Illegal Port Charges: Court Orders Shipping Companies To Refund Over N1trn

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A Federal High Court sitting in Lagos has declared that the Shipping Line Agency Charges (SLAC) levied and collected from Nigerian shippers by shipping companies since 2006 is illegal.

The Court therefore ruled that the shipping companies should account and pay to Nigerian shippers all monies or fees charged and collected since 2006 as SLAC from shippers or users of shipping/port related services from 2006 to date which run into Trillions of Naira.

In a major decision delivered by Buba J. sitting at the Federal High Court Lagos, in SUIT NO. FHC/CS/1646/2014 – ALRAINE SHIPPING AGENCIES (NIG) LTD & ORS Vs NIGERIAN SHIPPERS’ COUNCIL and SUIT NO. FHC/CS/1704/2014 – APAPA BULK TERMINAL LTD & ORS Vs NIGERIAN SHIPPERS’ COUNCIL affirmed the appointment of the Nigerian Shippers Council (NSC) as the Economic Regulators of the Ports and dismissed the claims of Shipping Companies and the Terminal Operators.

Pursuant to the appointment of the Nigerian Shippers Council (NSC)as the Economic Regulator of the Nigerian ports by the President, in line with his executive powers in February 2014, the NSC issued Notices to both the shipping companies and Terminal operators to reverse all illegal charges levied on Nigerian shippers.

Dissatisfied, the shipping companies and the Terminal Operators, mostly foreign owned, filed these suits to invalidate the actions of the NSC.

The Nigerian Shippers Council represented by Olisa Agbakoba Legal filed a Counter Affidavits to the suits and Counter claimed in relation to the Shipping companies case as follows:

1. A DECLARATION that by virtue of the provisions of Clause 2(a) and(b) of the Memorandum of Understanding between Providers and Users of Shipping/Port and Related Services dated 28th March, 2001, the Plaintiffs do not have the powers or rights to unilaterally introduce and impose Shipping Lines Agency Charges (SLAC);

2. A DECLARATION that the unilateral introduction and imposition of the Shipping Lines Agency Charges (SLAC) by the Plaintiffs and collection of same from shippers or users of shipping/port-related services from 2006 to date is illegal, ultra vires, and therefore null and void;

3. AN ORDER directing the Plaintiffs to immediately stop collection of the Shipping Lines Agency Charges (SLAC) from Users of Shipping/Port and Related Services; and

4. AN ORDER directing the Plaintiffs to account for and pay to the Defendant, with interests at the rate of 21% per annum, all monies or fees collected by the Plaintiffs as Shipping Lines Agency Charges (SLAC) from shippers or users of shipping/port related service from 2006 to date.

5. A Declaration that by virtue of Section 5 of the Constitution of Nigeria 1999; Section 4 of the Nigeria Shippers’ Council Act Cap. 133, Laws of the Federation of Nigeria 2004, Regulation 3 of the Nigerian Shippers Council (Local Shipping Charges on Imports and Exports) Regulations 1997 and the written directive from the Minister of Transport dated 20th February 2014, the Defendant can act as economic regulator of Nigerian ports to issue directives, ensure fair competition; take lawful steps to make the Ports user-friendly and attractive to business and regulate local shipping charges in Nigerian ports.

In well-considered judgments, the Court dismissed the claims of the shipping companies and the Terminal operator and granted the Counter claims of NSC. By this decision, shippers in Nigeria who have paid SLAC to the shipping companies between 2006 to date can now seek a refund.