In a landmark judgment delivered on 16 January 2026, the Supreme Court of Nigeria has ruled decisively in favour of Nigeria Liquefied Natural Gas Limited (NLNG) in its protracted legal battle with the Nigerian Maritime Administration and Safety Agency (NIMASA), ordering the maritime regulator to refund more than $150 million collected from NLNG in levies the court held were unlawful.
SHIPS & PORTS reports that the levies — comprising a 3 per cent gross freight charge on international cargo, the Sea Protection Levy and a 2 per cent cabotage surcharge under the Coastal and Inland Shipping Act — were found by the apex court to have been imposed without lawful basis.
The ruling resolves one of the most significant corporate regulatory disputes in Nigeria’s maritime and energy sectors, with major implications for statutory incentives and regulatory reach.
The judgment, handed down by the Supreme Court, upheld NLNG’s long-standing position that it was exempt from the contested charges under its enabling legislation — the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act — and that amounts collected by NIMASA must be returned with interest.
The decision, SHIPS & PORTS reports, also affirmed that NIMASA’s enforcement actions in pursuit of the levies were improper. NLNG’s legal team, drawn from Babalakin & Co., was led by Olawale Akoni, SAN, and included senior partners Tola Oshobi, SAN, Boonyameen Babajide Lawal, SAN, ‘Seun Awonuga, SAN, Kehinde Daodu and Muhammad Abdulmumin. NIMASA’s legal team was led by Mike Igbokwe, SAN.
The dispute dates back more than a decade. In 2013, NIMASA began demanding that NLNG pay statutory maritime levies — including the 3 per cent freight charge on inbound and outbound LNG cargoes, the Sea Protection Levy and a cabotage surcharge — asserting authority under the NIMASA Act, Cabotage Act and related regulations.
Many of these demands were based on the premise that NLNG’s vessels and operations should contribute to funding maritime safety and infrastructure. NLNG countered that its own statutory incentives and assurances, enshrined in the NLNG Act, exempted it from such imposts and that any attempt to impose them was contrary to the binding guarantees given when the LNG project was established.
The dispute escalated dramatically when NIMASA, in enforcement of its demands, blockaded the Bonny Channel in the Niger Delta — the main seaward route for NLNG’s export carriers — preventing LNG shipments from leaving for international markets. That blockade, which at times lasted for weeks, crippled parts of NLNG’s export operations and was a central grievance in NLNG’s legal challenges.
NLNG took the matter to the Federal High Court, Lagos, where in October 2017 the court ruled in its favour, holding that the company was not liable to pay the levies and that all payments previously made to NIMASA should be refunded. The High Court also condemned NIMASA’s blockade of the Bonny Channel as an improper enforcement measure.
NIMASA appealed that decision, and in March 2019 the Court of Appeal, Lagos Division set aside the Federal High Court judgment on procedural grounds, specifically the issue of whether NIMASA had been given fair hearing, and ordered a retrial before a different High Court judge. The appellate court’s ruling restored the legal contest and renewed uncertainty over the levies’ application.
After years of litigation and procedural twists, the matter finally reached the Supreme Court. In its 16 January 2026 ruling, the apex court affirmed that NLNG’s statutory incentives and assurances override the general levy provisions that NIMASA sought to impose, and that the agency’s collection of these charges from NLNG was unlawful.
The court’s verdict requires NIMASA to refund more than $150 million and other money collected over the years, a sum reflecting the contested gross freight, sea protection and cabotage charges, and represents a major financial and reputational setback for the agency.
The ruling underscores the supremacy of specific statutory incentives granted to cornerstone energy projects, and limits the regulatory reach of agencies when those agencies’ actions conflict with express legislative guarantees.
It also sends a clear message about the enforceability of legislative assurances in Nigeria’s investment climate. Legal analysts say the decision may boost investor confidence by reinforcing that statutory incentives provided for major projects will be upheld by the judiciary.
NLNG’s legal welcomed the judgment as a victory for the rule of law and contractual certainty.
NIMASA, which analysts believe should have long pursued a political solution to the matter, has been thrown into a quandary since the judgment was delivered.