A Federal High Court judgment has drawn a significant line around the power of the Nigeria Customs Service to classify and auction imported goods. The court held that an importer should not lose property because government agencies kept the cargo under security investigation for years, awarding $150,000 after Customs auctioned equipment meant for a federal rice-processing project.
The Federal High Court in Lagos has ordered the Nigeria Customs Service to pay $150,000 in special damages to MV Agro Engineers Nigeria Limited and its Indian sister company, MV Agro Engineers Pvt Limited, after finding that Customs unlawfully auctioned part of their imported agricultural equipment.
Justice Daniel Osiagor also awarded ₦500,000 in general damages, with 10 per cent post-judgment interest until the judgment sum is fully paid.
The dispute arose from six containers containing specialised equipment imported for a Federal Government rice-processing project.
According to the applicants, the equipment arrived through Apapa Port in 2020 and was valued at approximately $502,500.
The companies said the goods were meant for a Federal Ministry of Agriculture and Rural Development project involving the design, manufacture and construction of integrated rice-processing plants.
Although the companies obtained an import-duty exemption certificate, the shipment subsequently became subject to an investigation by the Office of the National Security Adviser.
The companies told the court that the security investigation lasted for years before the ONSA eventually authorised release of the cargo.
Despite that approval, they alleged that Customs continued to withhold the shipment and eventually auctioned one of the containers without notifying them that the goods had been classified as abandoned or overtime cargo.
Customs denied wrongdoing and maintained that the cargo had become overtime goods because it was not cleared within the prescribed period.
Justice Osiagor rejected that argument.
The court held that the period during which cargo remained under a government security investigation should not be counted against the importer when determining whether the goods had become overtime cargo.
The judge also faulted Customs for failing to produce the alleged court order which the Service said had authorised condemnation and auction of the container.
The court found that the import-duty exemption and security clearance both existed before Customs allocated the container to an auction buyer.
Justice Osiagor consequently held that the auction interfered with the applicants’ constitutional right to own property under Section 44 of the 1999 Constitution.
The judgment could become significant for importers whose cargo remains trapped at Nigerian ports because of investigations or regulatory delays beyond their control.
Customs has, however, appealed the decision.
The Service is asking the Court of Appeal in Lagos to set aside the judgment, maintaining that the goods had already become overtime cargo and disputing both the trial court’s interpretation of the timeline and the award of $150,000 in damages.
The appeal means the legal principles arising from the dispute may receive further appellate consideration.
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SOURCE:
THISDAY — Court Declares Customs Auction Unlawful, Awards $150,000
