• Court case continues
BY: Justice Godfry
Nigeria’s flagship company, the Nigeria LNG Limited, has suffered revenue losses of over $355 million due to illegal blockade by the NIMASA, which persisted in spite of court orders, News Express can report this morning.
This is even as the legal battle between the two organisations is far from being over – going by the Certified True Copy of the March 29, 2019 judgement of the Federal High Court Lagos sighted on Thursday by News Express.
The 45-page judgement delivered by Justice Mohammed Lawal Garba says unequivocally: “The case is hereby ordered to be sent back to the Administrative Judge of the Lagos Division of the Lower Court to be assigned to a Judge thereof for expeditious determination on the merit.”
The foundation of the case dates back to May 3, 2013 when at about 4:20 p.m., a tug boat blockaded at the instance of NIMASA acting through Global West Vessel Specialists Limited, LNG Adamawa, an NLNG chartered vessel.
The blockade was a self-help effort to extract levies purportedly owed NIMASA by NLNG. According to NIMASA, these include shipping levies based on gross freight on exports and imports.
NLNG has consistently argued that the NLNG Act exempts it from payment of the Sea Protection Levy, the 3% freight levies on cargo exports shipped by NLNG, and the 2% Cabotage Levy.
NIMASA eventually lifted the blockade on May 5, 2013 after a meeting between the management of NLNG and NIMASA, in which it was resolved for lasting solutions to be sought under the rule of law.
On June 21, 2013, and in flagrant disregard of a subsisting court order barring it from further blockade of the Bonny Channel, NIMASA effected another illegal blockade of the Bonny Channel, preventing NLNG vessels and vessels belonging to its buyers from accessing or leaving the NLNG terminal.
After a three-week illegal blockade, during which NLNG was compelled to start making the disputed payments “under protest”, NIMASA ended the illegal blockade.
“Owing to the illegal blockade which persisted in spite of court orders, NLNG lost revenues of over $355 million,” a top source at NLNG said.
The dispute finally moved to court in June 2013 when NLNG filed a case at the Federal High Court, Lagos, seeking judicial clarity and interpretation on the legality or otherwise of the various levies imposed on NLNG by NIMASA.
In October 2017, the court delivered judgment in favour of NLNG against NIMASA, over applicability of the NIMASA levies. According to the court, NLNG was not liable to make the said payments to NIMASA, and all such payments already made by NLNG to NIMASA “under protest” should be refunded to NLNG forthwith. The court further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG and went further to restrain NIMASA from taking or continuing any steps to block, restrain, seize, detain or restrict NLNG (or its shareholders or subsidiary vessels or chartered vessels).
The said judgment of the Federal High Court was however reversed last week Friday, March 29, 2019, following an appeal filed against the same by NIMASA, with the Court of Appeal directing that the case between the two parties be remitted to the Federal High Court for a re-hearing.
“This decision,” according to a source, “gives the parties right to either go back to the Federal High Court for a re-hearing or appeal the decision to the Supreme Court.”
Continuing, the source said: “Where the case is to be heard afresh, the position of the parties would revert to what it was as at the time the case was filed, in which case no payments of the levies in dispute would be made by NLNG to NIMASA pending the re-hearing and determination of the suit. Where on the other hand the right of appeal to the Supreme Court is exercised, the status quo as of the date of the Court of Appeal judgment will be maintained, which is to the same effect.”
An NLNG official who spoke with News Express on Thursday said that the company is determined to remain a good corporate citizen in spite of its travails in the hands of NIMASA and “will continue to live up to its name and vision of ‘being a global company…helping to build a better Nigeria’.”
“In addition,” according to the source, “NLNG remains a good and responsible corporate citizen, committed to conducting its business in accordance with the laws of the Federal Republic of Nigeria, and abides with all applicable laws including those that confer exemptions on and grant fiscal/other incentives to businesses, as a way of sustaining its operations and growing the economy. By doing so, NLNG has recorded several feats in helping to build a better Nigeria:
“NLNG has monetised over 6.37 Trillion Cubic Feet of Associated Gas to Liquefied Natural Gas (LNG) and Natural Gas Liquids (NGLs), thus helping to reduce gas flaring by upstream companies from over 60% to well under 20%.
“From the monetisation of gas hitherto being flared, NLNG has generated over $100 billion revenue since inception; paid over $36 billion to Shareholders as dividends, of which 49% of that total has gone to the Federal Government by virtue of its shareholding stake.
“$28 billion paid to Joint Ventures (JVs) feedgas suppliers. 55% to 60% of that amount has gone to the Federal Government courtesy of its stake in the JVs.
“NLNG is by far the highest individual payer of Companies Income Tax in Nigeria. In 2018, the company’s corporate income tax paid to the Federal Government amounted to about $864 million, over 40% of what was paid in 2017.
“World Class Operations at NLNG, ranked number 1 in Plant Reliability in 2018 with the achievement of 98.4% Plant Reliability, projecting Nigeria’s image positively.
“Ranked fourth LNG Company worldwide by market share.
“NLNG is arguably number 1 in CSR in Nigeria. It has spent over N25 billion on community projects over the years; spent over N2 billion on building world-class engineering laboratories in six Nigerian Universities through the University Support Programme; spending N120 billion on the construction of Bonny-Bodo Road in Rivers State. Furthermore, the company signed an MOU with the Bonny Island community to provide N3 billion each year for 25 years for the overall development of the Kingdom.
“NLNG’s planned expansion with the construction of Train 7 will increase plant production by 35%, attracting huge Foreign Direct Investment (FDI) – $2 billion in upstream investment; some $5 billion in construction; creating over 10,000 jobs during construction etc. The 35% increase is expected to significantly impact on revenue, dividends, taxes profiles and CSR contribution in Nigeria.”