NIMASA justifies action against NLNG over N25bn debt

NLNG loading bayToju Vincent

02 July 2013, Sweetcrude, Lagos – THE Nigerian Maritime Administration and Safety Agency, NIMASA, has justified its action against the Nigerian Liquefied Natural Gas Company, NLNG – blockade of vessels in and out of the nation’s territorial waters.

NIMASA last week stopped three vessels belonging to the gas company from entering and leaving Nigeria’s territorial waters saying that “it neither violated nor disobeyed court orders.

The latest face-off arose after NIMASA carried out its earlier threat to issue detention order on all NLNG ships over a controversial indebtedness of N25Billion to the apex maritime regulatory agency, a decision which affected three liquefied natural gas tankers.

In a petition to the office of the Attorney General of the Federation and Minster of Justice, NIMASA, through its lawyers; Messrs Mike Igbokwe, said that an earlier letter to the same office by NLNG was misinforming the Minister, the Federal Government of Nigeria, the National Assembly and the public and also wrongly portraying NIMASA “as a contemnor which willfully refused to obey a court’s order.”

The NIMASA argued in the letter that was also copied to the Presidency, the National Assembly, Ministry of Defence and the Heads of the armed forces, as well as the minister of Transport that NIMASA by virtue of its enabling Act, “is a body corporate with perpetual succession and a common seal capable of being sued and of suing in its corporate name which gives it a separate and distinct identity and capacity from your office”.

NIMASA also picked holes in the claim by the oil and gas firm that it had filed a suit and ”served the said orders on, you (for and on behalf of the Federal Government and all its agencies including NIMASA and Global West Ltd.). You were not sued as a representative of NIMASA or to defend NIMASA in a representative capacity and NIMASA was not mentioned anywhere in the title, of the suit”.

Claiming that the controversial suit does not concern it directly, NIMASA also argued in the letter to the Justice Minister that, “it is obvious from the said drawn up orders advertised by NLNG that our client is not a party to the above suit.

It is also clear from the said advertised court order that your office and a company known as Global West Vessel Specialists Nigeria Limited were the only parties to the suit as the 1st and 2nd Defendants.”

Recall that the NLNG had in a statement issued after the three ships were denied access, alleged that the NIMASA action was a flagrant disregard of a court order, stating that the three affected ships were barred from accessing or leaving the company’s loading bay.

“The potential implications of this current action by NIMASA on Nigeria LNG operations are enormous and would impact negatively on its international LNG buyers,” the company had said through its spokesperson; Kudo Eresia-Eke.

The NLNG also claimed that it had paid about N3.2 billion in outstanding levies to NIMASA under protest and had filed a suit on June 18 against the agency to seek judicial clarity and interpretation on the legality of the levies.

It will however be recalled that NLNG was directed on May 18 to pay outstanding levies to NIMASA after a state arbitration panel ruled the company was not exempt from paying taxes.

The law setting up the NLNG exempted the company from paying taxes for 10 years or until the cumulative price of liquefied natural gas reached $3 for a million British thermal units. NIMASA said this tax break expired in January 2004 after gas prices reached $9 a million British thermal unit on Nymex.

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