Court Quashes Akwa Ibom’s N166b suit against oil firm

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For want of jurisdiction, an Akwa Ibom State High Court in Uyo has struck out the N166 billion suit by the Akwa Ibom State Internal Revenue Service against Addax Petroleum Development (Nig) Ltd.

Justice Theresa Obot upheld the firm’s contention that the court had no jurisdiction to adjudicate on claims arising from Oil Mining Lease (OML) operations, and struck out the government’s entire claims.

The claimant had claimed the sum of N166b against the defendant for various taxes and levies, including Pay as You Earn (PAYE) and Value Added Tax, 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.

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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 legislations 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 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.

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