG in 2013, had gone to court, seeking a judicial determination of among other things, the legality or otherwise of the levies sought to be imposed on it 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 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.

NIMASA had filed a counterclaim, restating its supposed entitlement to receive payment of the levies from NLNG.

But the court by its judgment reinforces NLNG’s position that by the provisions of the applicable laws, the company was not subject to payment to NIMASA of the three percent gross freight as well as the Sea Protection Levy   and that the two percent Cabotage Levy is inapplicable because NLNG’s vessels are not involved in coastal trade or cabotage. Meanwhile, Director General of NIMASA, Dr Dakuku Peterside, has expressed the agency’s dissatisfaction with the judgment, hinting of the management’s intention to appeal same.


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