• Reaffirm their Partnership

Daniel Terungwa

Samsung Heavy Industries (SHIN) Nigeria Limited and LADOL Integrated Logistics Free Zone Enterprise (LADOL) have executed a settlement that resolves the historic and outstanding issues currently before the Nigerian and international courts to bring the two sides back together in a lasting partnership.

This comes after over three years of dispute between both parties. A joint venture between SHIN and LADOL was established after SHIN was awarded the $3.3billion Egina FPSO project which required the construction of the fabrication and integration yard to carry out the in-country aspect of the Egina Project.

However, the friction between the two parties began in 2018 and lingered on, leading to total breakdown of communications and engagements between the two parties resulting in the court proceedings in 2018.

SHIN and LADOL have welcomed the recent settlement agreement, which will be registered as an official Judgment in the High Court in London. The agreement will also be registered in the respective courts in Nigeria.

In addition, the settlement agreement has been approved by the Nigerian Ports Authority (NPA) and the Nigerian Exports Processing Zones Authority (NEPZA).

The settlement agreement confirms that the Shareholders Agreement between SHIN, SHI-MCI, and MCI FZE Yard Development Limited (MCI), dated 1 July 2014 remains valid, and the current shareholding of SHI-MCI is held in the following proportions: SHIN 70% and MCI 30%.

Reacting to the development, the Chairman of LADOL Mr Ladi Jadesimi, expressed satisfaction over the amicable resolution of the crisis, stating the benefits to the Nigerian economy. He restated LADOL’s commitment towards supporting a range of developments and industries in the LADOL Free Zone and thereby ensuring Nigeria becomes a sustainable industrial hub in Africa.

“This settlement brings to an end the dispute between the LADOL and SHI Groups, which has been lingering for a little while. It became critical that it be sorted out. Now it has been completely resolved, the key thing is that we have been able to come back together peacefully cementing a far stronger joint venture going forward. LADOL will continue to invest in and support a range of developments and industries in LADOL Free  Zone from agriculture to green energy, ensuring Nigeria becomes a sustainable industrial Hub in Africa,” he reiterated.

The Managing Director of SHIN, Mr Jejin Jeon, in delight, stated that, SHIN through its operations at LADOL free zone contributes to the economic development of Nigeria through job creation and training.

He said, “After many years of legal proceedings that have severely hindered SHIN’s ability to operate in Nigeria and threatened its contribution to Nigerian employment and the economy, this settlement is a definitive statement in favour of SHI-MCI’s right to operate in the LADOL Free Zone.

“In recognizing that Samsung Heavy Industries (Nigeria) lawfully holds 70% of the shares in SHI-MCI, the settlement acknowledges our extraordinary contribution to the LADOL Free Zone and its role in the economic development of Nigeria.”

He further noted that before the Egina project, most maritime construction for African oil and gas projects took place outside of Africa as Nigeria did not have the capacity to fabricate and integrate an FPSO locally.

“Thanks to our investment in the SHI-MCI yard, we have established Nigeria as a fabrication and integration hub on the African continent.

“In over 6 years, SHIN has trained 600 Nigerians from disadvantaged backgrounds in a comprehensive welding qualification programme, in one of the most advanced welding academies in Nigeria. This has contributed to 560,000 man hours of training in total.

“In addition, SHIN has directly employed 2,500 Nigerians with a further 5,000 employed by our suppliers, working in highly specialized skills and roles. This has moved the dial in practical terms – with the local contribution rising from sub 1% to over 25%,” he buttressed.

According to Jeon, SHIN “plans to make Nigeria the hub for fabrication and integration works by supporting the oil and gas industry and infrastructure development and ensuring SHI-MCI’s participation in future fabrication and integration projects. SHIN is deeply committed to ongoing and future projects in Nigeria and as part of SHI-MCI, we plan to invest in future projects in the coming year and remain focused on creating and delivering mega deep offshore projects for Nigeria.” he stated.

As shareholders of SHI-MCI, both SHIN and LADOL expect a conducive environment for uninterrupted business activities without any disruptions or challenges to operate at the LADOL Free Zone.

Samsung looks forward to achieving its future mega deep offshore projects for the mutual benefit of both parties under SHI-MCI.

SHIN and LADOL commended both NEPZA and NPA for facilitating and achieving this milestone agreement with the promise to ensure that it lives up to its expectations by supporting and monitoring both parties.