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Nigeria LNG blockade lifted by NIMASA

Oilfield Technology,

Nigeria LNG has secured the release of its vessels which were being blockaded in the Bonny Channel after agreeing to pay under protest the outstanding taxes that NIMASA was demanding. Separately, a court case over who had jurisdiction in a previous case in which an injunction had been imposed stopping port blockades was settled as well.

Previously on June 18th 2013, Nigeria LNG had a court injunction issued by the Federal High Court in Lagos in Suit No FHC/L/CS/847/2013 by Honorable Justice M.B. Idris, against the Attorney General of the Federation, Global West, and any other parties including Nigerian Maritime and Safety Agency, NIMASA, from blockading or imposing illegal charges on Nigeria LNG.

This rule had been challenged on the grounds that the Federal High Court did not have the jurisdiction to issue such an injunction.

However, on Friday 12 July 2013, the Federal High Court (FHC) upheld its jurisdiction that was challenged by the Attorney-General of the Federation (AGF) as well as Global West (GW) and NIMASA in the suit filed by NLNG seeking an interpretation of the NLNG Act and the legality of taxes being demanded by NIMASA.

The court held that the Federal Government of Nigeria was a necessary party in the action to the extent that the NLNG Act was a product of a direct agreement between NLNG shareholders and the Federal Government of Nigeria which the AGF is legal representative of.

The court also held that NIMASA's complaint that it ought to have been joined in the action went to no issue as it could not have had better legal representation in the suit than the AGF’s legal representation of it.

The court also ruled that GW, though a private company and agent of NIMASA, a disclosed principal, was also a party in the action to the extent that allegations were made against it in the originating summons before the court. The court thus upheld its Exparte Order against the AGF, and all other agents including NIMASA.

The court also held that the contempt proceedings initiated against GW and NIMASA did not comply with the rules of the FHC and thus set them aside and upheld the contempt proceedings against the AGF.

Mutual agreement

This however had already been overtaken by mutual agreements of the parties in a letter dated 12 July, 2013 which the Court today adopted as its consent order.

By that order, NLNG is to pay, under protest, outstanding sums to NIMASA in return for the immediate release of its vessels.

The payment has already been made and the NIMASA blockade consequently lifted as at about 10am today. Furthermore, NLNG agreed to discontinue all its contempt proceedings against all the parties.

NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%), Shell Gas BV (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).

Adapted from press release by Peter Farrell.

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