Akwa Ibom High Court Strikes Out Suit Against Addax Petroleum

0

The High Court of Akwa Ibom State on 15th March, 2021, struck out the N166 billion suit of Akwa Ibom State Internal Revenue Service against Addax Petroleum Development (Nig) Ltd.

In a considered judgement delivered by the Honourable Justice Theresa Obot, the Court upheld the objection of the Defendant’s Counsel – Olurotimi Aju, Esq. of CLP Legal – to its jurisdiction and, accordingly, struck out the entire claims of the Claimant.

The Claimant had claimed the sum of N166 billion against the Defendant for various taxes and levies, including PAYE and WHT, purported to have been unremitted by the Defendant between 1997 and 2018, and arising from the Defendant’s operations of OML 123 allegedly falling within the territorial jurisdiction of Akwa Ibom State.

The Defendant, however, contended at the trial that it was not liable to the Claimant for any of the taxes and levies claimed, since it did not have any staff or vendors resident within Akwa Ibom State, or otherwise carry on business in the State. The Defendant further contended that OML 123 is offshore Nigeria, and the abolition of the onshore/offshore dichotomy by legislation heavily relied upon by the Claimant only related to the revenue derivation formula and did not change the seaward boundary of littoral States, including Akwa Ibom State.

Citing relevant provisions of the 1999 Constitution, Federal High Court Act, Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, and other legislation, alongside decisions of the appellate courts, the Defendant’s Counsel argued that the Federal High Court had the exclusive jurisdiction to determine matters howsoever arising, in respect of mines and minerals and offshore Nigeria. The Defendant’s Counsel thus, submitted that the High Court of Akwa Ibom State lacked the competence to assume jurisdiction over the matter, both from a subject-matter and territorial perspective.

The Court upheld the Defendant’s challenge to its jurisdiction in its entirety, and accordingly, struck out the Suit.