Minister of Transport, Rotimi Ameachi

A severed relationship between Nigerian-owned PhoenixTide Offshore and Tidewater Marine, a foreign firm, has brought to the fore how easy business relations can go awry, reports Kunle Aderinokun

In the light of the ongoing reforms at the Federal Inland Revenue Service (FIRS) aimed at strengthening it and enabling it to accelerate revenue generation to buoy the Nigeria’s embattled economy, PhoenixTide Offshore Nigeria has asked the federal government to investigate how Tidewater Marine Inc, a foreign firm operating in the maritime sector, allegedly evaded taxes running into billions of naira.

Document obtained by THISDAY, revealed that PhoenixTide Offshore Nigeria owned by the former Minister of Commerce, Chief Bola Kuforiji-Olubi, has also alleged Tidewater manipulated an expatriate quota to the tune of about N20 billion and failed to remit its own share of the mandatory share of the 2.2 percentage of profits made by companies in oil and gas business to NIMASA and FIRS in accordance with Cabotage Act.

PhoenixTide Offshore Nigeria Limited is a 100 per cent-owned Nigerian marine logistics company providing services to oil and gas companies operating in deep-water exploration and production. A 60/40 joint venture was established between PhoenixTide and Tidewater, to form Tidewater PhoenixNigeria Limited, to tackle the challenges preventing Tidewater from operating in Nigeria. The challenges came as a result of the Nigerian Coastal and Inland Shipping (Cabotage) Act 2003 which was enacted by the National Assembly on April 30, 2003 and became effective on the 1st of May 2004.

However, responding to PhoenixTide’s allegation, the Counsel to Tidewater Marine, Babatunde Ajibade SAN, argued that PhoenixTide Offshore was only out to tarnish the image of its client after a futile attempt to make it pay a compensation in the sum of $100 million when it severed business relationship with the former.

“When my client informed them that it was no longer interested in continuing its business relationship with them, they demanded a sum of approximately $100,000,000 (One Hundred Million US Dollars) as compensation. The campaign of calumny that they have since mounted against my client’s business interests in Nigeria, is in our opinion, a direct result of my client’s refusal to be blackmailed into paying them this stupendous sum, which has no basis in the agreements between the parties,” Ajibade stated.

But Counsel to PhoenixTide Offshore, Ade Adedeji SAN, refuted Tidewater Marine’s claim, wondering why Phoenix Offshore would have demanded $100 million compensation when the severance of the relationship was at the instance of Phoenix Offshore and not Tidewater.

According to Adedeji, “It is mischievous and rather out of context to have suggested that PhoenixTide demanded $100million compensation from Tidewater for severance of business relationship when the severance was as a result of PhoenixTide insistence on Tidewater to open their books and fulfull their tax and other financial obligations to the Federal Government.

“ It may interest you to know that PhoenixTide joined the Office of the Attorney-General in the suit initiated by PhoenixTide and rather than the former Attorney-General joining issues to recover debts owed the Federal Government, they curiously filed an application seeking to resist joinder,” he added.

Sources close to PhoenixTide Offshore and the Kuforiji-Olubi family noted that Tidewater’s refusal to give various government agencies actual figures on revenue triggered PhoenixTide’s refusal to sign for the release of funds held by Total Nigeria Plc to the tune of $40 million. This was captured under contestable outstanding liabilities incurred by Tidewater in the name of PhoenixTide as its vehicles of operations in the marine business for oil and gas from 2004 to 2013 in addition to other millions of naira.

It stated that the fact of the matter was that “the firm was allegedly involved in the non-remittance of N4.11 billion taxes on expatriates hired by Tidewater and was also alleged to have refused to disclose revenue to enable FIRS calculate taxes, hence refusal of Phoenix to sign for the release of profits held by Total Nigeria Limited.”

According to the source, “Tidewater Marine and its associates in the name of PhoenixTide are being made liable for these to the Federal Government of Nigeria and others. And it was necessary to establish to Tidewater that PhoenixTide was its main vehicle for conducting business in Nigeria, which enabled it through PhoenixTide to operate in the Nigerian coastal waters as marine technical services provider, but did not make appropriate returns in the name of PhoenixTide, the contracting party and make correct payments to FIRS, LIRS, RIRS, NIMASA and other regulatory agencies in the name of PhoenixTide.

“And that this amounts to an impersonation resulting in manipulated returns to these agencies in its name and that of Tidex Nig. Ltd by not allowing PhoenixTide to take credit for its operations, notwithstanding the tax concessions given to foreign companies which in this case should have applied only to the income earned by Tidewater as supplier of technical services to PhoenixTide and not the whole of the revenue earned on the business with PhoenixTide, thus depriving the Federal Government of the right quantum of corporate income tax and education tax.”

Pointing out that, four years after the notice given by Tidewater for cessation of their business venture with PhoenixTide, a company they managed and controlled since its incorporation, sources, noted that, “the Nigerian directors of PhoenixTide are still not closer to ascertaining verifiable accounts of the business over the course of nine years of relationship with Tidewater.”

“A report of Tidewater’s financial and fiscal infractions against the Federal Government and its Nigerian partner PhoenixTide was drawn to the attention of the FIRS since October 2012, and to date that agency is still investigating this report, although it demanded US$14million back taxes from Tidewater in September 2014 which Tidewater consistently endeavoured to wriggle out of with threats to sue both NIMASA and the FIRS, suggesting reconciliation and giving information on sale of vessels and duplication of invoices.

“What is incontrovertible is the fact that the IOCs returning levies on behalf of the federal government to NIMASA, will not accept liability for funds that NIMASA is not entitled to based on the contractual obligations of the marine services contractor with the IOCs, and which is not in their possession having deducted same from sums paid to the contractor, PhoenixTide. Furthermore before a system for direct collection of levies from contract sums by the IOCs commenced in NIMASA on 1st April 2009, Tidewater had assessed itself for levies due to NIMASA which it paid either by cheques or bank transfers to that agency. All these are documented in papers and analysis in the possession of FIRS.”

“PhoenixTide, while seeking protection for itself in 2013 brought an action in the Federal High Court under the Settlement and Non-Prosecution Agreement, signed by Tidewater in 2011 with the Federal Government to which PhoenixTide was a party. Tidewater challenged this action on the grounds of lack of jurisdiction relying on their contract with PhoenixTide as having a foreign jurisdiction clause (a matter which the English courts had determined was under English jurisdiction). However on the 6th of March 2015, Abang J in giving his judgement stated that “the claim before this court falls squarely within the Admiralty Jurisdiction of this Court under section 251(1)(G) of the 1999 Constitution as amended. The place of performance of the contract is in Nigeria. Under Section 20 of the Admiralty Jurisdiction Act any agreement by any person or party to any cause, matter or action which seeks to oust the jurisdiction of this court is null and void if it relates to any admiralty matter falling within the jurisdiction of this court”.

“On the issue of “locus standi” which had been tested in the Commercial Court in London, as to whether an action could be brought under the settlement and non-prosecution agreement by PhoenixTide against Tidewater, the English court under Justice Michael Burton had determined (in spite of legal opinion obtained from Oba Nsugbe SAN, QC – a UK legal practitioner) that PhoenixTide had no right to bring up such a claim under this agreement. Yet Abang J (who one might add would be the constituted legal authority to determine this issue as the governing law here is Nigerian Law) thought otherwise stating that under clause 9 of the said agreement PhoenixTide clearly had the right to bring about the action.

“This matter it must be stated is extremely pertinent as it formed an important issue in the English jurisdiction case and had the matter not been so frivolously dismissed by the UK judge he would not have been afforded the opportunity to state that English jurisdiction applied.

“This turn of events should not come as a surprise to the discerning Nigerian public as Tidewater have been able to obtain ex parte orders in the UK Commercial Court with manipulated evidence and untruths which the court seems to have accepted as the truth for reasons best known to it.

“It is highly unsurprising in an environment where every Nigerian is painted with the tar brush as being corrupt, a thief and a liar. What justice is available to people who Tidewater’s hierarchy describe as bloody Africans daring to challenge a major corporate organisation in the Western world?

Ironically the self-assured and self-justified foreign corporation, Tidewater which has consistently refused to provide verifiable serially consecutive bank statements of its receipts in US Dollars and Naira of the proceeds of its business with PhoenixTide, insists that the English commercial court must compel the non-executive chairman of PhoenixTide who has even resigned her appointment from the company on health grounds and downsized her equity in the company, should provide Tidewater with a list of her bank accounts, bank statements and evidence for reasons of withdrawals and lodgements into these personal accounts remotely related to the operations of PhoenixTide, nor containing any funds belonging to Tidewater on the excuse that her asset declaration under duress is inadequate especially as she has been a onetime minister of the Federal Republic of Nigeria, and a former chairman of one of the largest banks in Africa, south of the Sahara, UBA,” the source narrated in the document made available to THISDAY.

As it stands, THISDAY checks revealed, a British Court has frozen the assets of Bola Kuforiji-Olubi and her son Tokunbo following the ex parte motion requested by Tidewater on 21 April 2015, which was granted on the 22 April 2015. A source close to the family of the Kuforiji-Olubis, pointed out that “this was as a result of Tidewater’s inability to get the type of judgement they wanted in Nigeria and thus, a corporate matter was turned to a personal matter.”

Meanwhile, in his reaction, Tidewater’s Counsel, Babatunde Ajibade, noted that “all the agreements they signed with my client, they voluntarily and willingly acceded to the insertion of exclusive jurisdiction clauses by which they agreed that any dispute that arose between the parties would be settled before the High Court in London, England.

He added: “ Immediately a dispute arose between the parties, my client commenced an action against them before the High Court in London, England in accordance with the terms of the agreements entered into between the parties, pointing out that “they participated in these proceedings before the High Court in London and challenged its jurisdiction to hear the case and that this challenge was dismissed on the basis of the settled position of the law that parties are free to agree on where and how to settle their disputes and that once such agreement is reached, a party will not be allowed to resile from it unilaterally.”

“They did not challenge this decision of the High Court in England either by way of appeal or at all but chose instead to ignore the further proceedings in that court including its subsequent default judgment against them with impunity, which is what resulted in the contempt proceedings they are currently facing in that court,” he added.

But Phoenix Offshore’s Counsel, Ade Adedeji, explained that, “In all the cases instituted in Nigeria, Tidewater has gone on appeal to challenge the decisions of the lower court. In the case instituted by PhoenixTide, they had brought an application to challenge the jurisdiction of the court among other prayers. Their application was dismissed and they have since gone on appeal.

“In the interpleader summons instituted by Total seeking to pay into court the sum outstanding on account of contracts executed by PhoenixTide, the court ruled in favour of Total and PhoenixTide that the money should be paid into court pending resolution of issues between parties. This ruling is also being challenged at the Court of Appeal by Tidewater.”