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NLNG/NIMASA: Dakuku hails Appeal Court judgement

DG NIMASA, Dr.  Dakuku Peterside

The Director General
of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku
Peterside, has hailed the appeal court judgement in the case between the Agency
and the Nigerian Liquefied Natural Gas (NLNG) Limited over levies payable to
the maritime regulator, saying it has reaffirmed confidence in the

The Court of Appeal
in Lagos on Friday set aside an earlier judgement of the Federal High Court,
which had exempted NLNG from the levies, on the grounds that NIMASA was not
given fair hearing at the lower court. 

Justice Mohammed Lawal Garba, who
delivered the judgement, ordered that the case be sent back to the high court
for fresh trial under a different judge. 
Reacting to the
ruling, Dakuku said NIMASA remained law abiding and will continue to work
closely with the judiciary in matters that need clarity and
He said, “This
judgement has further shown that the judiciary is unbiased and remains a beacon
of hope for Nigerians. On our part as a responsible Government Agency, we will
continue to work closely with the judiciary and other stakeholders to ensure
that we realise our mandate of creating a robust maritime sector in line with
best global practices.”
Dakuku further
stated, “NIMASA and NLNG are neither foes nor competitors. We are corporate
cousins working together for the common good of our great country. Judgements
like this only serve to strengthen our institutions and ensure greater
The Agency had in
2010 commenced an action against NLNG, wherein it sought for an interpretation
of relevant provisions of the Nigerian LNG (Fiscal Incentives, Guarantees and
Assurances) Act, CAP N87, Laws of the Federation of Nigeria 1990, and the
NIMASA Act of 2007. In January 2013, the action by NIMASA was withdrawn in a
bid to amicably settle the dispute out of court.
Consequently, in May
2013, NIMASA requested NLNG to pay all statutory Levies accruable to the
Agency, including the 3% levy on gross freight on inbound and outbound
international cargo, 2% Cabotage levy and Sea Protection levy, stating that the
NLNG was not exempted from payments of statutory levies after its tax holiday
ended many years ago. Following the continued disregard of the provisions the
NIMASA Act and other relevant laws by the NLNG, their vessels were detained for
Upon agreement
between both parties, on July 12, 2013 before Honourable Justice Idris Mohammed
of a Federal High Court in Lagos, NLNG agreed to pay outstanding levies
attributable to the Free on Board (FOB) and cabotage vessels if the companies
fail to make payment to NIMASA within 3 months from Friday July 12th 2013. 

NLNG also agreed to continue to pay all applicable levies in line with the
NIMASA mandate. 
The court order also gave NIMASA liberty to collect levies
directly from Free on Board (FOB) and cabotage vessels without recourse to
In a surprising
twist, the Agency received a pre-action Notice on the 18th of June 2013 from
Counsel to NLNG, giving a thirty (30) days notice of their intention to
commence legal action in accordance with Sections 53(2) of the NIMASA Act. 

Hearing of the substantive issue continues after which the Federal High Court
ruled in favour of NLNG. 
Dissatisfied with
the judgement of the Federal High Court by Justice M. B. Idris delivered in the
case between NIMASA and the Nigeria Liquefied Natural Gas, (NLNG), the Agency
appealed the matter in October, 2017. 
NIMASA action is in
line with its enabling law, the NIMASA Act 2007. Section 15 (a) of that Act,
stipulates, “The Agency shall be funded by monies accruing to the Agency from
the following sources: 3 per cent of gross freight on all international inbound
and outbound cargo from ships or shipping companies operating in Nigeria to be
collected and paid over to the Agency to meet its operational cost.”
Section 2 (1) of
NIMASA Act states, “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.” 

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