NLNG seeks to be exempted from levies.
In a bid to resolve the lingering face-off with the Nigerian Maritime Administration and Safety Agency, NIMASA, over alleged accumulated debt, Nigeria LNG Limited, NLNG, on Tuesday took its case before the Federal High Court, Lagos.
The company said though it was complying with government’s directive to pay the said levies imposed on it by NIMASA, it was doing so under protest by seeking judicial interpretation to clarity the legality or otherwise of the various levies.
Nigeria LNG General Manager, External Relations, Kudo Eresia-Eke, said on Tuesday that the protracted dispute between both government agencies was as “a result of perceived conflict in the enabling Acts of both organizations, namely the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act, on 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 all companies doing business within Nigeria’s territorial waters, including the NLNG, the NLNG is arguing that they were exempted from such levies and charges by virtue of the provision of the NLNG Act.
Mr. Eresia-Eke recalled that NIMASA had filed a suit against NLNG in 2010 claiming entitlement to these levies, adding that after preliminary proceedings, NIMASA filed an application to withdraw the suit; and on May 3, shortly before the commencement of hearing on the matter, opted for self-help by blocking the Bonny Channel for two days.
The blockade, the NLNG Manager said, prevented ingress and egress of NLNG chartered vessels, with attendant financial losses and reputational damage to NLNG and Nigeria in general.
He said following the blockade, the Federal Government had directed the NLNG management to comply by paying the levies, pointing out that the company has already commenced the payment by installment of the debt to NIMASA, though without prejudice to its right to seek judicial interpretation in the court of law.
“It is instructive to note that Nigeria LNG Limited 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 3% freight levies on cargo exports shipped by NLNG, and that the 2% Cabotage Levy on LNG carriers is inapplicable because NLNG’s LNG vessels are not involved in coastal trade or cabotage,” Mr. Eresia-Eke said.
“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, amongst others, requires that all its dealings are governed and premised on the universal principles of the rule of law to which the Nigeria Government also affirms its commitment,” he added.
He said the NLNG has clarified that the issues it has with payment of any levy, charge or impost has little to do with the amounts involved, but more with the principle of the rule of law, so that the company could 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 the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%) , with its partners, Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).
NIMASA had on May 3 triggered a major trade dispute with NLNG in Bonny Island, blocking access to the company’s major loading terminals for gas export following the gas company’s refusal by the to pay the statutory 3 per cent levy of every freight entering or leaving the country through the nation’s territorial waters.
“NLNG has never paid this statutory charges thus building huge backlogs in debt, and so denying the nation massive revenue.” acting Director, Shipping Development, NIMASA, Waredi Enisuoh, said.
NIMASA accused the NLNG of cherry-picking its laws that would be obeyed, saying its management refused to meet its obligations despite all efforts made for it to do so.