Channel Blockade: LNG Demands $315.6m Refund From NIMASA

Channel Blockade: LNG Demands $315.6m Refund From NIMASA

Nigerian  Liquefied Natural Gas (NLNG) has raised a strong letter  to Nigerian Maritime Administration and Safety Agency (NIMASA) demanding the payments of about $315.6 million debt made under protest to the agency since 2013.

In the letter, NLNG said that the sum represents  direct and shipping losses incurred by NLNG due to the initial 22-day blockade of the Bonny Channel NIMASA in May 2013.

The General Manager, External Relation of, NLNG, Mr Kudo Eresia-Eke, who read the letter to newsmen in Lagos, last week, also said  that the court ruling was more than an ordinary victory for NLNG, it was a message  from Nigeria to the global investment community.

“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 investment” he said.

However, NIMASA had alleged that NLNG was liable to pay three per cent gross freight levy on its international inbound and outbound cargo;  sea protection levy; two per cent cabotage surcharge as well as other sundry claims, all of which NLNG disputed.

Consequently,  NLNG in 2013,  filed a case at the Federal High Court, Lagos against NIMASA, seeking a judicial determination on, among other things, the legality or otherwise of the Bonny Channel by NIMASA and its agent as a result of the dispute.

NLNG 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.

After a four-year legal battle, the Federal High Court, resolved the case in favour of NLNG.

So, in   his judgment, Honourable  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. Idris further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against 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.

Although, the issue took place four years ago under a different management of NIMASA, the present administration has threatened to challenge the judgement in the appellate court.

In a statement, Head, Corporate Communications of NIMASA, Mr Isichei Osamgbi said that the Director General Of NIMASA, Dr Dakuku Peterside has expressed his  dissatisfaction with the judgment and vowed  to appeal the judgment. He noted that the agency’s legal team are waiting for the certified true copy of the judgment which will be  studied  and responded to  as   appropriate.

Citing some relevant sections that backed up its mandate, Osamgbi said:  “Section 2 (1) of NIMASA Act states: “This Act shall apply to ships, small ships and crafts registered in Nigeria and extended to ships, small ships and crafts flying a foreign flag in the exclusive economic zone, territorial and inland seas, inland waterways and in the ports of the Federal Republic of Nigeria”. The only vessels exempted from levies under the NIMASA Act are “…warships and military patrol ships”. (Section 2 (2).

NIMASA, he said,  has portfolios of statutory revenues that it collects from shipping companies/ship operators, manning agents and seafarers.

“This,  the agency pays into the coffers of the government. It is within these funds generated that the agency uses to develop and police the maritime sector. NIMASA does not receive any government allocations” he said.


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