Legal Advisory Notice to Importers and Clearing Agents

Logistical and regulatory measures resultant from the COVID-19 pandemic have exacerbated long standing problems associated with cargo clearance from Nigerian ports. In many cases, they have led to unanticipated losses which in turn have engendered a trend of increasing dispute situations among cargo owning, carrier and terminal operations interests.

Following enquiries, we have received from some of our clients as well as reactions elicited from participants in a stakeholder’s webinar on the subject which was facilitated by us recently, we offer the following advisory to importers and clearing agents on some increasingly problematic issues affecting cargo clearance in Nigeria.

1. Container deposits Shipping Companies are entitled to charge the approved rates of container deposits against the safe return of their shipping containers. By virtue of a judicially upheld collective industry agreement and practice, prompt and full refund of the deposit must be made upon due return of the relevant empty shipping container.

Where such a refund is denied or delayed, the consignee or his agent may bring an action to recover it together with associated costs and damages. Where claims for refund of container deposits are made as liquidated money demands, the claimant can be availed of relatively quick and straight forward procedural mechanisms of different courts which exercise jurisdiction over such matters.

2. Storage Charges There exists judicial pronouncement (currently on appeal) that the rate of storage charges which terminal operators may impose on consignments must not exceed what has been formally approved under the existing law and Memorandum of Understanding. While all operators – particularly terminal operators – are 

advised to seek to harmonize the actual charges with the prescribe rates, clearing agents and importers need to preserve all relevant documentary evidence of charges which are at variance with the prescribed rates pending a final determination of the landmark appeal referred to earlier.

3. Delays occasioned by transfer of consignments to off dock locations Considering that most standard form bills of lading permit carriers to transfer consignments to off dock locations, importers and their agents ought to take note of, and in all relevant cases activate contractual or statutory provisions requiring the said carriers to provide regular and precise notification of location of the cargo. Where adequate notification in this regard is not provided, demurrage liability can be avoided or disclaimed.

4. Under-declaration of Cargo Value to Customs The Federal High Court recently held that the fact that the value of cargo lost or damaged by a terminal operator was under declared to customs will not mitigate the liability of the said terminal operator for its full value. The Court however also noted that under-declaration amounted to a serious offence which if proven will lead to the conviction of the implicated importer and/or his agent.

Options and Way forward A significant proportion of otherwise excellent claims for either refund of deposits, challenge of imposed charges, delay, loss or damage to cargo are left unexplored annually on account of improper processes, documentation as well as general apathy towards and ignorance about institution of such claims. As extant economic realities exert more pressure on bottom lines and margins, operators are advised to avail themselves of the claim’s options which with proper guidance and adequately preserved evidence need not be cumbersome or unduly costly.

This advisory is provided for general information purposes and is not issued or intended as legal advice for any specific set of facts or circumstances. It is not and should not be taken or relied upon as legal advice. You may contact Akabogu & Associates for advice on any specific set of facts or circumstances which shall be separately reviewed on its merits.

For any enquiries on the subject or related matters, you may contact us through the following emails: info@akabogulaw.com or emeka@akabogulaw.com