The Federal High Court, Abuja has dismissed a suit seeking to repeal Section 257(2)&(3) of the Petroleum Industry Act (PIA) 2021.
Justice Taiwo Taiwo held that there is no inconsistency in Section 257(2)&(3) of the PIA and Section 36(1) and (2) of the 1999 Constitution (as amended), as contended by the plaintiffs.
The section concerns whether payments made by a settlor under Section 240(2) of the PIA are deductible for hydrocarbon tax and companies’ income tax and under what conditions a host oil community will lose its financial entitlements.
Section 257(2)&(3) of the PIA reads: “Where in any year, an act of vandalism, sabotage or other civil unrest occurs that causes damage to petroleum and designated facilities or disrupts production activities within the host communities, the community shall forfeit its entitlement to the extent of the cost of repairs of the damage that resulted from the activity concerning the provisions of this Act within that financial year, provided the interruption is not caused by technical or natural cause.
“The basis for computation of the trust fund in any year shall always exclude the cost of repairs of damaged facilities attributable to any act of vandalism, sabotage or other civil unrest.”
In a judgment delivered on June 27, 2020, Justice Taiwo held: “The right of the plaintiffs to challenge any action under section 257(2) and (3) has not been extinguished. The Act has not taken away the rights of the plaintiffs to approach the court if it thinks that the decision to deduct any percentage from what is due to the host community has not been well thought out. The provisions of Section 257(2) and (3) are very clear and unambiguous.
“I, therefore, see no inconsistency in Section 257 (2) and (3) of the PIA and section 36(1) and (2) of the Constitution of the Federal Republic of Nigeria.
“The suit ought to be dismissed. The same is accordingly dismissed. This is the judgment of the court.”
