Maritime Claims/FAQ

ARREST: HOW DO I ARREST A SHIP?

In order to arrest a ship, you have to institute an in rem action against the ship in the judicial division covering the area where the ship or port is located.

A motion ex-parte disclosing a strong prima facie case for the arrest of the ship may be filed at the same time. The application for arrest will be accompanied by:

Exhibits supporting the claim
An undertaking to indemnify the ship against wrongful arrest
An undertaking to indemnify the Admiralty Marshal for the expenses of the arrest
An affidavit of urgency stating facts why the application must be heard expeditiously

Where the motion is heard and granted, a warrant of arrest will be issued. The warrant of arrest is usually served alongside the writ of summons and statement of claim by affixing sealed copies of the processes to a mast or some other conspicuous part of the ship. Copies of the said processes must also be served on the appropriate officers of the Nigerian Ports Authority (e.g the Chief Harbour Master, Port Manager, Traffic Manager etc.)

All claims enforceable in rem can be brought by way of arrest. These will include: claims for possession, ownership and mortgage of a ship or its freight as well as maritime liens. It also includes claims arising in connection with a ship where the person who would be liable on the claim in an action in personam is the owner or charterer of or in possession or in control of the ship at the time the when the cause of action arose. Section 2, Admiralty Jurisdiction Act (AJA)

ARREST: WHAT STEPS SHOULD I TAKE IN RELEASING MY SHIP FROM ARREST?

An application for release of a ship from arrest can be made to the court pursuant to the Admiralty Jurisdiction Procedure Rules of the Federal High Court of Nigeria. The application must be served on the arrestor and will usually be accompanied with an affidavit evidencing the fact that acceptable security to cover the arrestor’s claim has been provided. A ship may also be released if the Defendant’s counsel is able to show that the arrest was invalid for a range of reasons including the claim not being a maritime claim or where the owner of the ship is not the ‘relevant person’.

ARREST: AM I BOUND TO PROVIDE THE EXACT TYPE OF SECURITY DEMANDED BY THE ARRESTOR?

No. The power of the court to order the release of a ship or other property upon provision of sufficient security for the claim of the arrestor is a discretionary one. Where the particular kind of security has been demanded, the court will usually have regard for it. To convince the court to accept security different from that which was demanded, the owner will have to show that the said security is sufficient to cover the claim or the value of the ship (whichever is less) and that it will be readily available to the claimant in the event that his claim succeeds.

ARREST/CARGO: MY SHIP IS LADING WITH ARRESTED CARGO. WHAT DO I DO?

Where cargo on board a ship is under arrest but the ship is not, a person who is entitled to immediate possession of the ship may apply to the Court to discharge the cargo from the ship.

BUNKER CLAIM: IS IT POSSIBLE FOR A BUNKER SUPPLIER (WHETHER PHYSICAL AND/OR CONTRACTUAL) TO ARREST A VESSEL FOR A CLAIM RELATING TO BUNKERS SUPPLIED BY THEM TO THAT VESSEL?

Bunkers are categorised as goods or materials supplied to a ship for its operation or maintenance. A claim in respect of bunkers supplied to a ship is a maritime claim under the Admiralty Jurisdiction Act. Where such is not paid for, the supplier may bring an action under Section 2(3)(k) of the Admiralty Jurisdiction Act against the vessel. He can equally arrest the vessel if within jurisdiction.

In Tawa Petroleum Products Co. Ltd. & Anor v The Owners of M.V Sea Winner & ors “The Sea Winner” the Court noted that “material supplied to a ship for her operation or maintenance obviously will include any class of oil and an action will not only lie for its claim but the Court has jurisdiction to determine the issue.” The underlying words are ‘supplied to a ship for its operation.’ Although this situation will most definitely arise out of contract, disputes arising out of its non-performance or half-performance will surely be dealt with by the Admiralty Court.

BANK GUARANTEE: IN RELATION TO MARITIME CLAIMS, WHAT FORM OF SECURITY IS ACCEPTABLE; FOR EXAMPLE, BANK GUARANTEE, P&I LETTER OF UNDERTAKING.

In relation to maritime claims especially ones leading to the arrest of a vessel, vessel owners usually take rapid steps to ensure that the vessel is released. In Nigeria, various forms of securities are available to litigants. Order 13 rule 2 of the Admiralty Jurisdiction Procedure Rules give the various forms the security may take. These are; deposit of the sum specified by the Court, a guarantee or undertaking supplied by a Protection & Indemnity Club, an insurance company of repute or a bank. Once security has been provided, the procedure to be adopted is as spelt out in Order 10 rule 5 which provides; where a ship or other property is under arrest in a proceeding and the Court is satisfied that –

an amount equal to –

(i) the amount claimed; or

(ii) the value of the ship or property, whichever is the less, has been paid into Court; or

a bail bond for an amount equal to –

(i) the amount claimed; or

(ii) the value of the ship or property, whichever is the less, has been filed in the proceeding, the Admiralty Marshal may, on written application by the relevant person obtain the authorization of a Judge to release from arrest the ship or other property.

Nigerians usually go for bail bonds or bank guarantees rather than an indemnity from a Protection and Indemnity Club. This has received judicial attention as can be seen from the pronouncement of the Court in MAXWELL EBUBE V GOLD STAR LINE LTD. 2 NSC 266 wherein the Court observed per Ojutalayo J. that:

“Club letters of undertaking though popular in Europe, are sparingly used in this country and have not in any way ousted or abrogated the use of other forms of security – such as bail bond and bank draft guarantee – which are more popular used.”

Enforcement of bail bonds or bank guarantees in Nigeria is easier compared to Club letters. This accounts for their more frequent use. Letter from a P & I club might involve submitting to a foreign jurisdiction in pursuance of the case when victory has been attained.

CABOTAGE COMPLIANCE: WHAT COMPLIANCE POINTS ARE IMPORTANT FOR CABOTAGE TRADE

Nigeria’s cabotage regime requires that vessels used or intended for use in coastal and inland water trade are Nigerian flagged ships wholly owned, built and crewed by Nigerians. Waivers may be granted with regards to any of these requirements however the Nigerian Maritime Administration and Safety Agency (NIMASA), has introduced a new Cabotage Compliance Strategy (NCCS) pursuant to which it no longer considers applications waivers on manning requirement for prescribed categories of officers in vessels engaged in Cabotage trade.

CARGO SHORT-DELIVERY: WHAT DO I DO ABOUT SHORT-DELIVERED/LOST CARGO?

Where cargo is short-delivered or lost, the cargo owner may bring a claim in court against the carrier under the bill of lading to recover the value of that part of cargo that was not delivered or was lost. Where the cargo is lost while under the custody of the terminal operator, a claim may be brought for breach of the contract of bailment and damages may be recovered for the said breach.

CARGO DELIVERY: IN WHAT CIRCUMSTANCES CAN A SHIP OWNER REFUSE TO DELIVER MY CARGO TO ME?

The ship owner may validly refuse to deliver cargo in the exercise of its right of lien on the cargo under the bill of lading for freight or for general average contributions or for all sums due to the Carrier under any other contract as well as for the cost and legal expense of recovering any sums due. The cargo owner may also validly withhold cargo where the cargo owner fails to present a valid bill of lading.

CARGO DAMAGE: IS SHIPPER LIABLE FOR DAMAGE TO SHIP OR OTHER CARGO ON THE SHIP IF HIS CARGO IS COMBUSTIBLE AND CAUSES A FIRE ON THE SHIP?

If the goods are insured under a cargo insurance policy, typically they would be covered for fire damage. The cargo insurer takes over the right to the loss when they pay out the claim. This is known as subrogation. The insurer may then decide to go after the person whose goods exploded depending on the situation. But it is important to note that cargo insurance is only a property policy and does not provide liability coverage if the shipper’s goods are combustible and cause damage to the goods of others or the ship itself.

CARGO ON ARRESTED SHIP: WHAT DO I DO WHEN A SHIP IS ARRESTED WITH MY CARGO ON BOARD?

CAVEAT: WHAT IS THE EFFECT OF A CAVEAT

Part of the procedure required for obtaining the arrest of a ship is that the arrestor must search the caveat register for any caveat against the arrest of the said ship or other property. An arrest or therefor has to show good and sufficient reason for arresting the ship or other property in the face of a caveat.

CHARTER/CHARTERPARTY: WHAT IS THE MOST PREFERRED CHARTER ARRANGEMENT FOR A SHIP FINANCING AND WHY?

Bareboat charters are usually not created with the intention to the carriage of goods but more as part of sophisticated financing arrangement with the intention that the charter should become the owner of the ship at an agreed time. Thus, for a financing bank to lend the funds required to buy the ship, the bank acquires the ownership of the ship but bareboat charters it to the borrower for the period of the loan. This would allow the bank avoid the operational liabilities with respect to the ship.

CIF: IF SALE IS CONCLUDED ON CIF TERMS, WOULD THERE BE A NEED TO PROCURE ADDITIONAL MARINE CARGO INSURANCE?

The answer depends on the terms of that insurance. Usually, with a CIF Incoterm the shipper is required to provide the buyer with insurance, which is insured on the buyer’s behalf. The next question would be whether the terms of the insurance ‘fully’ covers in the case of a loss. If the answer is no, it is advisable to buy additional insurance in the nature of a ‘supplemental policy’ which would take over where the CIF terms run out. Nigeria’s law require that an importer buys insurance from Nigeria, and this requirement may not be satisfied where the insurance is included in the foreign purchase transaction.

CARGO CLAIM PRINCIPLES: WHAT ARE THE KEY PRINCIPLES APPLICABLE TO CARGO CLAIMS BROUGHT AGAINST THE CARRIER?

As a matter of statute, the Hamburg Rules govern both inward and outward shipment of cargo while the Carriage of Goods by Sea Act, 2004 applies only to outward shipment of cargo. The Hague rules may however apply to inward shipment of cargo by reason of a clause paramount in the bill of lading contract between the carrier and the consignee. By Article 3 rule 6 of the Hague Rules, a written notice of loss or damage to cargo must be given to the carrier at the port of discharge prior to or at the time the person entitled to delivery of the goods takes custody of same. Where the loss is not apparent, the notice must be given within three days. Where the cargo is removed without such notice, its removal constitutes prima facie evidence of the delivery of the goods in good condition by the carrier. Also, a claim for loss or damage to cargo against the ship abates if it is not instituted in court within one year from the date the goods were delivered, or ought to have been delivered. Article 20 rule 14 of the Hamburg Rules prescribes a one year limitation period. Unlike the Hague Rules, the Hamburg Rules requires that notice of damage be given to the carrier within one day from the date of delivery. The carrier, shipper, consignee and endorsee are the only persons entitled to sue on the bill of lading. A mere notify party cannot sue on same. A breach of the terms of a contract of carriage could give rise to a concurrent right in tort against the carrier in appropriate circumstances. A cargo claimant is at liberty to decide how to found his claim whether in contract or in tort. The carrier is usually entitled to limit his liability in line with the bill of lading.

However, the carrier may lose his right to contract out of his liability where the cargo claimant is able to establish negligence against him in the performance of his contractual duties.

COLLISION: WHAT ARE THE LAWS GOVERNING COLLISIONS?

The Merchant Shipping Act, 2007
The Admiralty Jurisdiction Act
Merchant Shipping Collision Rules
The International Regulations for Preventing of Collisions at Sea 1972
The Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels 1910 is not applicable in Nigeria.

COLLISION/CAUSALTY: WHAT ARE THE AUTHORITIES’ POWERS OF INVESTIGATION / CASUALTY RESPONSE IN THE EVENT OF A COLLISION, GROUNDING OR OTHER MAJOR CASUALTY?

Section 49 of the NIMASA Act empowers the Director General of NIMASA to set up a Marine Casualty Investigation Committee with powers to do the following;

Identify the circumstances, reasons and consequences of a marine casualty;
Identify the persons at fault in a marine casualty; and
Develop measures for the prevention of marine casualties on the basis of experience gained in the course of the investigation.

Section 426 of the Merchant Shipping Act empowers the Minister of Transport to appoint an inspector to hold a preliminary inquiry immediately after a marine casualty to inquire into the cause and reason for same. The appointed inspector is empowered to board and inspect the ship or any part thereof as well as examine witnesses in relation thereto and obtain all books, papers, documents which he considers vital to his report.

The Maritime Board is empowered to make formal investigations into any casualty in respect of which reports have been submitted to the Minister or to inquire into charges of incompetence or misconduct on the part of any officer of a ship. Where the Board holds a formal investigation, it is equivalent to a court of summary jurisdiction and for such purpose has and may exercise all the powers of a Magistrates’ Court. The Board may suspend or cancel the certificate of the officer of the ship responsible for the casualty. However, an inquiry cannot be held into any matter which has once been the subject of an investigation or inquiry, other than a preliminary inquiry, and has been decided on by a competent court or tribunal in Nigeria or elsewhere, or in respect of which the certificate of any officer of a ship has been cancelled or suspended by a court of competent jurisdiction.

DELAYED CARGO: CAN I CLAIM DAMAGES IF MY CARGO IS DELIVERED LATE?

The conditions of carriage at the back of the bill of lading usually exclude liability for late delivery. In these cases, it may be difficult to recover damages on this ground having contracted your right away. However, if the circumstances surrounding the delay in delivery is such that negligence may be reasonably inferred (example where the cargo is lost by the carrier but eventually found and delivered afterwards), then damages may be successfully claimed by the cargo owner against the guilty carrier on the basis of negligence.

DEMURRAGE: THE DEMURRAGE CHARGE I PAID WAS UNJUST. WHAT CAN I DO?

Where demurrage was unjustly paid, the innocent party may bring against the ship owner a claim for money had and received to recover the sum unjustly paid. In order to secure its claim, the innocent party may also commence arrest proceedings against the ship itself or institute and action in personam.

DISCLOSURE: WHAT ARE THE GENERAL DISCLOSURE OBLIGATIONS IN COURT PROCEEDINGS?

The extent of documents required to be disclosed by a party depends on the claim. Parties in court proceedings are required at all times to disclose all documents in its control in respect of the claim even when it does not support their case. The rationale behind this is to avoid last minute surprises and to avail both parties the opportunities to gain clarifications on particular issues. By law, every party is under obligation to produce;

Documents in his possession or control
Documents which such person is legally bound to produce. Note that the law requires a notice to produce be given to such party.
Documents he has right to inspect.

It is pertinent to note that where the actual document has been destroyed, lost, not easily moveable or is a public document the Evidence Act allows for secondary evidence or the party to come to Court and explain the reason why such document cannot be produced.

DISPUTE RESOLUTION: WHAT INSTITUTIONS AND RULES APPLY TO ARBITRATION OF MARITIME DISPUTES IN NIGERIA?

MARITIME ARBITRATION – Arbitration in Nigeria is governed by the Arbitration and Conciliation Act 1988 essentially based on the UNCITRAL Model Law of International Commercial Arbitration of 1985 providing for the conduct in an arbitral proceeding. It provides for expediency and effectiveness in dispute resolution and as earlier noted time is of essence in maritime claims. The Federal High Court has jurisdiction over claims on the enforcement of indigenous/foreign arbitral award in respect of proprietary maritime claims. In Nigeria, the Maritime Arbitrators Association in Nigeria (MAAN) was founded by lawyers and other practitioners who have developed expertise in commercial arbitration. MAAN was set up in 2005 to promote and preserve standards in the practice of maritime arbitration, seeking to ensure that the enabling legal environment is arbitration-friendly and complies with internationally acceptable standards as well as creating a forum for interaction between persons qualified to act as arbitrators and those interested in furthering arbitration as the preferred mode of dispute resolution in the shipping industry. MAAN has developed arbitration rules for short and large claim including a scale of fees and costs. The association also acts as appointing authority and can make its list of alternative dispute revolvers available to organizations or persons.

EVIDENCE/DISCLOSURE: WHAT STEPS CAN BE TAKEN (AND WHEN) TO PRESERVE OR OBTAIN ACCESS TO EVIDENCE IN RELATION TO MARITIME CLAIMS INCLUDING ANY AVAILABLE PROCEDURES FOR THE PRESERVATION OF PHYSICAL EVIDENCE, EXAMINATION OF WITNESSES OR PRE-ACTION DISCLOSURE?

The duty to preserve evidence comes with responsibility not to lose, destroy or intentionally alter document or similar instrument. By application, the Court may as it thinks fit grant an order for the detention, custody or preservation of any property which is a subject matter of the action or inspection of such property of a party to the action.

During trial, when necessary witnesses are required to give an account of how it happened although now all documents are frontloaded and accounts are given by a witness through a statement of oath and then called to adopt it. According to the Evidence Act, examination of witness shall be by the party who calls him then the cross-examination by the other party to discredit the credibility and reliability of such testimony and when required the witness will be re-examined by the party who called him. Re-examination is simply for explanation of matters arising from cross-examination as no new matter is to be raised unless the court permits.

Pre-action disclosure is recognized in Nigeria. Here, a party could either through a formal set of written questions deliver interrogatories to be answered by the other party for clarifications of matters of fact which could help determine prior to trial the facts to be presented or through a written request make discovery of document in possession or custody of other party all of which to be served within seven days of close of pleadings or time prescribed by the court and the other litigant to answer truthfully within seven days of the request.

FIRE: IS SHIPPER LIABLE FOR SHIP DAMAGE AND OTHER CARGO ON THE SHIP IF HIS CARGO IS COMBUSTIBLE AND CAUSES A FIRE ON THE SHIP?

FAST-TRACK CLAIMS: IS THERE A WAY MY CARGO CLAIM CAN BE FAST TRACKED IN COURT?

There is no special fast-track procedure for maritime claims, though judges are urged to be mindful of the nature of such claims where diverse interests of trading ships are involved.

FOREIGN JUDGMENTS: SUMMARIZE THE KEY PROVISIONS AND APPLICABLE PROCEDURES AFFECTING THE RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS

Nigeria is not a signatory to any International treaty or convention for the enforcement of foreign judgments. Domestic statute law as well as common law however govern the recognition and enforcement of foreign judgements in the country. The statutory provisions provide for a regime of registration and enforcement of foreign judgements while at common law, a foreign judgement will give rise to a cause of action enforceable in accordance with several procedural rules of Nigerian courts.

The most important statutory provisions in this regards are are found in The Reciprocal Enforcement of Judgments Ordinance Cap 175 of the Laws of the Federation of Nigeria and Lagos, 1958 (The Ordinance) and The Foreign Judgment (Reciprocal Enforcement) Act Cap C35 of the Laws of the Federation of Nigeria, 2004 (The Act).`

The Ordinance deals with the reciprocal enforcement of judgments obtained in the “United Kingdom and other parts of Her Majesty’s Dominions and Territories under Her Majesty’s protection”. Specifically, a community reading of Section 2 and proclamations made pursuant to Section 5 of the Ordinance establishes its applicability to judgments obtained from superior courts in England, Ireland and Scotland as well as Ghana, Gambia, Sierra Leone, Barbados, Bermuda, British Guiana, Gibraltar, Grenada, Jamaica, Leeward Islands, Newfoundland, New South Wales, St. Lucia, St. Vincent, Trinidad and Tobago and Victoria.

Section 3(1) of the Foreign Judgment (Reciprocal Enforcement) Act empowers the Minister of Justice to make an order extending Part 1 of the Act to any foreign country but the power is however yet to be exercised. Notwithstanding this, Section 10 (a) makes the provisions of Part 1 of the Act applicable to foreign judgments from countries which cannot be recognized under the Reciprocal Enforcement of Judgments Ordinance; so long as the application for recognition and registration of any such judgment is brought within 12 months from the date in which the foreign court delivered the judgment.

The Ordinance and Act both apply to money judgments of superior courts of the relevant foreign country which are final and conclusive between the parties thereto and which must not have been obtained by fraud. Section 3(2) of the Ordinance provides that no judgment shall be ordered to be registered if the original court acted without jurisdiction, the judgment debtor, being a person who was neither carrying on business nor ordinarily resident within the jurisdiction of the original court, did not voluntarily appear or otherwise submit or agree to submit to the jurisdiction of that court, the judgment debtor, being the defendant in the proceedings, was not duly served with the process of the original court, and did not appear, notwithstanding that he was ordinarily resident or was carrying on business within the jurisdiction of that court or agreed to submit to the jurisdiction of that court, the judgment was obtained by fraud. Section 6 (10) of the Act also make similar provision.

A judgment creditor who intends to enforce a foreign judgment under the Act or Ordinance must apply to a Nigerian court for an order to register same. The application must exhibit the judgement or order of the foreign court sought to be enforced. Upon an order of the Nigerian court registering a foreign judgement, the judgement creditor may proceed to enforce same by deploying the various judgement enforcement mechanisms available under the rules of Nigerian Courts.

As already noted, a foreign judgement will at common law give rise to a cause of action upon which a fresh suit may be instituted in a Nigerian Court. A judgement creditor in this regard will typically deployed the summary judgement or undefended list procedure provided for in civil procedure rules of most Nigerian courts.

FREIGHT:

GENERAL AVERAGE: WHAT IS GENERAL AVERAGE?

General average is a right of contribution as between the various interests in a sea voyage. These interests include, the ship (owner), the cargo owners, and the party entitled to freight (owner or charterer). The right arises whenever extraordinary sacrifices have been made or extraordinary expenses incurred by one interest for the preservation of the other interests in the common adventure. The expenses are borne proportionately among all the interests in the voyage and the interest that made the sacrifice or bore the expense would have a right of direct action against the other interests in respect of their proportionate contributions.

Originally, it was a common law right regulated by the law of the port of discharge at which the voyage terminates. However, in most cases, general average is governed by the express provisions of the sea carriage contract, which will usually incorporate the York Antwerp Rules. These are set of rules that establish how general average is to be applied in particular situations.

GENERAL AVERAGE: DOES GENERAL AVERAGE COVER THE LOSS OF THE SHIP ITSELF IF IT SINKS?

If the ship sinks, the voyage is not saved and that is not a general average loss. However, a claim for total loss of the ship can be made under a H&M insurance policy.

GOODS: WHO DO I SUE WHEN MY GOODS ARE DAMAGED OR NOT DELIVERED?

Generally, claims for non-delivery or damage to cargo are directed at the carrier under the bill of lading. The contractual carrier may be identified by reference to the banner heading/logo on the bill of lading or the signature at the foot of the bill of lading. He could be the owner of the ship or the demise charterer. A cargo owner may have an alternative or additional right of claim against the terminal operator where the cargo is lost or damaged while under its care.

HIRE: WHAT DO I DO WHEN CHARTERERS REFUSE TO PAY HIRE?

Where the charterer has defaulted in promptly paying hire, he is in breach and it would not matter that the default was unintentional. The Owner will therefore have a claim against the charterer for this breach and will also have a right of lien on the cargo being carried.

Unless the contract makes express provisions to the contrary, non-payment of hire by charterers will only entitle the owner to treat the contract as repudiated if the default shows a clear intention not to perform the contract. Where this is the case, the owner will be entitled to damages for the charterer’s non-performance of the contract and not for non-payment of hire per se.

Most time charters however contain an express term entitling the owner to withdraw the vessel in event of default. The owner can therefore enforce this term where it exists. Withdrawal of the vessel for non-payment of hire will ordinarily only entitle the owner to any unpaid hire, or oblige him to return insufficient hire. The owner is not entitled to any damages in event of withdrawal.

INSURANCE: WHAT IS TRANSIT INSURANCE AND IS IT COVERED UNDER THE MARINE INSURANCE ACT?

Transit insurance covers goods while in the ordinary transit from one location to another. Often referred to as Warehouse to Warehouse the insured would usually be responsible to provide such coverage on the basis of the sales terms. Nevertheless, coverage starts at the point at which the transit commences, and terminates when goods are delivered to its final destination. Transit insurance comes within the provision of section 4 Marine Insurance Act dealing with “land risks” incidental to any sea voyage.

INSURANCE: ARE WAR RISKS A FORM OF MARINE INSURANCE?

War risks are risks which concern damage to the ship and certain liabilities resulting from acts of war. They are a form of marine peril (section 5(3) Marine Insurance Act), however, a distinction between war risk and marine risk is mainly given effect by a series of exclusions in marine policies designed to ensure that marine insurance policies respond only to traditional marine risks. In the various Institute marine clauses, separate exclusions address war risks so also do the Institute war clauses contain a reciprocal exclusion for hulls and freight. Therefore, in addition to H&M or cargo cover, shipping interests also buy a separate war risk cover.

INSURANCE: HOW DOES AN INSURER RECOGNISE THIRD PARTY LIABILITY?

Third party liability happens where an owner or his crew causes loss or damage to another during the normal incidence of a marine adventure. They include, collision liability, personal injury including death to third party, damage to fixed and movable property, environmental pollution, cargo claims etc. These type of liabilities are usually cover by the owner’s P&I (Protection & Indemnity) Club. In the event of collision liability, H&M insurers usually cover three-fourths of the damage sustained by the other vessel up to a maximum of three fourths of the value of the insured vessel mentioned in the policy (clause 8 ITC (Hulls) 1983), while P&I Clubs cover the remainder beyond the amount covered.

INSURANCE/SUBROGATION: HOW LONG SHOULD AN INSURER WAIT BEFORE TRIGGERING SUBROGATION RIGHTS?

The extent of the rights subrogated by the insurer depends on the type of loss. In cases where the insurer pays for a partial loss the insurer subrogates all rights and remedies the insured would have had against third parties (section 80(2) Marine Insurance Act). On the other hand, where the insurer pays a claim for total loss, the insurer subrogates all rights and remedies the insured would have had against third parties and the also takes over the interest of the assured on the subject matter insured (section 80(1) Marine Insurance Act). Therefore, an insurer may trigger its subrogation rights as soon as any claim is paid out to the assured.

INTERNATIONAL CONVENTIONS: WHAT ARE THE INTERNATIONAL CONVENTIONS AND NATIONAL LAWS RELEVANT TO MARINE CARGO CLAIMS?

The Hague Rules apply in Nigeria as the Carriage of Goods by Sea Act, 2004 (otherwise known as COGSA 2004).

The United Nations Convention on Carriage of Goods by Sea (Ratification and Enforcement) Act 2005 incorporates the Hamburg Rules into Nigerian law. This latter Act merely introduced the Hamburg Rules without expressly repealing and denouncing the Hague Rules as required by Article 15 of the Hague Rules.

As such, both the Hague Rules and Hamburg Rules continue to apply concurrently in Nigeria.

JUDGMENT: SUMMARIZE THE KEY PROVISIONS AND APPLICABLE PROCEDURES AFFECTING THE RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS

JURISDICTION: WHICH COURT SHOULD I FILE MY MARITIME CLAIM?

The Federal High court is vested with original jurisdiction to hear and determine maritime claims.

LAWS: WHAT ARE THE INTERNATIONAL CONVENTIONS AND NATIONAL LAWS RELEVANT TO MARINE CARGO CLAIMS?

The Hague Rules apply in Nigeria as the Carriage of Goods by Sea Act, 2004 (otherwise known as COGSA 2004).

As such, both the Hague Rules and Hamburg Rules continue to apply concurrently in Nigeria.

LIMITATION OF LIABILITY: HOW DO I LIMIT MY LIABILITY IN THE EVENT OF CLAIMS AGAINST MY SHIP

Section 1 (d) of the Admiralty Jurisdiction Act provides that the Federal High Court shall have admiralty jurisdiction in respect of: any action or application relating to any cause or matter by any ship owner or aircraft operator or any other person under the Merchant Shipping Act or any other enactment relating to a ship or an aircraft for the limitation of the amount of his liability in connection with shipping or operation of aircraft or other property.

The Federal High Court of Nigeria thus has jurisdiction to entertain limitation of liability proceedings in Nigeria. A ship-owner who decides to commence a limitation of liability proceedings in Nigeria would be expected to commence his action at a Federal High Court in the Judicial Division where the Defendant resides or where the cause of action arose. Where an action has already been commenced against such a ship owner, an application for limitation of liability pursuant to the relevant enactments may also be validly made to the court.

The Limitation Fund

By Article 11 of the Convention on Limitation of Liability for Maritime Claims “any person alleged to be liable may constitute a fund with the Court or other competent authority in any State Party in which legal proceedings are instituted in respect of claims subject to limitation”. The fund so constituted is only available for the payment of claims in respect of which limitation of liability can be invoked.

LIEN: ARE SHIP MORTGAGES CONSIDERED MARITIME LIENS?

Mortgages on ships are not considered to be maritime liens. Section 67 of the Merchant Shipping Act 2007 lists certain claims that may be secured by way of maritime liens. They include, crew wages, claims for loss of life or personal injury, salvage, wreck removal etc. Furthermore, section 68 states that for the purpose of determining priority maritime liens listed in section 67 rank ahead of mortgages on a ship.

LIEN: WHERE SECURITY IS SOUGHT FROM A PARTY OTHER THAN THE VESSEL OWNER (OR DEMISE CHARTERER) FOR A MARITIME CLAIM, INCLUDING EXERCISE OF LIENS OVER CARGO, WHAT OPTIONS ARE AVAILABLE?

Under this circumstance, recourse may be had to the Court. The procedure to adopt usually will be dependent on the law of the forum, i.e. the lex fori. Usually, the claimant will institute an action in rem or in personam. The in rem action will be instituted in a jurisdiction where the vessel can be found. Where judgment is given against the vessel, execution will be levied accordingly. Where the action is in personam, this is, where it is being directed against the Owner, Charterer or the person operating the vessel, the action is to be commenced where he is to found or where he carries on business.

Other options include detention of the cargo until the claim over it has been satisfied. This is usually referred to as possessory lien. This right is exercisable over properties which came into the possession of the detainee lawfully. Liens of this nature usually arise out of contract, tort or operation of law. Section 5(4) of the Nigerian Admiralty Jurisdiction Act gives a right of action in rem in situations that do not give rise to maritime liens as far as certain conditions are satisfied.

Other categories of lien like the traditional maritime lien travels with the vessel and attaches to it like a leech no matter into whose possession the vessel enters. It can only be extinguished by a judicial sale of the vessel, after which the vessel becomes a new creation free from all encumbrances.

MORTGAGES: ARE SHIP MORTGAGES CONSIDERED MARITIME LIENS?

NIGERIAN PORTS AUTHORITY:
NON VESSEL OPERATING (COMMON) CONTAINER CARRIERS (NVOCC)
OIL TANKER:
PASSENGER CLAIMS: WHAT ARE THE KEY PROVISIONS APPLICABLE TO THE RESOLUTION OF MARITIME PASSENGER CLAIMS?

The Admiralty Jurisdiction Act makes claim for loss of life or personal injuries matters of admiralty. Applicable also, is the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974 and its Protocol of 1990, which is made applicable by virtue of the Nigerian Merchant Shipping Act. Sections 340-341 are instructive in this regard. The Convention on Limitation of Liability for Maritime Claims 1976 and the 1996 Protocol also applies to claims in respect of loss occasioning from delay in the carriage by sea of passengers, their luggage or cargo.

POLLUTION: WHAT ARE THE INTERNATIONAL CONVENTIONS RELATING TO MARINE POLLUTION?

International Convention for the Prevention of Pollution from Ships,1973/ 1978 and the Annexes thereto;
Convention relating to Intervention on the High Seas in cases of Threatened Oil Pollution Casualties, J 969;
International Convention on Prevention of Marine Pollution by Dumping of Wastes and Other Matters, 1972;
International Convention on Oil Pollution Preparedness, Response and Cooperation, 1990;
International Convention on Civil Liability for Oil Pollution Damage 1992;
Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage, J 97 J and its Protocol of 1992;

Basel Convention on the Control of Transboundary Movements of Wastes and their Disposal, 1989.

RETURN CARGO:
REEFER:
TIME TO CLAIM: CAN I BRING MY CARGO CLAIM ANYTIME I WANT?

The enforcement of maritime claims is usually subject to limitation periods which vary in length depending on the nature of the claim. A limitation bar, which arises upon the expiration of a limitation period, effectively operates to negate the enforcement of a claim no matter how meritorious. In other words, once a claim is not brought within the time prescribed by the relevant law or contract, a person with an otherwise valid claim generally loses his right of action on that claim. In order to avoid this, a claimant must take active steps to enforce his maritime claim in court once it arises or soon afterwards. For certain claims, the prescribed limitation period may be extended.

TRENDS: DESCRIBE ANY OTHER ISSUES NOT CONSIDERED ABOVE THAT MAY BE WORTHY OF NOTE, TOGETHER WITH ANY CURRENT TRENDS OR LIKELY FUTURE DEVELOPMENTS THAT MAY BE OF INTEREST.

The Nigerian Maritime Administration and Safety Agency (NIMASA) has announced a five years strategic plan for the cessation of grant of Cabotage waivers.

Nigeria’s Coastal and Inland Shipping (Cabotage) Act 2003 reserves commercial transport of goods and passengers within Nigerian coastal and inland waters to vessel wholly owned and manned by a Nigerian citizens as well as built and registered in Nigeria. Part III of the Act however provides for a legal regime enabling the Minister of Transport to grants applications seeking waivers of any of the above stated requirements of the Law. By NIMASA’s own admission, the bulk of Nigeria’s cabotage trade is operated on one form of waiver or the other.

The planned cessation of grant of these waivers therefore portends a significant shift in policy which may receive further fillip through incorporation into ongoing moves towards amendment the Cabotage Act itself.

UNDERTAKING AS TO DAMAGES: WHAT IS THE RELEVANCE OF UNDERTAKING AS TO DAMAGES IN THE ARREST OF SHIPS?

Before a ship is arrested, the arrestor will be required to provide an undertaking as to damages to ensure that in the event the ship turns out to have been wrongly arrested, the arrestor will be liable to the extent of his undertaking as to damages.

VESSEL: WHERE SECURITY IS SOUGHT FROM A PARTY OTHER THAN THE VESSEL OWNER (OR DEMISE CHARTERER) FOR A MARITIME CLAIM, INCLUDING EXERCISE OF LIENS OVER CARGO, WHAT OPTIONS ARE AVAILABLE?

WRECK: WHAT LAW GOVERNS WRECK REMOVAL IN NIGERIA?

Wreck removal on Nigerian territorial waters is governed by the Merchant Shipping Act 2007 and the Merchant Shipping (Wrecks and Salvage) Regulations 2010 made thereunder. There are no international conventions or protocols presently in force in Nigeria in relation to wreck removal. The Nairobi International Convention on the Removal of Wrecks 2007 is not in force in Nigeria. The convention has been ratified by Nigeria but as it has not been enacted by the Nigerian National Assembly as required by the Constitution, it is not yet law in Nigeria.