The Federal High Court ("FHC" or "the Court"), sitting in Yenagoa, recently delivered its judgment in a case between The Incorporated Trustees of the International Association of Drilling Contractors, Nigeria ("IADC" or "the Plaintiff/Applicant") and the Nigerian Content Development and Monitoring Board (NCDMB or "the Defendant/Respondent").
The FHC held that the NCDMB is empowered by its enabling statue
- the Nigerian Oil and Gas Industry Content Development Act
(NOGICDA or "the Act") - to collect one percent of every
contract awarded to any operator, contractor, sub-contractor in the
upstream sector of the oil and gas industry, and the members of the
IADC are required to comply with the statutory obligation.
Interestingly, the court did not dwell on the merits of the case
but struck it out largely on technical basis that the IADC lacked
the
locus standi to institute the case. Consequently, the court lacked
the jurisdiction to commence the suit.
Commentary
The roots of the suit date back to the passage of the NOGICDA. There has been a dispute about the range of application of the NCD levy between players in the Nigerian oil and gas industry and the NCDMB. Section 104(2) of the Act is clear that the NCD levy is payable on "...any project, operation, activity or transaction in the upstream sector of the Nigeria oil and gas industry..." (emphasis ours). The bone of contention has remained the definition and breadth of the term "upstream sector".
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