Nigerian court decides in favor of NLNG in NIMASA dispute

Nigerian court decides in favor of NLNG in NIMASA dispute

The Federal High Court sitting in Lagos delivered judgment in favor of Nigeria LNG in the case between the company and Nigerian Maritime Administration and Safety Agency (NIMASA) over the applicability of NIMASA levies.

NIMASA had alleged that NLNG was 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, all of which NLNG disputed.

The court 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.  held that NIMASA was wrong in blockading the Bonny channel for the purpose of enforcing the payments against NLNG.

In addition, the court held that NIMASA was wrong in blockading the Bonny channel for the purpose of enforcing the payments against NLNG.

NLNG, in 2013, filed the case at the Federal High Court against NIMASA, seeking a judicial determination on, among other things, the legality or otherwise of the levies sought to be imposed on NLNG 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 favor of NLNG by the Federal High 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, thereby preventing NLNG vessels and other vessels doing business with NLNG, from entry and exit through the channel.

NIMASA had filed a counterclaim restating its supposed entitlement to receive payment of the levies from 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 percent gross freight as well as the Sea Protection Levy, and that the two percent Cabotage Levy is inapplicable because NLNG’s LNG vessels are not involved in coastal trade or cabotage.

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