NLNG Sues NIMASA over disputed levies

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high_court_lagos_federalThe Nigeria Liquefied Natural Gas (LNG) Limited (NLNG) Tuesday dragged the Nigerian Maritime Administration and Safety Agency (NIMASA) to a Federal High Court in Lagos, seeking judicial clarity and interpretation on the legality or otherwise of the various levies imposed on it by the maritime regulator.

This is coming as the NLNG said it was complying, under protest, with the federal government’s directive to pay the said levies to NIMASA. THISDAY gathered from sources within NIMASA that the disputed levies amounted to N32.8billion as at 2010 when NIMASA initially dragged NLNG to court to compel it to pay.

Confirming this development, NLNG’s General Manager in charge of External Relations, Mr. Kudo Eresia-Eke, said in a statement yesterday that the protracted dispute between both parties arose as a result of perceived conflict in the enabling Acts of both organisations.

He identified the Acts to include the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act on one hand and NIMASA Act, Merchant Shipping Act and Coastal and Inland Shipping Act on the other hand. He stated that NIMASA had contended that its levies were applicable to NLNG, while the latter argued that they were exempted from such levies and charges by virtue of the NLNG Act.

“NIMASA had filed a suit against NLNG in 2010 claiming entitlement to these levies. After preliminary proceedings were taken and concluded, and the matter was ready for hearing, NIMASA filed an application to withdraw the suit, and on May 3, 2013 resorted to self-help by blocking the Bonny Channel for two days, thereby preventing ingress and egress of NLNG chartered vessels with attendant financial losses and reputational damage to NLNG and Nigeria in general,” he said.

According to him, following this blockade incident, a series of meetings were subsequently directed by the federal government in the past few weeks resulting in the instruction to NLNG to pay the NIMASA levies.

He said NLNG had thus commenced installment payment, under protest, tob NIMASA in compliance to the government’s directive, but without prejudice to its right to seek judicial interpretation in the court of law.

“It is instructive to note that Nigeria LNG Limited and its shareholders still firmly believe in the rectitude of their earlier position that NLNG is duly protected by the provisions of the NLNG Act against the payment to NIMASA of the Sea Protection Levy, the three per cent freight levies on cargo exports shipped by NLNG, and that the two per cent Cabotage Levy on LNG carriers is inapplicable because NLNG’s LNG vessels are not involved in coastal trade or cabotage,” the statement added.

Eresia-Eke contended that the NLNG is a “Nigerian company involved in, almost exclusively, international export business and is thus subject to all relevant national and international laws, standards and ethos with which it must comply.” This, he said, requires that all its dealings are governed and premised on the universal principles of the rule of law to which the federal government also affirms its commitment.

“The company has often clarified that the issues it has with payment of any levy, charge or impost has little to do with the amounts involved, but more with the principle of the rule of law, so that it can safeguard its international business which rests squarely on its reputation as a law abiding company, as well as Nigeria’s reputation in the global community,” he said.

Nigeria LNG is owned by four shareholders, namely, the Nigerian National Petroleum Corporation, (NNPC) (49 per cent); Shell Gas BV, SGBV (25.6 per cent); Total LNG Nigeria Limited (15per cent); and Eni International (N.A,) N. V. S. a. r. l (10.4 per cent).

 

Information from ThisDay was used in this report.