NPA Terminates Intels’ Pilotage Contract

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Managing Director, Nigerian Port Authority (NPA), Hadiza Bala-Usman
  • Court stops cancellation of company’s operations

Eromosele Abiodun

After over three years of bickering, the Nigerian Ports Authority (NPA) thursday terminated its boat pilotage monitoring and supervision agreement with Intels Nigeria Limited.

Intels is a leading integrated logistics and facilities services provider in the maritime and oil and gas logistics sectors of the economy.

However, the Federal High Court, sitting in Lagos, has granted an interim injunction stopping the NPA from terminating the company as the manning agent in the pilotage districts of Lagos, Warri, Bonny/Port Harcourt and Calabar.

But in a marine notice, the NPA directed all service boat owners and operators to do transactions directly in each of its port complex.
The marine notice read in parts, “This is to inform our numerous stakeholders in Nigeria and abroad that the service boat operation hitherto handled by a third-party company, the Integrated Logistics Services (Intels) Nigeria Limited has been terminated.

“By this notice, all service boat owners and operators are to do transactions directly in each of the port complex of the NPA. Every service boat movement must be reported and booked at the office of the Harbour Master of the District, where Pilotage Chits and Master Declaration forms will be issued and returned after every movement.”

The NPA in the notice dated September 1 and signed by its Harbour Master, Lagos Pilotage District, Capt. Daniel Hosea, directed that every enquiry on service boat movement should be directed to the office of its port manager of the ports/harbor master, pilotage district.
The NPA had in a letter dated March 29, 2019, addressed to the Managing Director of Intels, revoked the contract in line with Article 8 (C) of its agreement with Intels, dated February 11, 2011.

However, after several meetings and interventions, the NPA and Intels decided to settle their differences given that the contract would expire in 2020.

The March 2019 letter signed by NPA’s Assistant General Manager, Legal Services, read in part, “we refer to the agreement dated February 11, 2011, and August 24, 2018, between the NPA and Intels Nigeria Limited for the monitoring and supervision of oil industry-related activities in the compulsory pilotage districts of the authority (service boat operator).

“The NPA (the principal ) hereby serves on you Intels Nigeria Limited, (the managing agent) notice of termination in line with article 8 (C) of its agreement with Intels, dated 11th February 2011, which said notice shall expire three months from the date of this notice of termination.”

In an earlier letter dated March 27, 2019, NPA’s Executive Director, Finance and Administration, Mohammed Bello-Koko, had recommended the cancellation of the contract to the Managing Director of NPA, Hadiza Bala-Usman, accusing Intels of non-compliance with the presidential directive and circular on implementation of Treasury Single Account (TSA) and Article 4.1 of the executed supplemental agreement by refusing to remit $145, 849,309.33, being outstanding service boat revenue generated from November 1, 2017 to October 31, 2018, to NPA.

According to Bello-Koko, Article 4.1 of the executed supplemental agreement states, “The total revenue generated on behalf of the principal in each of the pilotage districts from the service boat operations shall be paid directly into the principal’s TSA at designated commercial banks which will be swept daily into the principal’s corresponding TSA at the Central Bank of Nigeria (CBN).”

He stated that Intels neither remitted $55.72 million, which it pledged to remit in a letter dated February 12, 2019, nor $145.84 million, which it demanded via various letters.

Meanwhile, a Federal High Court sitting in Lagos has granted an interim injunction stopping the NPA from terminating the role of INTELS Nigeria Limited as a manning agent in the pilotage districts of Lagos, Warri, Bonny/Port Harcourt and Calabar.

Justice R.M. Aikawa granted the interim injunction in a suit number FHC/L/CS/1058/2020 based on an application filed by INTELS and Deep Offshore Service Nigeria Limited against the NPA.

INTELS and Deep Offshore had requested the court to restrain NPA from preventing them from performing their duties as managing agent, pending the determination of ongoing arbitration proceedings.

The court order, which was issued on August 28, reads: “That an order is granted restraining the respondent, its servants, agents, and/or privies from giving effect for the purported notice of expiration issued it on 5th August 2020 or taking any other step to prevent the parties from performing their duties and obligations under the agreements between the 1st applicant and respondent dated 11th February 2011 and 24th August 2018, pending the determination of the originating motion dated 12th August 2020 seeking for interim measures of protection in support of the pending arbitration between the parties therein.”

The court adjourned the matter till September 15 for the hearing of the originating motion on notice.

Consequent upon the court order, INTELS in a statement yesterday asked the shipping community to disregard the marine notice by NPA, adding that it was issued in contempt of the court.

“NPA’s publication is highly selective, inaccurate and should be disregarded, as it seeks to circumvent legal due process. Indeed, a dispute has arisen over NPA’s right to terminate our role as managing agent in the pilotage districts of Lagos, Warri, Bonny/Port-Harcourt and Calabar. This dispute has been submitted to arbitration, and the arbitral proceedings have already commenced.”