Don’t let your maritime claim expire

 

Introduction

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. A limitation bar, which arises on the expiration of a limitation period, effectively negates the enforcement of a claim, no matter how meritorious. In other words, 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. In order to avoid such a scenario, claimants must take active steps to enforce their maritime claim in court once it arises (or soon afterwards). For certain claims, the prescribed limitation period may be extended.

Collision claims

Parties which have a claim or lien against an erring ship or its owners which arose from a collision caused by that ship must commence judicial proceedings within two years from the date on which the claim arose (ie, the date of the accident). Collision claims normally encompass:

• damage or loss to a ship, its cargo or freight or any property on board; or
• loss of life or personal injuries suffered by a person on board.

Such damage must be:

• the fault of another ship, whether wholly or partly at fault; or
• in respect of any salvage services, rendered as a result of the collision.(1)

Despite the above, a court of competent jurisdiction may extend this prescribed two-year limitation period on such conditions as it deems fit. In order to benefit from this extension, a claimant must satisfy the court that, during the limitation period, it had no reasonable opportunity to arrest the defendant ship:

• at any port in Nigeria;
• within three miles from Nigeria’s coast; or
• within the jurisdiction of the country to which the plaintiff’s ship belongs or in which the plaintiff resides or has its principal place of business.

Once this requirement has been fulfilled, the court may exercise its discretion to extend the limitation period beyond two years to the extent necessary to give the claimant the opportunity to arrest the defendant ship.(2)

Maritime liens

A maritime lien is a privileged right or claim against a vessel or other maritime property which attaches to a vessel permanently, regardless of a change in the vessel’s ownership or possession. Maritime liens consist of claims for:

• the wages of a crew member or master;
• a master’s disbursements;
• loss of life or personal injury arising from the direct operation of a ship;
• salvage, wreck removal and contribution in general average; and ports, canals and other waterways, dues and pilotage dues. (3)

A maritime lien extinguishes one year from the date on which the claims secured by the lien arises. This limitation period may not apply if the ship was arrested and the arrest led to proceedings for a forced sale before the limitation period’s expiry. (4)

Salvage claims

Where a party provides assistance or helps to recover another party’s ship or cargo in peril at sea, it may bring an action to enforce payment for the services rendered. In order to benefit from a salvage claim, judicial or arbitral proceedings must be commenced within two years from the date on which the salvage operations were concluded. However, the court may extend the limitation period if the claimant can show that it was impossible to arrest the vessel assisted or salvaged in Nigeria. Further, at any time during the limitation period, a party against which a claim for payment is made may, by a declaration to the claimant, extend the limitation period, thereby entitling arbitral or judicial proceedings to be commenced after the two-year period. (5)

Cargo claims

The Hague Rules (6) apply by reason of statute (7) to the outward-bound carriage of goods from a Nigerian port. The rules also apply where parties have by their contract (via a clause paramount) incorporated it to govern their carriage transaction irrespective of the port of origin. Under the Hague Rules, a party that claims for a loss, damage or short landing of its goods will lose its claim if it fails to commence an action in court within one year. The relevant date for calculating the time period is the date on which the goods were discharged by the vessel (and not the date on which the vessel arrived at the port (8) or the date on which the cause of action arose).(9) Where a claimant’s goods are lost or damaged on account of the negligence, fault, or failure of the carrier in its duties, the carrier will not be entitled to rely on the one-year rule to shield it from liability thereof.(10)

Other claims

For other maritime claims whose limitation periods are not specifically prescribed in any enactment or law, a general three-year time bar (which begins from the date on which the cause of action arises) applies. (11)

Comment

All maritime claims are time barred by nature, and claimants must take this into account in deciding when to institute an action. Even where settlement talks are ongoing between parties, claimants are advised to institute a claim concurrently in court before the limitation period expires, as time does not cease to run against a claim simply because parties are engaged in negotiations. Ultimately, it is always safest to err on the side of caution.

For further information on this topic please contact Enare Erim at Akabogu & Associates by telephone (+234 1460 55550) or email (enare@akabogulaw.com). The Akabogu & Associates website can be accessed at www.akabogulaw.com.

Endnotes

(1) Section 343(1) of the Merchant Shipping Act 2007.

(2) Section 343(3) of the Merchant Shipping Act.

(3) See Section 5(2)(3) of the Admiralty Jurisdiction Act 1991 and Section 67 of the Merchant Shipping Act.

(4) Section 73 of the Merchant Shipping Act.

(5) See Section 399 of the Merchant Shipping Act.

(6) The Nigerian courts have held that the Hague Rules, rather than the Hamburg Rules, apply to carriage of goods by sea transactions in Nigeria. See Classic Sparko Investment & Shipping Inc v Pacific Atlantic Line Inc (unreported), FHC/l/CS/1151/2011 and Megaplastics industries limited v MV “Kota Halus” (unreported), FHC/l/CS/1436/2012.

(7) Carriage of Goods by Sea Act 2004.

(8) NNSL V Emenike (1987) 4 NWLR (pt 63) 77.

(9) While the former normally occurs before the date of discharge, the latter may occur after.

(10) Caroline Maersk V Nokoy Investment Ltd (2002) 12 NWLR (pt 782).

(11) Section 18 of the Admiralty Jurisdiction Act.

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