Nigerian government has recorded big breakthrough in alternative dispute resolution over sub-lease conflict between Samsung’s SHI-MCI FZE and LADOL as Pacific Ruby, the first LNG fueled Aframax COT, entered the Lagos ports on Friday. The dispute between the two parties has been raging for the past four years with countless court cases and with over 3000 jobs under threat by LADOL’s decision to evict the Samsung subsidiary from its fabrication and integration yard.
The intervention of new NEPZA management and the Attorney General of the Federation, Abubakar Malami however changed the tide as LADOL management displayed magnanimity and good faith by allowing the yard to reopen operation for business. The dispute had prevented Pacific Ruby built by SHI Korea this April and other similar vessels from patronising Nigerian ports as no other quay in Nigeria can receive this size of vessels except disputed SHI-MCI Yard. Nigeria had lost millions of dollars in revenue over the period.
The partnership between SHIN and LADOL started when the two companies entered a joint venture and established SHI-MCI FZE. In turn, SHIN was able to build a fabrication and integration yard at the LADOL free zone in Lagos for the integration of around $3.0 billion Floating Production Storage Offloading (FPSO) unit. Meanwhile, a Special Economic Zone group, the FTZ Watchdog has described the development as “a big boost to the efforts of Muhammadu Buhari administration to strengthen investors’ confidence in the Nigerian Special Economic Zones and a demonstration of patriotism and integrity by LADOL management”
In a statement in Abuja over the weekend, signed by its Executive Secretary, Bala Bankudi, the group expressed commendation to the management of LADOL for “embracing the bigger picture by resolving to re-embrace its partner for amicable resolution of the almost four year old dispute, adding that “LADOL deserves praises for demonstrating its capacity to be a responsive and responsible player in the SEZ space. “The regulator of FTZs in Nigeria, that is the Nigerian Export Processing Zones Authority (NEPZA) has now emerged as an effective umpire with tremendous capacity to resolve compllex and complicated business and legal disputes. To this end, we commend the Minister of Trade, Otunba Niyi Adebayo for good guidance to NEPZA under the proactive leadership of Prof Adesoji Adesugba. “To resolve a dispute ongoing for almost four years under few months confirms stakeholders’ position that NEPZA is best placed to regulate Nigerian Special Economic Zones in line with international best practices”, the group opined.
While urging more application of alternative dispute resolution mechanism, the group hailed the role played by the Attorney General of the Federation, Abubakar Malami who gave neccesary backing and support for the fasttracked intervention of the regulator in the dispute. “This is a success story for all stakeholders, from LADOL to NEPZA to the Justice and Trade Ministers. A template now exists that can be effectively deployed to resolve other outstanding court cases within the free zone ecosystem. We must embrace all efforts to boost investors’ confidence”, the Watchdog group noted.
