Court Declares NIMASA Levies On NLNG Illegal
A Federal High Court sitting in Lagos, Tuesday, 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. Meanwhile, NIMASA has said it will appeal the judgment.
In his judgment, Justice Mohammed Idris held 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. Justice Idris further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG.
NLNG in 2013, went 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.
In a statement by the Head of Corporate Communications of NIMASA, Isichei Osamgbi, he noted that “The agency’s legal team are waiting for the certified true copy of the judgment for the agency to respond as appropriate.”
However, former Managing Director and Chief Executive Officer, NLNG, Mr Bobs Omotowa has hailed the judgment, saying that the court was right in its opposition against illegal levies by NIMASA in 2013.
In a statement in Port Harcourt, Rivers State, Mr Omotowa described the judgment as a victory for Nigeria and the rule of law, adding that the court decision was a rejection of what he called arbitrariness and illegality.
He further said, “Section 2 (1) of NIMASA Act states that “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) of NIMASA 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.
The court had in 2013 ruled on the agreement by both parties which stipulated that NLNG will pay outstanding levies and also to continue to pay all applicable levies in line with the NIMASA mandate,” he maintained.
