N7trn Compensation To Spark Legal War Between NSC And Shippers

By Kenneth Jukpor

 

·  Shippers fear CDF will be inaccessible like CVFF

·  Court judgment directed N7trn payment into CDF – NSC

A legal battle between the Nigerian Shippers’ Council (NSC) and Nigerian shippers is set to commence as both parties are at loggerheads over the utilization of the proposed N7trillion refund by terminal operators as directed by the courts.

While the legal suit is pending before the Supreme Court after the Court of Appeal has upheld the N7trillion compensation judgment by the Federal High Court, the Executive Secretary of NSC, Hon. Emmanuel Jime recently revealed that the fund will be utilized as seed capital for Cargo Defense Fund (CDF).

Jime’s position was disclosed during a recent parley with the League of Maritime Editors and Publishers (LOMEP), however, shippers have described the move as autocratic and unilateral as they alleged that the NSC boss didn’t consult shippers.

Shippers under the aegis of Shippers Association of Lagos State (SALS) not only frowned at the decision but threatened to commence legal actions against NSC if left out of the arrangement to invest the N7trillion in CDF.

While MMS Plus findings showed that the initial court judgment had directed that the money be paid into CDF, shippers argue that the former CDF is defunct and NSC’s move to refloat the organization may usher in a new arrangement.

Speaking with our correspondent, the President of SALS, Rev. Jonathan Nicol said, “The money in CDF has been spent by NSC and now there is no money in the purse. The Cabotage Vessel Finance Fund (CVFF) is a good example of what may happen with CDF if NSC takes ownership of the money. CVFF is the contribution of ship owners that have turned around to become the government’s fund. This might become the story of the N7trillion that the courts have asked terminal operators to pay to shippers.”

“The NSC has said that it plans to utilize that money to refloat CDF but they didn’t consult anyone. It’s a decision they are taking unilaterally and it is such absence of stakeholder’s engagement that led to the recent port crisis with the introduction of Vehicle Identification Number (VIN) valuation system. The Shippers’ Council is trying to corner this money but we will say no. I’m not trying to fight them but I expect them to understand that I spent my money in this legal battle and I need to be compensated. That’s the ideal thing to do and it will be terrible if we find ourselves in court over that N7trillion.”

Speaking further, he opined that it is strange for the Shippers Council to take a decision on funds that don’t belong to it.

“When the court asked for the shippers and I stood up. I represented shippers and even though we advertised severally for shippers to join us, no one joined us. We became the lead agency and the group identified as shippers; now there is a semblance of money coming in and we find NSC planning to channel it to CDF without our knowledge. How can the Executive Secretary be making such pronouncements to the media without initially discussing the idea with shippers? It appears NSC has taken a decision for shippers without consulting shippers,” he added.

According to Nicol, the establishment of a new CDF shouldn’t be driven by NSC but shippers, even as he argued that the decision isn’t entirely a bad one but the fact that it was taken without the consultation of shippers was an indication that NSC sees the fund as government property.

When contacted, the Director of Consumer Affairs, Chief Cajetan Agu was surprised by the shippers’ claims, arguing that the court judgment specifically directed that the money be paid into CDF.

“Has this money been paid? We are still in court. It’s important to note what the court said in the judgment. The court judgment said that money should be paid into the Cargo Defense Fund of NSC. It was very specific,” Agu said.

Recently, the NSC Executive Secretary, Hon. Jime said; “We are trying to reorganize the structure of CDF. When I came in, I understood that the shipping community didn’t participate in the structuring of CDF. Shippers weren’t contributing even though it was to be a contributory fund for shippers. NSC was taking the initiative to run this CDF but it limited the success of the fund.”

“My predecessor had put in place a mechanism to see that after the court proceedings, some of the fund could be used to start the implementation of CDF but NSC can’t continue to sponsor it. We must push the sensitization for shippers to know that this has to be a contributory fund.”

The Cargo Defence Fund, also known as The Fund, is an initiative of NSC. It is a company limited by guarantee set up as a Cargo Protection & Indemnity (Cargo P & I) scheme. It was established to mitigate losses incurred by shippers, especially small time importers and exporters, who may not have the financial muscle to pursue their legitimate maritime claims.

The Fund is a mutual scheme to provide cover for particular risks as agreed upon by members, focus is on Nigerian importers and exporters. It became operational in 2001 and is managed and administered by a Board of Trustees representing major interest groups and stakeholders.

Services provided by CDF include: Legal / Technical Advice, Payment of Risk Management Services, Foreign Legal Representation, Cover for Specific Risks as Agreed, Quality Information Services, General Risk, Management Advice, Convene Alternative Dispute Resolution Forum, Claims Procedure, among others.

Meanwhile, our correspondent observed that there is a deepening rift between NSC and SALS as the shippers are unsatisfied with the Council’s responses to their plights.

According to SALS, NSC’s role of an umpire and a mediator with regards to fiscal concerns at Nigerian ports has been a major distraction that has seen the agency pay less attention to its initial mandate of protecting the interest of shippers.

The SALS spokesman, Dr. Kayode Farinto made this claim while addressing journalists recently.

While he appreciated the germane role of NSC as the port economic regulator, he observed that the added responsibility of port economic regulation has seen the agency tilt towards some stakeholders in the sector at the expense of shippers.

“I’m one of the apostles that believes that NSC should be the port economic regulator, if you look at the Establishing Act of NSC you will see that it is primarily saddled with the responsibility of protecting shippers. Now that there is an added responsibility of being an economic regulator, the agency has to be fair while addressing various concerns in the sector; perhaps that’s why the Shippers’ Council is tilting towards one-sided,” Farinto said.

The SALS spokesman expressed dissatisfaction in NSC’s handling of crucial issues affecting shippers, especially those brought forward by SALS, noting that the association has decided to vacate its second-floor accommodation at the Council’s corporate headquarters over ill-treatment and NSC’s failure to protect cargo owners.

According to him, the shippers’ association perceives that if it is no longer housed under the NSC accommodation arrangement, the pleas and complaints of the group would be listened to.

He, however, stated that SALS would collaborate with the national body of shippers to monitor the Cargo Defence Fund (CDF) which presently has its bill before the National Assembly.

Observers of the trend have challenged shippers to come  up with an alternative solution by proposing how the 7trillion naira could be disbursed equitably among them according to their contributions over the years if their confidence in CDF has been eroded.

Meanwhile, sources at the Council claim that NSC has provided accommodation for SALS for over 20 years for gratis, wondering why a notice of temporary relocation from a floor to another floor on account of office renovation could generate such a flame of anger and bitterness against a benefactor of many years.