The Ports and Harbours Authority Bill recently passed its third and final reading in the Senate. The bill's objectives will resonate with followers of Nigeria's port reform efforts, as they clearly demonstrate an intention to give legal status to the landlord port management and administration model adopted by the government in 2006. The bill thus addresses some of the legal issues that have resulted from the inadequate statutory provisions that support Nigeria's so-called 'port concessions era'.
A court of appeal sitting in Lagos State recently declared that the collection of the shipping line agency charge (SLAC) by shipping companies and its subsequent levy on importers and consignees was illegal. This judgment clarifies that shipping agency charges are illegal in Nigeria. The Nigerian Shippers' Council is now expected to recover the SLAC collected by the shipping companies, as ordered by the court.
Two recent Supreme Court decisions provide case law on the fact that, as regards carriage of goods by sea claims, concurrent rights to sue in tort as well as under the contract may coexist for a claimant's benefit. However, English cases admit to the concurrent liabilities position certain exceptions that the Supreme Court, which substantially referenced an English Court of Appeal decision in one of its decisions, failed to point out.
When shipwrecks occur, they often pose navigational and environmental hazards and thus their urgent removal is necessary. Nigeria has had its fair share of wrecks, and in response the Nigerian Maritime Safety and Administration Agency recently directed that all abandoned ships should be removed from Nigerian territorial waters.
Certain government agencies in Nigeria are empowered to detain vessels operating within the country's territorial waters. Detention is mostly used to enforce regulatory compliance and secure the payment of statutory dues at the nation's various ports. In order to avoid vessel detention in Nigeria, it is necessary to identify the circumstances in which such a detention can arise.
The National Assembly enacted the Coastal and Inland Shipping (Cabotage) Act in 2003 to enhance indigenous participation in the maritime sector. Despite its commendable provisions targeted at developing Nigerian tonnage, the act has its shortcomings. As such, the legislature recently proposed the Coastal and Inland Shipping (Cabotage Act) (Amendment) Bill, which significantly amends the existing law.
On becoming a contracting state to the Hamburg Rules, any state party to the Hague Rules must notify the Belgian government of its denunciation of the latter. Nigeria failed to fulfil this requirement and, as a result, the invalidity of the Hague Rules in Nigeria has been questioned. Two unreported Federal High Court cases on this matter have recently come to light due to their controversial implications.
In a recent ruling, a Federal High Court judge held that there is no limitation period for claims brought within the admiralty jurisdiction that are enforceable in rem. Taken literally, this decision could have significant practical consequences, as proceedings could effectively be brought at any time. In the case at hand, the proceedings stemmed from events that had occurred 10 years earlier.
Following an executive order confirming it as the economic regulator of Nigeria's ports, the Nigerian Shippers' Council recently issued standard operating procedures (SOPs) that apply to various port users and operators. The SOPs are expected to streamline port activities significantly and ensure improved efficiency and greater value for money. They may also reduce the number of disputes and litigation brought by port users that are unhappy with the services provided by operators.
The draft International Convention on Foreign Judicial Sales of Ships and their Recognition is being developed and Comite Maritime International intends to submit it for consideration as an international maritime convention. While the Nigerian Admiralty Jurisdiction Procedure Rules have laid the groundwork for the convention to some extent, it should solve a number of problems faced by purchasers following a foreign judicial sale.
The Department of Petroleum Resources' bunkering guidelines apply to all vessels engaged in bunker fuel business or trade within any part of Nigeria's territorial or internal waters. They regulate all matters pertaining to bunkering, including the issuance of licences. Any party intending to participate in bunkering operations must obtain a bunkering licence. Failure to do so can incur a penalty of $1 million and criminal prosecution.
Due to their relatively conflicting provisions, the continued co-existence of the Hague Rules and the Hamburg Rules has generated confusion among ship and cargo owners. Although the Hamburg Rules adequately and equitably regulate carriage of goods by sea transactions in Nigeria, steps should be taken to formally denounce the Hague Rules to clarify the subject for those who may still be confused.
The Federal High Court recently convicted a vessel and its crew of charges that included conspiracy to deal, dealing with, attempting to export and storing crude oil without lawful authority or a licence. In convicting the vessel and crew, the court relied on the fact that the defence's ship-to-ship transfer claim was neither proven nor supported by International Maritime Organisation or Lloyds List data.
Claims for delay are not limited to the terms of a charterparty. Another class of claims can be founded on tort, negligence or contract and brought by or against parties not named in a charterparty. Extra-charterparty delay claims are important in a jurisdiction such as Nigeria, where factors that result in delays are frequent and may not be adequately handled by claims founded on a charterparty.
The principle of subrogation – now a universally recognised component in almost every insurance contract – is where an insurer, having indemnified an insured, acquires all the rights and remedies of the insured with respect to the subject matter of the damage. The Marine Insurance Act clearly vests a recognised legal right of subrogation on the insurer. A party need only establish a recognised legal right and the courts will enforce it.
A ship intended for use in the Nigerian cabotage trade must be registered as a bareboat vessel. The Coastal and Inland Shipping Cabotage (Bareboat Registration) Regulations set out guidelines and criteria for the registration of bareboat vessels, including the eligibility requirements, the obligations of a registered vessel, the application of private law provisions and the grounds for refusal or termination.
The Federal High Court recently held that while the Nigerian Navy can arrest vessels suspected of involvement in oil theft or illegal bunkering, it does not have unfettered power to detain vessels beyond the period prescribed by law. The judgment sets a precedent for shipowners and practitioners in similar situations where the navy has acted arbitrarily when detaining ships.
The recent banning of certain oil tankers from trading in Nigeria was a shock for the industry. The vessels have since been re-admitted under the condition that they comply with the law. In the interests of due diligence and risk management, vessel owners and parties with interests in ships operating in Nigeria should be properly acquainted with the relevant rules.
The government recently banned 113 oil tankers from doing business in oil terminals in Nigerian territorial waters. Industry sources have stated that the ban may be connected to the misappropriation of crude oil. This alleged breach has heightened the focus on the legislation regarding Nigeria's territorial waters and the relevant international conventions to which it is a signatory.
The Nigerian Maritime Administration and Safety Agency recently revised the schedule for the phase-out of single-hull tankers operating in Nigeria. From a risk assessment viewpoint, operators of single-hull tankers that wish to take advantage of the extension should ensure that such tankers are limited at all times within Nigerian territory.