The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside, has hailed the appeal court judgement in the case between the Agency and the Nigerian Liquefied Natural Gas (NLNG) Limited over levies payable to the maritime regulator, saying it has reaffirmed confidence in the Judiciary.
The Court of Appeal in Lagos on Friday set aside an earlier judgement of the Federal High Court, which had exempted NLNG from the levies, on the grounds that NIMASA was not given fair hearing at the lower court. Justice Mohammed Lawal Garba, who delivered the judgement, ordered that the case be sent back to the high court for fresh trial under a different judge.
Reacting to the ruling, Dakuku said NIMASA remained law abiding and will continue to work closely with the judiciary in matters that need clarity and interpretation.
He said, “This judgement has further shown that the judiciary is unbiased and remains a beacon of hope for Nigerians. On our part as a responsible Government Agency, we will continue to work closely with the judiciary and other stakeholders to ensure that we realise our mandate of creating a robust maritime sector in line with best global practices.”
Dakuku further stated, “NIMASA and NLNG are neither foes nor competitors. We are corporate cousins working together for the common good of our great country. Judgements like this only serve to strengthen our institutions and ensure greater bonding.”
The Agency had in 2010 commenced an action against NLNG, wherein it sought for an interpretation of relevant provisions of the Nigerian LNG (Fiscal Incentives, Guarantees and Assurances) Act, CAP N87, Laws of the Federation of Nigeria 1990, and the NIMASA Act of 2007. In January 2013, the action by NIMASA was withdrawn in a bid to amicably settle the dispute out of court.
Consequently, in May 2013, NIMASA requested NLNG to pay all statutory Levies accruable to the Agency, including the 3% levy on gross freight on inbound and outbound international cargo, 2% Cabotage levy and Sea Protection levy, stating that the NLNG was not exempted from payments of statutory levies after its tax holiday ended many years ago. Following the continued disregard of the provisions the NIMASA Act and other relevant laws by the NLNG, their vessels were detained for non-compliance.
Upon agreement between both parties, on July 12, 2013 before Honourable Justice Idris Mohammed of a Federal High Court in Lagos, NLNG agreed to pay outstanding levies attributable to the Free on Board (FOB) and cabotage vessels if the companies fail to make payment to NIMASA within 3 months from Friday July 12th 2013. The NLNG also agreed to continue to pay all applicable levies in line with the NIMASA mandate. The court order also gave NIMASA liberty to collect levies directly from Free on Board (FOB) and cabotage vessels without recourse to NLNG.
In a surprising twist, the Agency received a pre-action Notice on the 18th of June 2013 from Counsel to NLNG, giving a thirty (30) days notice of their intention to commence legal action in accordance with Sections 53(2) of the NIMASA Act. Hearing of the substantive issue continues after which the Federal High Court ruled in favour of NLNG.
Dissatisfied with the judgement of the Federal High Court by Justice M. B. Idris delivered in the case between NIMASA and the Nigeria Liquefied Natural Gas, (NLNG), the Agency appealed the matter in October, 2017.
NIMASA action is in line with its enabling law, the NIMASA Act 2007. Section 15 (a) of that Act, stipulates, “The Agency shall be funded by monies accruing to the Agency from the following sources: 3 per cent of gross freight on all international inbound and outbound cargo from ships or shipping companies operating in Nigeria to be collected and paid over to the Agency to meet its operational cost.”
Section 2 (1) of NIMASA Act states, “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.”