[UPDATE] Statutory Levies: Appeal Court Dismisses NLNG Suit Challenging NIMASA’s Powers

Channels Television  
Updated March 29, 2019

 

The Court of Appeal sitting in Lagos, today has dismissed a judgment of the Federal High Court, which declared as illegal, levies imposed on Nigeria Liquefied Natural Gas (NLNG) by Nigerian Maritime Administration and Safety Agency (NIMASA).

The NLNG in 2013, had approached the Federal High Court, seeking a judicial determination of (among other things), the legality or otherwise of the levies sought to be imposed on it by NIMASA, on behalf of the Federal Government and the consequent blockade of the Bonny Channel by NIMASA and its agents as a result of the dispute.

In Oct 2013, the Federal High Court, Lagos, presided over by Justice Muhammed Idris, (who has now been elevated to Court of Appeal) held that NLNG, was not liable to pay three percent gross freight on its international inbound and outbound cargo, Sea Protection Levy, two per cent cabotage surcharge on all activities carried out for and on its behalf, as well as other sundry claims, as insisted by NIMASA.

Justice Idris also held that NLNG was not liable to make the said payments to NIMASA and that all payments already made by NLNG to NIMASA should be refunded to NLNG forthwith.

The judge further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG.

Dissatisfied with Justice Idris’ decisions, NIMASA filed an appeal before the Appeal Court in Oct 2017, challenging the judgment on the ground of fair hearing among other grounds.

In a unanimous judgment delivered today, Friday the three-man panel of the Court of Appeal led by Justice Garuba Lawal held that the Federal High Court was wrong.

They, therefore, dismissed the judgment of the lower court for lack of fair hearing

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The Appeal Court also ordered that the matter be taken back to the Federal High Court and be reassigned to another judge for retrial.

The judgment which was read by Justice Joseph Ikyegh, on behalf of the panel members held: “The appeal is allowed, and the judgment delivered by the lower court in October 2017 is hereby set aside”.

“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 for expeditious determination on its merit.

‘Parties are to bear the administrative cost of the appeal.”

In its suit before the court of appeal, NIMASA claimed that NLNG is liable to pay three per cent gross freight on its international in-bound and out-bound cargo as sea protection levy.

It also claims NLNG is to pay two per cent cabotage surcharge on all activities carried out for and on its behalf as well as other sundry claims.

All of these claims were, however, disputed by the NLNG which claimed it lost about 475 million dollars while NIMASA blocked Bonny Channel.

NIMASA says that with today’s judgment, the status quo is to remain and NIMASA will continue to collect statutory levies from NLNG on behalf of FG.