Levies: NLNG wins court case, NIMASA set to appeal

Levies: NLNG wins court case, NIMASA set to appealThe Federal High Court in Lagos on Tuesday delivered judgment in favour of the Nigeria LNG Limited in a case about the levies imposed on it by the Nigerian Maritime Administration and Safety Agency.

The NLNG said in a statement that NIMASA had alleged that the company was liable to pay three per cent gross freight on its international inbound and outbound cargoes, Sea Protection Levy, two per cent cabotage surcharge on all activities carried out for and on its behalf, as well as other sundry claims, all of  which the NLNG disputed.

In his judgment, Justice Mohammed Idris held, inter alia, that the NLNG was not liable to make the said payments to NIMASA, and that all such payments already made to the agency should be refunded to the NLNG forthwith.

Justice Idris further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payment against the NLNG.

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

The NLNG had also sought a court order restraining NIMASA from further blockade of the channel.

According to the statement, an interim injunction granted in favour of the NLNG by the Federal High Court was disobeyed by NIMASA, which again effected a blockade of the Bonny Channel for over three weeks while the matter was pending, thereby preventing the NLNG vessels and other vessels doing business with the company from entering and exiting through the channel.

It said NIMASA had filed a counterclaim restating its supposed entitlement to receive payment of the levies from the 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 the NLNG’s LNG vessels are not involved in coastal trade or cabotage,” the General Manager, External Relations, NLNG, Kudo Eresia-Eke, said.

He added that the decision also affirmed the sanctity of the guarantees and assurances conferred on the company and its shareholders by the Federal Government, on the strength of which the shareholders made their investments from which the country had reaped immense returns.

In his reaction, the Director-General, NIMASA, Dr. Dakuku Peterside, expressed the agency’s dissatisfaction with the judgment, saying it would appeal it.

He said the agency’s legal team was waiting for the certified true copy of the judgment for it to study and respond as appropriate.

According to NIMASA, the NLNG was not exempted from payments of statutory levies after its tax holiday ended many years ago.

Citing Section 2 (1) of NIMASA Act, Peterside said in a statement,  “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).’

“The honourable court had in 2013 ruled on the agreement by both parties, which stipulated that NLNG would pay outstanding levies and also to continue to pay all applicable levies in line with the NIMASA mandate.”


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