Egina FPSO: LADOL, Samsung in legal dispute over equity holding in SHI MCI
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Barely four weeks after the Egina Floating, Production, Supply and Offloading (FPSO) vessel departed from the Lagos Deep Offshore Logistics (LADOL) Base, the dispute between LADOL and the Samsung Heavy Industry (SHI), has taken a new dimension as both now face legal battle over the ownership of SHI MCI Free Zone Enterprise, a joint venture set up for the execution of Egina FPSO project.
Currently, the management of LADOL said it has issued an interlocutory application for injunction to restrain Samsung from parading itself as the owner of 70 percent of SHI MCI FZE.
LADOL says the injunction also restrain Samsung from selling or dealing with or disposing of the shares in SHI MCI FZE pending the hearing and determination of the substantive proceedings.
Speaking to newsmen in Lagos on Thursday, Fidelis Oditah, counsel to LADOL and LADOL Free Zone, accused Samsung of committing a fraud by taking LADOL’s equity in SHI MCI FZE and giving itself 70 percent ownership of the fabrication and integration facility, approved by the federal government of Nigeria.
Oditah, who said that SHI MCI FZE has no valid or subsisting sublease, added that SHI MCI FZE was not entitled to a renewal of its annual operating licence.
On the operating licence, he said, SHI MCI FZE did not satisfy the condition of regulation 41 of the LADOL Free zone regulations 2016, which stipulates among other things payment of licence fee; provision of all information, document and returns required by zone management; payment of all outstanding amounts and fees due to Zone management.
According to him, “Contrary to Samsung’s accusations in the media, there is no court order restraining the free zone management from doing anything. The temporary restraining order granted by the court on 31st July 2018 was discharged by the court on 14 August 2018.”
Secondly, even if there is such a restraining order, LADOL zone management has not violated SHI MCI FZE’s operating licence. The operating licence, (both annual and the two-month extension), expired in June and early September, 2018 respectively by effluxion of time in accordance with their terms and without any intervention by LADOL management.
On the contempt charges filed against directors in LADOL, the counsel said the affected directors have applied for the contempt proceeding to be set aside from being grossly irregular and consequently invalid.
According to him, by issuing contempt proceedings, Samsung is seeking to get through the backdoor and by all means of intimidation or coercion an order to renew the operating licence which the court refused to grant on 31st July and 14th August 2018.
“LADOL and Samsung agreed between 2010 and 2013 to tender together (as local content partner and main contractor respectively) for the Egina FPSO contract which Total intended to award.
They agreed that if the tender was successful, a joint venture company –SHI MCI FZE – would be formed to construct and own the upgraded fabrication and integration facilities at LADOL, on the basis of 80 percent ownership by LADOL and 20 percent for Samsung.
Oditah explained that the joint bid by LADOL and Samsung was successful and it was awarded the Egina FPSO EPC contract ultimately in the sum of over US$3.1 billion which, unknown at that time to LADOL, included a sum of US$214 million for the construction of the upgrade of the fabrication and integration facilities at LADOL.
Recall that the dispute that erupted between both partners, Nigerian regulators made LADOL to surrender its 80 percent equity interest in SHI MCI FZE, gave Samsung 50 percent and accepted a 30 percent equity interest, for which it paid Samsung and SHI MCI FZE US$40.5 million.
AMAKA ANAGOR-EWUZIE