NLNG, NIMASA levies feud enters new chapter
… Lands in court
The final resolution of the festering feud between the duo may rest with the courts, as the Nigeria LNG Limited (NLNG) Tuesday filed a case in the Federal High Court, Lagos, against the Nigerian Maritime Administration and Safety Agency (NIMASA) over disputed levies demanded by the apex maritime regulator.
The litigation follows apparent failing of arbitration by the Attorney-General of Federation (AGF) and Minister of Justice, Mr. Mohammed Bello Adoke, on the issue to address the NLNG’s concerns over the legitimacy of the levies wthin the context of tax exemptions inferred in its enabling laws.
In a statement, General Manager, External Relations, NLNG, Dr. Kudo Eresia-Eke, said that the company was proceeding with the compliance with the determination of the AGF to pay the levies in the interim.
Eresia-Eke explained that the NLNG was suing to seek “judicial clarity and interpretation on the legality or otherwise of the various levies imposed on NLNG by NIMASA, while complying, under protest, with the government’s directive to pay the said levies.”
The NLNG statement noted that the protracted dispute between both parties arose as a result of perceived conflict in the enabling Acts of both organisations, namely the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act on the one hand, and Nigerian Maritime Administration and Safety Agency Act, Merchant Shipping Act and Coastal and Inland Shipping Act on the other hand.
While NIMASA contended that its levies were applicable to the NLNG, the latter argued that the company was exempted from such levies and charges by virtue of the NLNG Act.
Pointing out that “NIMASA had filed a suit against NLNG in 2010 claiming entitlement to these levies”, Eresia-Eke said: “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.
“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.
“NLNG has thus commenced installment payment, under protest, to NIMASA in compliance to the government’s directive, but without prejudice to its right to seek judicial interpretation in the court of law.”
The NLNG stated: “It is instructive to note that Nigeria LNG 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.”
According to the gas company: “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, among others, 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 NLNG statement added: “The company has often clarified that the issues it has with payment of any levy, charge or impost have 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.”
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 (15 per cent), and Eni International (N.A,) N. V. S. a. r. l (10.4 per cent).
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