NIMASA, NLNG re-ignite battle over 3% freight earnings

The Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Liquefied Natural Gas (NLNG) on Thursday renewed their legal warfare at the Federal High Court in Lagos on the disputed demand for the payment of three percent of gross freight earnings.

NLNG and NIMASA had been locked in a fierce battle over the issue of non-payment of certain statutory levies and charges which NIMASA claims are due to it from NLNG.

The development had earlier led to the blockade of NLNG vessels by NIMASA, while a temporary agreement was reached by the parties for the amicable resolution of the matter.

By the temporary arrangement, NLNG agreed to continue paying the three percent of gross freight earnings under protest, while the legality of the demand would be argued before the court.

NIMASA in turn agreed to lift the blockage of NLNG vessels.

However, on Thursday when parties returned to the Federal High Court, the second defendant in the matter, Global West Vessels Specialist moved an application for stay of proceedings in the matter pending an appeal in respect of the matter before the Court of Appeal in Lagos.

The motion for stay was argued by Global West’s lawyer, Abiodun Owonikoko.

But NLNG’s lawyer, Abiodun Layonu, kicked against the motion for stay and urged Justice Mohamed Idris to reject same.

Layonu said up till date, his client had paid $150 million to NIMASA under the temporary arrangement, and that his client was desirous of getting to the root of the matter.

He said monthly, NIMASA collects about $3 million in tax from the NLNG, adding that his client desperately wants to conclude its substantive matter so as to determine the legality of the request of three percent of gross freight earnings.

It would be recalled that NLNG had sued the Attorney General of the Federation and Global West Vessels Specialist, which is an agent of NIMASA over the blockade of its vessels on grounds of non-payment of the three percent of gross freight earnings.

On June 18, 2013, Justice Idris granted an ex-parte order restraining the defendants from charging, imposing, demanding or collecting the 3 per cent of gross freight earnings or any other sums further to Section 15(a) of NIMASA Act 2007 on all of NLNG’s international inbound or outbound cargo ships owned, contracted or subcontracted by it.

The court had further struck out the application of the Attorney General of the federation challenging the order, on the ground that it was filed outside the time permitted by the court rules while a similar one filed by Global West was dismissed on the grounds that there was no suppression of any material fact, and that the company could be sued on behalf of its principal (NIMASA).