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Stories by Isaac Anumihe
Stakeholders in the maritime industry have expressed worry over the prolonged legal tussle between the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Liquefied Natural Gas (NLNG), saying that the legal logjam impedes the ease of doing business in Nigeria.
They argue that the legal conundrum can send a wrong signal to the international community as well as foreign and local investors while also hurting the economy.
According to them, rather than seek the decision of the court, both parties should resolve their differences in the court of arbitration.
Although, a number of stakeholders took sides with either NIMASA or NLNG, the concern of the majority was the economy, which they feared, would be badly affected.
President, Merchant Navy Officers’ Association, Mr Matthew Alalade, argued that NIMASA was right to insist that NLNG pays the statutory levies to the agency, including the three per cent levy on gross freight on inbound and outbound international cargo, two per cent cabotage levy and sea protection levy
For him, NLNG cannot be exempted from the payments of statutory levies when other firms are compelled by law to pay the same levies and duties.
Citing Section 2 (1) of NIMASA Act, Alalade said: “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”.
Alalade noted that the three per cent levy was in accordance with International Maritime Organisation (IMO) regulation. He advised NLNG to be cautious of the law.
“NIMASA is likely to win on appeal. They should look at the international law. I don’t know where NLNG derives its powers to challenge NIMASA,” he argued.
The co-ordinator, Save Nigeria Freight Forwarders, Chief Patrick Chukwu was more worried with how the legal battle will affect the economy and how it will scare investors in the maritime industry.
He advised NIMASA to reconsider its plan to appeal because it is likely to lose again based on the issues that gave the victory to NLNG in the first place.
“It is affecting the industry because the money NIMASA would have been making will no longer be made. And on the part of NLNG, its revenues will equally dwindle. NIMASA will still get the same judgement. NLNG has all it takes to win again. Its lawyers have looked at the laws and discovered that they are on the right side of the law. They are ruining the economy. The logjam is an evil wind that blows no one any good. Those working there (NLNG) are Nigerians too. NIMASA should consider all the pros and cons before proceeding to appeal court. Supposing NIMASA wins, I am sure NLNG will go to the Supreme Court thereby wasting time and resources and the economy will ultimately suffer,” he said.
Another freight forwarder who prefers to remain anonymous, said that if NLNG refuses to pay the statutory levy, and gets away with it in the law court, many other investors governed by NIMASA’s law may decide to follow suit. This is likely to impoverish NIMASA and its mandate will not be realised. The government will equally lose revenue, he said.
NIMASA was set up by the Shipping Policy Decree of May 11, 1987, to facilitate the development of the shipping industry, ensure free and safe navigation on the Nigerian waterways. Since it has no budgetary allocation like other revenue-yielding agencies, it derives its revenues from levies, duties and taxes from the shipping operators.
Its revenues come from the three per cent levy on gross freight on inbound and outbound international cargo; two per cent cabotage levy and sea protection levy without exemption to any shipping operator in the industry.
So, hiding under the act setting it up as a regulator in the industry, NIMASA had blocked the NLNG’s Bonny Channel for not paying the statutory levy. This caused NLNG an incalculable loss.
During the period of the blockade, NLNG was said to have lost over $315,598,823.29. Irked by the action of the regulatory agency, NLNG headed for the court.
In his judgment, Honourable Justice M.B. Idris held that NLNG was not liable to make the said payments to NIMASA, and that all such payments already made by NLNG to NIMASA should be refunded to NLNG forthwith. Idris also held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG.
Expressing his joy over the judgement, the General Manager, External Relations of NLNG, Mr Kudo Eresia-Eke told Daily Sun that the judgement would have presented the nation in a bad light if it had been the contrary.
“Only God knows what would have happened if the court had declared NIMASA the winner. We are very glad that such a pronouncement was made. We must continue to engage them (NIMASA) in a peaceful, orderly manner. If we had behaved like NIMASA, it would have been a different thing. It is a message to other regulators to use their powers according to the rule of law,” he said.
Few hours after the decision of the High Court, NIMASA announced its intention to appeal.
In a statement, the Director General of NIMASA, Dr. Dakuku Peterside, vowed to proceed to the appeal court where he hopes to get a favourable judgement. According to him, the regulator leverages on the fund to perform its duties.
“The agency pays into the coffers of the government. It is from these funds that the agency develops and secures the maritime sector. NIMASA does not receive any government allocations” he said.
From all indications, the industry has not heard the last of the case between the two giant players in the industry.
