Barely two weeks after deploying the Egina Floating Production Storage Offloading (FPSO) unit for operations, LADOL, one of the builders of the vessel, has terminated its agreements with the foreign partner, Samsung Heavy Industries (SHI), over allegations of untoward activities, including contractual and ethical breaches.
Specifically, LADOL, a logistics company and operator of the Free Zone within the Apapa Port, terminated its partnership with SHI, on the Egina FPSO project, the largest of its kind in sub-Saharan Africa, accusing SHI of consistently engaging in unacceptable violations of Nigerian laws and regulations.
LADOL also accused Korean company of undercutting it by withholding crucial information on their joint operations, in addition to flagrant disregard for the Nigerian labour laws and industry regulations.
The company’s Managing Director, Dr. Amy Jadesimi, said that LADOL had refrained from taking action against SHI until now, as it weighed the national interest and avoided any action that could have disrupted the multi-billion dollar Egina FSPO project.
To anchor its action on legally solid grounds and protect its investment, LADOL has instituted legal proceedings against SHI, by recently filling a suit with number: FHC/L/CS/1459/2018, at the Federal High Court, Lagos.
In the suit, LADOL accused SHI of violating the procedures of the Nigerian Customs Service, and those of the Nigerian Immigration; breaches of regulations of the Nigerian Content Development and Monitoring Board (NCDMB) and refusal to remit statutory tariffs to the Federal Government despite several demands from the Nigerian Export Processing Zone Authority.
LADOL also accused SHI in the suit of habitually breaching Nigerian contract laws by persistently refusing to comply with rules and regulations of the LADOL Free Zone area.
SHI was accused also of blatantly repudiating major contractual terms in the agreements signed with the logistics company, and concealed funds provided for in the Head Contract from its local content partner, LADOL
In addition to the suit, Global Resource Management Limited, a subsidiary of LADOL, in a four-page termination letter dated September 4 issued to the Korean company, the Nigerian company accused SHI of by-passing it to work directly with the Nigerian Ports Authority (NPA); NCDMB and other government regulatory agencies.
LADOL stated that it terminated the partnership with SHI based on these grounds, alleging that SHI’s actions violate the agreement both companies signed in 2014.
Also, LADOL alleged that SHI excluded it from the operations, as a way of refusing to transfer technology, one of the crucial agreements in its contract, whilst demanding huge unconscionable variations from their client (the Total/NNPC Joint Venture), and hence deviations from its obligations to the Nigerian people.