A Review of the Nigerian Energy Industry

NLNG resumes legal battle with NIMASA over tax levies

NLNG-exportsKunle Kalejaye 15 August 2014, Sweetcrude, Lagos –  Nigeria Liquified Natural Gas, NLNG, owners of six rans with an overall capacity of some 22 million tonnes per annum of LNG and 4 million tonnes per annum of LnG, says it was resuming its legal battle against Nigerian Maritime Safety and Administration Agency, NIMASA, and Global West Vessel Specialist Ltd, GWVS, in its bid to be exempted from paying freight levies on its gas cargoes.
NLNG action is sequel to a ruling on August 11th, 2014 by Nigeria’s court of appeal sitting in Lagos which upheld NLNG’s request to sue a private security company, Global West Vessel Specialist Ltd, employed by state maritime security agency NIMASA to carry out blockades of shipment of LNG cargoes in between May and June 2013, NLNG said in a statement. 

Gas exports by NLNG were halted between May and June, 2013 for three weeks after NIMASA blocked ships from entering and leaving the Bonny LNG plant’s loading bay.
The blockade led to more than N76 billion losses in revenue to NLNG in 2013
NIMASA then wanted NLNG to pay $140 million to coverfreight levy arrears. 

NLNG said then that Nigerian law exempts the company from paying freight levies, and took NIMASA and West Global to court challenging the imposition of the levies and
the resulting blockade.

But after initially withdrawing the case, which allowed the blockade to be lifted, NLNG said on Wednesday the court ruling delivered on Monday “affirmed a previous judgment by a Federal High Court also in Lagos, which granted NLNG the rights to sue the security company Global West, for its role in the blockade of the gas export cargoes.” 

NLNG said last year it lost more than Naira 76 billion ($475 million) in revenue because of the blockade. 

NLNG is owned jointly by state oil firm Nigerian National Petroleum Corp. (49%), Shell (25.6%), Total (15%) and Eni (10.4%).
Kudo Eresia-Eke, NLNG General Manager, External Relations in statement said the Court of Appeal in Lagos on Monday, August11, 2014 upheld a preliminary objection by Nigeria LNG Limited and dismissed an appeal filed by Global West Vessel Specialist Limited, challenging an earlier Federal High Court decision to continue a substantive suit over the blockade of NLNG’s jetty in Bonny, from where the Company exports cargoes of liquefied natural gas and allied products.
The statement reads “In a lead judgment delivered by Hon. Justice Rita Nosakhare Pemu, with which the other Justices that heard the appeal concurred, the Appeal Court ruled that the Notice of Appeal filed by Global West was “incompetent” as contended by NLNG, having been filed without leave either of the Federal High Court or the Court of Appeal.
“The ruling affirms a previous one by the Federal High Court in Lagos dismissing Global West’s Notice of Preliminary Objection against a substantive suit by NLNG on the ground that Global West was a proper party to the suit.
“Following the refusal by the Federal High Court, Global West then proceeded to the Appellate Court to set aside the decision and stay proceedings at the lower Court pending the determination of the appeal.
“Nigeria LNG Limited in 2013 filed a case at the Federal High Court against the Attorney General of the Federation and Global West, seeking a judicial determination on, among other things, the legality or otherwise of certain levies sought to be imposed on NLNG by Nigerian Maritime Administration and Safety Agency (NIMASA), an agency of the Federal Government and the consequent blockade of NLNG vessels by NIMASA and Global West as a result of the dispute.”
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