Voyaging in West African waters, particularly the Gulf of Guinea, is considered dangerous and raises the question of whether shipowners are entitled to put armed guards on board their vessels to protect them from attacks by arms-bearing third parties. Considering reported attacks of armed robbers at sea, kidnappings for ransom and other criminal occurrences in Nigerian waters, shipowners and operators have explored how to optimise the protection of both ships and cargo.
Shipowners whose ships have caused damage will not want their ship to be arrested, but also will not want to pay damages to the extent of the actual claim. Luckily, shipowners can ensure that their ships are not arrested and at the same time significantly limit the total amount payable. To cap it all off, shipowners do not have to accept liability. If this is not having your cake and eating it, then nothing is.
In a watershed decision, the Supreme Court appears to have overruled itself on the question of what constitutes 'outside jurisdiction' in relation to the Admiralty Court (Federal High Court) for the purpose of determining whether leave of court is required to effect service of an originating process. The decision puts to bed the decade-long unease surrounding the territorial jurisdiction of the Admiralty Court in the wake of MV Arabella.
Following the Federal High Court's recent ruling that claims for crew wages fall outside its jurisdiction, practitioners and other observers are understandably eager for judicial elaboration on the fate of such claims. Although initial reactions appear to be that crew wage claims may no longer be enforceable through the adoption of the in rem procedure, some have argued that the ruling, being merely persuasive, can and should be sidestepped by other Federal High Court judges.
Maritime claims are generally under the Federal High Court's exclusive jurisdiction and enforceable by an admiralty action in rem or in personam. However, in a decision which portends significant implications for Nigeria's maritime jurisprudence, the court recently held that a claim for crew wages fell outside its jurisdiction.
The chief of naval staff has claimed that the recently promulgated Harmonised Standard Operating Procedures on Arrest, Detention and Prosecution of Vessels and Persons in Nigeria's Maritime Environment 2016 (HSOPs) will provide consolidated guidance for the harmonious management of the arrest, detention and prosecution of vessels and suspects, as well as seizure and forfeiture. However, despite the fanfare that accompanied their launch, the HSOPs have no legal potency or operational clarity.
Various questions can arise regarding the service of processes in admiralty proceedings. For example, what happens if a ship (X) is named as the first defendant in a writ of summons, along with a second defendant which is merely referred to as the "owner of X"? Does the action cease to be one in rem? Further, where X is a foreign ship, is leave of court required to effect service on the second defendant? Although a recent Court of Appeal decision is instructive in this regard, it was arguably reached per incuriam.
Maritime claims arise in relation to the ownership, possession, mortgage and general operation of a ship and are primarily enforced by an admiralty action in rem or in personam. Admiralty actions do not last forever; rather, they have prescribed limitation periods, which often vary depending on the type of claim. Thus, if a claim is not brought within the time prescribed by the relevant law or contract, a party with an otherwise valid claim will generally lose its right of action on that claim.
Where a bill of lading holder fails to take delivery within a reasonable time, the carrier may be entitled to land and store the goods at the cost of the bill of lading holder. This common-sense position accords perfectly with the Bill of Lading Act 1856. Although conversion claims based on the creation of unauthorised liens on cargo are maintainable against carriers, cargo holders should remember that this is the case only in specific circumstances.
In a recent Court of Appeal case, the appellant terminal operators challenged the Nigerian Shippers' Council's powers to review local storage charges unilaterally. The judgment gives further judicial impetus to the government's policy intent, particularly with regard to storage operations at the nation's ports. However, it conflicts with an earlier decision by the same court concerning the Nigerian Shippers' Council's role as the economic regulator of the Nigerian ports.
While delay can be expensive for a shipowner which suffers loss where a charterer delays the loading and discharge operation, a charterer should not be made to pay demurrage for such delay where it can be proven that it was not at fault. It is imperative to ensure that, before executing the contract of carriage, both parties are clear on the laytime and clauses regarding where a charterer is relieved of its obligation to pay demurrage.
There appears to be some level of cooperation across the relevant agencies in Nigeria in ensuring that the country's waters are kept safe. However, the lines are blurred with regard to the delineation of these agencies' maritime security functions. As several international instruments to which Nigeria is legally bound call for the preservation of maritime security, it is imperative to understand which agencies should be held accountable for protecting its waters.
The Court of Appeal recently declared the Lagos State House of Assembly competent to make laws relating to intra-inland waterways in the state. The appeal turned on whether the regulation and control of Lagos state intrastate and inland waterways falls under the exclusive legislative list which confers legislative competence on the National Assembly. Contrary to reports, the decision is hardly a win for the Lagos state government.
Although the Convention on the Limitation of Liability for Maritime Claims 1976 has yet to be domesticated in Nigeria, certain laws provide for the limitation of liability in some instances. However, the question remains as to whether the insurer – where the law permits an assured to limit its liability and it makes a claim – must indemnify the assured up to the limit of its liability or to the fullest extent of the policy.
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.