dangote-and-ibeto

A Federal High Court, sitting in Lagos, has adjourned a suit filed by Dangote Cement Plc against Ibeto Cement Company till November 1, 2016 pending the decision of the Court of Appeal on the matter. While Dangote Cement is alleging that Ibeto is gaining undue advantage by evading taxes, Federal Government is contending that Dangote Cement Plc is trying to wipe out fair competition and level playing field and create monopoly of the cement industry.

Other defendants in the suit are: IBG Investments Limited, Derima Venture Limited, Federal Republicof Nigeria, Attorney General of the Federation, Federal Ministry of Finance, Federal Ministry of Trade and Investment, Board of Customs and Excise, Federal Inland Revenue Services, and Nigerian Port Authority.

Dangote Cement Plc, through its lawyer, Oluwakemi Balogun, SAN, is seeking a declaration of the court that the President and Commander-in-Chief of the Armed Forces of the Federal Republic of Nigeria, lacks the power to waive, alter or revise the provisions of the Value Added Tax Act, Cap. V1, Laws of the Federation, 2004, without the legislative approval of the National Assembly.

It also seeks an order of perpetual injunction against the three defendants from importing into Nigeria any quality of bulk or bagged cement except as newly approved by the appropriate authority under the current fiscal tax policy stipulation in force.

In an affidavit sworn to by one Ekanen Etim, principal officer of Dangote Cement Plc, it was alleged that in 2002, the Federal Government formulated the backward integration policy whereby quota for importation of cement was to be allocated based on proven investment by operators in the industry, a qualification, which Dangote Cement alleged Ibeto and two other defendants in this suit neverhad.

However, with the ushering in of new administration in July 2007, Ibeto applied for import allocation, falsely claiming to have satisfied the modalities. It was granted allocation of 1.5million metric tons of cement per annum to be at 5 per cent import duty and tax free under the backward integration.

Consequently, Dangote Cement petitioned the then President Alhaji Musa Yar’Adua, about the unfair advantage. The President then directed all cement importers to operate under the same concessions.

It was alleged also that barely four days after the fiscal policy was issued, Ibeto pre-emptily sought a restraining order from the court and deliberately and fraudulently suppressed the fiscal policy regime of 2008, 2009, and, 2010. Ibeto further filed terms of settlement which was entered as consent judgement in the suit, but deliberately suppressed the fiscal policy.

By the said judgement, Federal Government was to pay Ibeto $40m and N1.9bn, being the verified claims by the inter-ministerial committee for losses suffered by Ibeto from the unjustified closure of its bagging plant in December, 2005. Federal Government and six of its agencies who are other defendants in their counter-affidavit deposed to by one Emmanuel Joel, an Assistant Litigation Officer in the law firm of Kenna Partners, contended that Dangote Cement Plc’s suit was designed to wipe out competition and level playing field, and to leave it as a monopoly in the cement industry.

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