Did NPA err in decommissioning BUA Terminals?

Hadiza Bala Usman, NPA MD

By Adegboyega Oni

By fiat, a typical Nigerian landlord can go miles to eject tenants from his house. Desperate ones could take the law into their own hands by asking carpenters to remove the roofs, doors or windows of apartments of their tenants in order to eject them. Many a shylock landlord purchases kangaroo injunctions against his unsuspecting tenants who might never know that such a case existed to ease them out of his property. Some might even result to the use of charms to attack their tenants diabolically as a way of frustrating them to quit their property. Defaulting tenants are a butt of ridicule in the hands of the landlord’s wife or wives. Such acts are dimensional and endless. This was the story of landlords and tenants prior to the coming into office of former governor Babatunde Raji Fashola in Lagos State.

  This situation however has changed with a new tenancy law promulgated by the Fashola administration. Under the law, the roles of both the landlords and tenants are clearly spelt out just as what constitutes infractions is spelt out too. Under the law, a landlord has ceased to be the judge in his own case against his tenants; obtaining of kangaroo injunction to eject tenants unlawfully has since stopped. A case between landlord and tenant now goes to the arbitration rooms locally set up by the state government to resolve such dispute amicably.

 The recent melee between the Nigerian Ports Authority (NPA) and one of its tenants, BUA Port and Terminals Limited, in Port Harcourt port, is a flashback to the pre-Fashola landlord-tenant scenario as painted above. NPA has gone back to that era and is acting it with impunity by unilaterally decommissioning BUA Ports and shutting its gate down thus denying it access to its operational terminal.

Shockingly, the NPA even went as far as not only taking the case to a Lagos court but also the Court of Arbitration of the International Chamber of Commerce, Paris, France. It is inconceivable and baffling and a lack of faith in the Nigerian judiciary system. This is a clear waste of public funds as the case in Paris won’t be adjudicated free of charge as all the processes including hiring of lawyers even if they were to come from Nigeria will be paid for in dollars. Even, if the Paris arbitration will adjudicate the matter free of charge, it is not enough for NPA to take the matter to Paris; doing so is an indictment on the competency of local arbitration courts and arbitrators and the campaign by the Nigerian Shippers Council urging Nigerian maritime stakeholders to embrace arbitration.

The crux of the disagreement is a breach of agreement and allegation of dereliction of duty against NPA by BUA. According to BUA, ‘’Under the agreement between the parties, NPA as an obligation, among others, to dredge the port and repair the quay apron of the terminal which responsibility it has failed to perform till date.

 ‘’The background to the issues between the NPA and BUA Ports and Terminals Limited has its root in the Lease Agreement between the Nigerian Ports Authority, the Bureau of Public Enterprises on one hand both representing the Federal Government of Nigeria and BUA Ports and Terminals Limited on the other hand. The Lease Agreement provides for mutual rights and obligations and makes provision for dispute resolution mechanism which explicitly states that disputes shall be resolved by arbitration.

‘’To our surprise and bewilderment and in clear breach of the contractual provisions, NPA by a letter dated 11th November, 2016 terminated the Lease Agreement. BUA Ports and Terminals as a law abiding corporate citizen approached the Federal High Court, Lagos Division in Suit No. FHC/L/CS/633/17 between BUA Ports and Terminal Limited v. NPA contesting the purported termination of the lease and obtained an order of injunction restraining NPA from terminating or giving effect to the notice of termination pending the referral of the issues in dispute to arbitration as provided under the agreement.

‘’It is important to state that subsequent to the order of injunction, BUA Ports and Terminals wrote several letters and made overtures to the management of NPA for an amicable resolution of the dispute. NPA did not respond to the request for amicable settlement or the overtures made as the management of NPA appears bent and determined to give effect to the notice of termination by several measures including but not limited to decommissioning the terminal.

‘’Consistent with the terms of the agreement, BUA wrote a letter dated 16th May, 2019 to notify the NPA of the state of the jetty and the need for immediate remedial works. BUA Ports and Terminals specifically in that letter requested the approval of NPA for it to carry out the necessary repairs and reconstruction to avert imminent collapse and danger to human lives. However, NPA instead of giving requisite approval as requested in the letter…took law into its hand by directing the decommissioning of the jetty and immediate closure of the terminal.’’  

  The company noted that it had contracted a construction company to carry out the repairs and had made part payment expecting NPA to pay its own part of the money for the contract but failed to do so.

  But to the Nigerian Ports Authority, there is no truth in the BUA claims that NPA has run afoul of the injunction granted by the Federal High Court, Lagos.  NPA noted that the time it secured the injunction and when it decommissioned Terminal B for safety concerns BUA enjoyed peaceful occupation of the premises and berthed 117 vessels made up of liquid and dry bulk cargos.  More so, the total number of vessels berthed showed that they have been making full commercial use of the terminal even with the poor quay walls and low draft.

  According to NPA, ‘’It is curious that BUA has continued to insist that the NPA has run  afoul of the injunction granted by the Federal High Court, Lagos, because there is no truth in this. Within the 18-month period between January 2018 when the injunction was secured and June 2019 when the authority (NPA) decommissioned Terminal B for safety concerns, BUA enjoyed peaceful occupation of the premises and berthed 117 vessels made up of liquid and dry bulk cargos! This puts a lie to every attempt to suggest that the NPA has flouted the orders of a court of law.  More so, the total number of vessels berthed showed that they have been making full commercial use of the terminal even with the poor quay walls and low draft.

‘’BUA Ports and Terminals Limited also claimed to have written several requests for approval to perform remedial works on the berth. This is a laughable claim as BUA only commenced writing the authority requesting to reconstruct the berth after the termination notice had been issued following 10 years of refusal to fulfill this obligation. How can you request to reconstruct a berth which you have no legal claim to following the termination? This is yet another of their attempts at deceiving the Nigerian public.

 ‘’On the provision of security, the absence of which BUA alleged: “led to the nefarious activities of hoodlums and vandals who over a period of time cut the pipes and steel beams of the berths thereby affecting their stability and consequently making remedial works imperative,” the Authority wishes to state that we have a record of three reported cases between 2014 and 2016, ten years after BUA was supposed to have commenced and concluded the reconstruction works. These acts of vandalism, (which were recorded on August 25, 2014 at 17:45 hours, June 27, 2016 and August 11, 2016 at 2:00 hours respectively) would not have happened if the company had complied with the agreement and conducted the reconstruction within 90 days stipulated within the concession agreement as the collapsed state of the berth exposed the structures and allowed for the cutting. Nevertheless, the authority is committed to continuously secure the berths despite these isolated cases.

 ‘’For the avoidance of doubt, the decision to decommission Rivers PortsTerminal was out of safety concerns. This concern resulted from a May 16, 2019 BUA Ports and Terminals Limited letter informing us that the “jetty is in a state of total dilapidation and in urgent need of repair or reconstruction…our engineers have advised us that the jetty is liable to collapse at any moment…”

  Prior to the port concession in 2006, NPA was totally in charge of port operations – cargo handling, ship handling etc. For efficiency, the ports were ceded by the Federal Government to private investors, to run and manage. Under the concession agreement, NPA acts as the landlord with some obligations to perform while the investors as the tenants have their own obligations too to perform so as to keep the port running.      

  What can be deduced from the arguments of both parties is a dereliction of duty; a breach of contract; damning heavily against NPA, the landlord, than BUA, the tenant. The port concession agreement right from inception has created a leeway for NPA to be a lazy landlord and a judge whose word is order and which has to be respected by the tenants even if is at fault. If the concession agreement mandated BUA to repair within 90 days of takeover all the dilapidated infrastructures in the terminal and they failed to do so, who should be blamed – BUA or NPA? NPA, of course; why did NPA wait ten years to take action against BUA despite collecting billions of naira in fees from the concessionaires without taking into consideration the economic damage to cargo and lives? If NPA had acted fast as a serious landlord and impressed it on BUA timely to carry out the repairs, this argument would not have arisen at all; which has exposed the odious of dereliction of duty and breach of agreement by the two.

  Isn’t it sad that with billions of Naira in the coffers of NPA yet port infrastructures are in a state of disrepair? The Port Harcourt port in question is over 100 years old and all its infrastructure are completely worn out as the Managing Director of NPA, Hadiza Bala Usman, recently attested to. Same for ports in Lagos, they are fully overstretched. For 13 years since concession, no new port has ever been built as all the proposed deep seaports in Badagry, Lekki and Ibaka are still in the cooler years after their conception. NPA is rather more obsessed with organizing shows that have little or no direct impact on the industry than taking up the gauntlet of courage to build new infrastructure and ports to relieve the existing ports. NPA alone, if serious, can conveniently build new deep seaports for the nation without kobo from private investors. But where is the courage or seriousness?

  How corporate is an organization that cannot obey a simple gentleman agreement? NPA and the tenants, including BUA, are expected to fulfill their parts of the concession agreement. If BUA, although ten years after breach of the agreement, is now alive from slumber and contracting the repair of quay apron of the terminal to a contractor, which it claimed is the sole responsibility of NPA, NPA nurse a contrition knowing that it too had breached the agreement and; the age-old parastatal pay its own part of the contract fee rather than allow the matter degenerate to a public argument and decommissioning of BUA and closure of the terminal.  

  Although BUA might have one way or the other violated that law which NPA might be citing as a reason for decommissioning the terminal but it is a mean act by NPA which is not different from a callous landlord who orders the removal of the roof, door and window of the apartment of his defaulting tenant. The decommissioning is condemnable and may discourage further investments in the port industry as investors will be wary of the excessive power of NPA to lord everything over them. Also the decommissioning will possibly increase the number of Nigerians in the unemployment labour market as many workers might be laid off by BUA if NPA succeeds in getting BUA decommissioned through the court.   

  Another twist to the argument is NPA being a judge sitting to adjudicate over a case it is fully involved. NPA cannot be seen to be dispensing justice (decommissioning, self-help) in a case which is fully involved and party to as a signatory to the concession agreement. NPA should be stripped off the excessive power of closing down a terminal. This necessarily calls for an establishment of a regulator by the government to regulate and whip the landlord, NPA, and the tenants, the concessionaires, where necessary to the path of rectitude.

  Moreover, this is the time for the concession agreement to be brought to the public domain for a review, 13 years after its promulgation. It is time the public is made aware in its entirety the terms and conditionalities embedded in the NPA – Concession Contract Agreement. As it is, so much is hidden from the public purview. For instance, whereas the indigenous concessionaires have been a little more forthcoming with regard to opening up to both maritime and general public in their activities, their foreign counterparts have been aloof and distant in their conducts. It could be recalled that an Apapa Terminal gate once shut out a visiting MD of NPA and his august visitors and senators of the Federal Republic of Nigeria who were on a monitoring visit to the terminal. Had that happened at a terminal operated by a Nigerian, the consequence might have been very drastic.  The current agreement has given more power to NPA than necessary while it is silent on the punishment for the same NPA where it fails to perform its own obligations but with a punitive punishment for concessionaires. What is good for the goose is good for the gander.

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