Atiku’s Intels Challenges NPA’s Termination of Agency Agreement
The management of INTELS Nigeria Limited has kicked against the termination of its Pilotage Agency Agreement by the Nigerian Ports Authority (NPA), describing the action as “preposterous” and highly ‘’injurious’’ to the interests of the country.
Intels, in a statement disclosed that following the letter from the Attorney General of the Federation (AGF) and Minister of Justice, Mr. Abubakar Malami (SAN), to the Managing Director of NPA, Ms. Hadiza Bala-Usman, directing NPA to terminate the pilotage agreement, NPA terminated the contract on Tuesday, October 10, 2017, without inviting it as the other party to the agreement for negotiation or due recourse to the terms of the agreement that specify conditions precedent before a party can exit the contract.
In a letter signed by its Director, Silvano Bellinato,and addressed to the Managing Director, NPA, it reads, “With reference to your letter received on October 10, 2017, allegedly terminating the agency agreement between Nigerian Ports Authority and INTELS Nigeria Limited, we formally contest the contents of the same for the reasons stated below:
“On March 15, 2017, we received your letter ref HQ/F&A/ED/AD/INTELS/034 in which, in addition to other contents, the following points were stated: that the Nigerian Ports Authority acknowledged a debt towards INTELS Nigeria Limited in the sum of $674,767,415.00 (in addition to the interests accrued in the meantime); the NPA communicated the need to reconcile the sum of $109,000,000.00 for the additional works carried out; and the NPA informed INL about the implementation to be discussed in respect of a ‘transit account’ called the NPA Service Boat Revenue Collection Account domiciled at one of the banks indicated by you and the related standard operating procedures.”
It added, “The NPA confirmed 28 per cent agency commission to INL and the 72 per cent balance to be shared between the NPA and INL in the ratio 30:70. On March 27, 2017, we replied to every point in your letter of 15th of March as stated below: The INL took note of NPA’s acknowledgement of debt; the INL declared availability to meet the NPA in order to discuss the details for the certification of the $109,000,000.00 for the additional works carried out; and the INL requested for postponement of the SOP application.
According to the firm, on April 19, 2017, the NPA acknowledged INTELS’ acceptance of the NPA’s proposal in respect of 28 per cent agency commission (already included in the existing running agency agreement) and in particular to the 30:70 split, respectively to the NPA and INL related to the 72 per cent balance.
This, it noted, would imply that the 30 per cent was to be remitted on monthly basis to the NPA, while the 70 per cent was to be applied towards reducing indebtedness to INTELS.
“Regarding the TSA application, the NPA reiterated the strategic importance of such a request. However, it is noted that the TSA was not part of the existing agency agreement between the parties,” INTELS said.
The company stated that on May 5, 2017, it replied NPA’s letter of April 19, 2017 proposing the opening of a jointly signed account on which the boat service revenues would have been directed.
Bellinato added, “Afterwards the account holders, with relative proxies, would remit the respective portions due to the parties, being 30 per cent in favour of the NPA and 70 per cent in favour of the INL.
“In the same letter, we indicated our availability to identify the bank, from among the ones indicated by the NPA, regarding the reasons of our proposal we firmly reiterated the precariousness of our financial status, mainly attributable to the credits towards the NPA and heavily financed by various credit institutions.
“Such circumstances rendered alternative solutions to the ones suggested by us unviable, and also taking into consideration the inapplicability of the TSA to running contracts in the manner proposed by the NPA.
“Clearly, deduction of entitlements due to the INL from collections under the agreement, and payment of the balance into the designated NPA account for TSA purposes, would be in compliance with the TSA policy.”
INTELS said the decision of the NPA to terminate the agreement, which was totally unexpected in consideration of the meetings held by the parties and exchange of letters, was clearly preposterous and the consequences highly injurious to the interests of the company.
“Hence, in compliance with the Article 12 of the Agency Agreement between the NPA and INL, we hereby request you to schedule a meeting within seven days from the date of this letter, in order to analyse the residual critical areas of our relationship and to agree, to the possible extent, on a common solution.
“Should this not happen, we hereby notify you that, in accordance with Article 13 of the Agreement, we will refer the matters to arbitration, in order to safeguard our company from the significant damages and other adverse consequences that may result from this rather unbecoming decision.
“We wish to reach an amicable solution as soon as possible for this complicated matter so that we can avoid to request for the intervention of the court for the immediate payment of any amount due to us from NPA, also in light of the likely pressure for action from our banks, which we may be compelled to do, despite our unwillingness,” the company stated in the letter.