NSC removing illegal charges burden from shippers

By David Adebayo

After 12 years of legal dispute on Progressive Storage Charge and shipping line agency charge (SLAC) illegally imposed on shippers by shipping line and terminal operators, some shipping companies have approached Nigerian Shippers Council (NSC) of their decision to settle out of court.
In 2014, the Nigerian Shippers Council (NSC), as part of its statutory mandate of port economic regulator moved to stop the collection of the Progressive Storage Charge (PSC) and Shipping Line Agency Charge (SLAC) and other charges slammed on shippers at the ports but the companies dragged the council to court.
The case actually arose from the notice that was issued by the council to shipping companies and terminal operators to refund excess charges that they imposed without approval to shippers within a time frame and when that notice was issued, they went to court challenging the powers of the council to issue that notice.
Incidentally, the shipping companies and terminal operators lost the case, as the Federal High Court in Lagos affirmed the decision of the ports economic regulator, ruling that they should revert to what they were charging before the increase in 2009.
For instance, the Lagos High Court in its judgment had ordered that the affected companies should refund N1trillion to shippers, saying that the collections of the charges were illegal.
Not satisfied with the judgement, the companies proceeded to the Appeal Court, where they also lost, before they headed to the Supreme Court where the matter has been lingering over the years.
However, the Executive Secretary of the council, Dr Pius Akutah explained in Lagos at forum with journalists that some of the affected companies had decided to settle out of court with the council, noting that five of the companies had paid certain amount as part of the settlement into the Single Treasury Account (STA) of the Cargo Defence Fund (CDF) under the council.
Although, the executive secretary did not declare the amount paid by the affected companies to the council as settlement considering the N1trillion the court awarded against them, however, the leadership of the Lagos Shippers Association of Nigeria (LSAN) claimed N30 billion had so far been paid.
Furthermore, Akutah disclosed that some of the shipping companies were still in the Supreme Court with the ports economic regulator as the case is coming up on September 29, 2026 but he was full of optimism that some of the remaining companies may still decide to settle out of court.
He explained: “The case has been on . As at the moment, the case is at the Supreme Court. It has not been folded yet. At some point the parties decided to pursue settlement, the settlement is ongoing. Some of them have reached some conclusions and a certain amount agreed has been paid into the Cargo Defence Fund in the Single Treasury Account of the Cargo Defence Fund.
“The money is there. And we are still pursuing further negotiations with others, while the case is still in court. I think the next date of hearing is September 29, 2026. Some of them that have negotiated settlement and have signed and have paid, have filed notices of withdrawal from the case. Few of them have paid, more are still pursuing the case, but we are hoping that after the next sitting, may be some of them will come back to negotiate the settlement. That is where we are with the case.”
Moreover, Akutah said that the council recently issued a Standard Operating Procedure (SOP) to provide a structured governance over the money, stressing that the amount paid so far was well protected and that the shippers were aware because they were carried along in all the processes.
Furthermore, he said: “When the settlement is reached, we sign, they sign, and the shippers know everything. So, we are creating a corporate governance structure around the money under the SOP. Also, SOP has agreed on certain areas where the money can be applied to be in the interest of shippers. It is only that which is in the interest of shippers that money can be applied to be in the interest of the shippers.
“The shippers have taken part in drafting the SOP. Every paragraph in the SOP is inserted by them and their counsel before the approval so we are getting to the point where we can set up Board of Trustees of the Cargo Defense Fund.
“We now have a board of the council; we also want to have a board of the Cargo Defense Fund so that the core corporate structure guaranteeing the money is complete so that no single individual can determine what happens to the money. So it will be a collective effort of different bodies using the structure corporate governance.
Recall that in a major decision delivered by Buba J. of the Federal High Court in Lagos in 2014, there was a court order directing the plaintiffs to account for and pay to the defendant, with interests at the rate of 21per cent per annum, all monies or fees collected by the plaintiffs as Shipping Lines Agency Charges (SLAC) from shippers or users of shipping/port related service from 2006 to date.
Also, the court affirmed the appointment of the Nigerian Shippers Council (NSC) as the Economic Regulators of the Ports and dismissed the claims of Shipping Companies and the Terminal Operators.
The judge held that the shipping Line agency charges (SLAC) levied and collected from Nigerian shippers by the shipping companies since 2006 was illegal and that the shipping companies should account and pay to Nigerian shippers all monies or fees charged and collected since 2006 as SLAC from shippers or users of shipping/ port related services from 2006 to date which run into Trillions of Naira.
Pursuant to the appointment of the Nigerian Shippers Council (NSC) as the economic regulator of the Nigerian ports by the President, in line with his executive powers in February 2014, NSC issued notices to both the shipping companies and terminal operators to reverse all illegal charges levied on Nigerian shippers.
Dissatisfied, the shipping companies and the terminal operators, mostly foreign owned, filed the suits to invalidate the actions of the NSC.
The Nigerian Shippers Council represented by Olisa Agbakoba Legal filed a counter affidavits to the suits and counter claimed in relation to the shipping companies case, noting that by virtue of the provisions of Clause 2(a) and(b) of the Memorandum of Understanding between providers and users of shipping/port and related services dated 28th March, 2001, the plaintiffs do not have the powers or rights to unilaterally introduce and impose Shipping Lines Agency Charges (SLAC).
There is need by the council to impose fines on shipping companies imposing illegal charges unilaterally on port users. This will bring sanity into the port industry.