Court orders Samsung to remove barricade around Ladol facility

A Lagos High Court at Tafawa Balewa Square (TBS) has ordered Samsung Heavy Industries (SHI) of South Korea to remove the barricade and the electric fence it erected around the facility of Lagos Deep Offshore Logistics (LADOL) within seven days.

Following a contractual dispute with LADOL, Samsung had on November 27, 2018, allegedly blocked three entrance gates to the LADOL fabrication and integration yard with blocks and crane.

The defendants told the court that Samsung Heavy Industries, on November 27, blocked three entrance gates to the LADOL fabrication and integration yard, using several dozens of 1m thick 32 ton blocks – piled three feet high, while the remaining access gate was blocked with a crane.

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It said the perimeter fence around the yard now displays signage saying: “Danger/1100v/High voltage/Gas Area/Explosion Hazard/Keep off.”

According to it, port users interpreted the signage to indicate that Samsung has actually electrified the fence.

Justice Abdulfattah Lawal directed LADOL to continue to supply electricity and water to its tenant (Samsung) and not to evict it pending when judgment will be delivered on the substantive suit on January 25, 2019.

The judge had earlier refused to grant Samsung an interim injunction to challenge the termination of the lease agreement it had with Ladol.

Samsung and Ladol went into partnership as main contractor and local content partners respectively for the procurement, construction and commissioning of the $3.3 billion Floating Production Storage Offloading (FPSO) for the Egina deep water oil field, operated by Total, on behalf of itself and partners.

Part of the terms of the contract, as set out by the Nigerian Content Development Monitoring Board (NCDMB), was the upgrading of LADOL’s fabrication yard and quay, a requirement targeted at providing and enhancing local content.

According to LADOL, the partnership soon ran into a crisis following its discovery that contrary to Samsung’s claim that it invested $300 million in the fabrication yard upgrade, Total allegedly paid $214 million to Samsung for the job.

The firm claimed that this turn of events made Samsung a contractor in the upgrade of the facility and not an investor as Samsung claimed.

LADOL averred that this development shortchanged it, whittling down its stake in the equity from 70 per cent to 30 per cent, led to more crises and shook LADOL’s confidence in the arrangement.

It alleged that SAMSUNG may have further complicated matters with its move to get the cost of rent of LADOL’s facility reviewed downward by engaging the Nigeria Ports Authority (NPA) in direct negotiation to that effect, contrary to the terms of the agreement between the two partners

Feeling shortchanged, LADOL, at the expiry of the sublease in June 2018, granted the partnership a two-month extension to enable Samsung complete its work on the Egina FPSO, rather than a renewal.

It said the two month extension of the operating license expired on September 2, about six days after the Egina FPSO sailed away to Egina field.

But, following Total’s intervention on behalf of Samsung, LADOL allowed Samsung workers to come into the zone to carry out some works, thus ensuring there was no loss to Nigeria.

It told the court that this was the situation until last Tuesday when Samsung, to the surprise of both Total, its client and LADOL, its estranged local content partner, went ahead to erect the barricade and the electric fence.