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The law on arresting ships in Nigeria – Part II

The law on arresting ships in Nigeria – Part II

In the first segment of this article, we delved into the introductory part of the arrest of ships in Nigeria. We examined the existing legal framework for arresting ships in Nigeria, as well as the conditions a party has to fulfil to make a valid application to arrest a ship.

In this second part of the article, we explore deeper into the procedural intricacies of ship arrest in Nigeria. Exploring key steps, from invoking the Court’s jurisdiction to the potential vacation of arrest warrants, we also address the arrest of sister ships, judicial sale provisions, ships exempted from arrest, and remedies for wrongful arrest. This comprehensive analysis aims to enhance the understanding and efficiency in navigating maritime claims within the evolving landscape of Nigeria’s admiralty law.

Procedure for arresting a ship
As noted in the initial article, the Admiralty Jurisdiction Procedure Rule 2011 as well as the Federal High Court Civil Procedure Rule 2019 are the primary procedural laws regulating the arrest of a ship in Nigeria. The following procedure is imperative in the arrest of a ship:

1. Invoking the in-rem Jurisdiction of the Court: As observed earlier, a Plaintiff or Claimant must first be satisfied that he has a maritime claim before the admiralty jurisdiction can be invoked.

2. Conducting Search in the Caveat Register: Due diligence in ship arrest proceedings is very important, as such, before the filing of an application for the arrest of a ship or institution of an action in rem, the plaintiff is mandated to search the caveat register and file a consequential affidavit deposing to facts that a search was conducted and attaching the necessary evidence. The plaintiff’s failure to search the caveat register before arresting the ship may result in a claim for unlawful arrest by the relevant person or the defendant due to bad faith or gross negligence. When a plaintiff searches the caveat register and finds a caveat against arrest, they must disclose it in their affidavit and present arguments to convince the court to order an arrest of the ship despite the caveat.

Read also: Nigeria projects $10bn revenue from national shipping line

3. Filing the necessary Originating Processes in Court: The Claimant is required to file a motion ex parte for a warrant of arrest in respect of the ship or other property against which the proceeding was commenced, provided that during the time of the application, the ship or other property is within Nigerian territorial waters or is expected to arrive within Nigerian territorial waters within three days from the time of filing the application. The application should be accompanied by a writ of summons as in the prescribed Form 1, a Statement of Claim, and a copy of all documents to be used at the trial, as well as written statements on oath of the witnesses that will be relied upon at trial. The Plaintiff is also required to file an Affidavit of Urgency, an Indemnity in favour of the Admiralty Marshall for expenses incurred in effecting the arrest order, and an undertaking as to damages in favour of the Defendants, in case the arrest warrant turns out to be frivolous and unwarranted.

4. Issuance of Arrest Warrant: The Court upon satisfaction that the claim was properly instituted, and that all requirements of the law were observed, will issue the warrant of arrest as in Form 7. The warrant will be valid for a period of 6 months from the date it was issued and may be renewed for another period of 6 months. It is important to note that a change in ownership may prevent the arrest of a ship, therefore a warrant of arrest of a ship may not be issued where the beneficial ownership of the ship has, since the issuance of the writ of summons, changed as a result of a sale or disposal by any court exercising admiralty jurisdiction. It is, however, the duty of the new owner to inform the Federal High Court of his ownership of the ship to prevent the arrest of his ship.

5. Execution of the Arrest Warrant: The Admiralty Marshall or his substitute is saddled with the responsibility of execution of the arrest warrant. Under custody and sale of the ship, an Admiralty Marshall may accept an amount of money not less than N100,000.00 and not more than N500,000.00 as a deposit towards discharging the liability, and make more demands fortnightly for payment on account of those expenses.

6. Vacation of Arrest Warrant: An order of arrest of a ship or other property is not a final decision of the Court in the in-rem action and as such, when either of the prescribed conditions through a written application by the defendant is met, the arrest will be vacated, provided that:

a. an amount equal to (i) the amount claimed; or the value of the ship or property, whichever is the less (ii), has been paid into court; or
b. a bail bond for an amount equal to (i) the amount claimed; or the value of the ship or property, whichever is the less (ii), has been filed in the proceedings.

Arrest of sister ships
A sister ship is simply a ship owned by the same owner or the same set of owners against whom the maritime claim exists. The doctrine of the arrest of the sister ship requires that in circumstances where the offending ship does not lie within the Court’s jurisdiction, any other ship belonging to the offending ship owner that may appear within the jurisdiction of the Court can be legally arrested as the offending ship, provided that the other ship is in the same beneficial ownership as the offending ship. This implies that the sister ship must be owned by the same relevant person or defendant who owns the offending ship for the arrest of the sister ship to be effective.

Read also: Shipping agents flay maritime workers’ plan to shut down seaports

Sale of ship by judicial order
The Judicial Sale of a ship is another important provision in the AJPR. The AJPR empowers the Court, upon the application of the arrestor or other interested party to order the Sale of a ship if bail or sufficient security has not been provided 6 months after the date of arrest. The ship is to be sold by the Admiralty Marshal and the proceeds of Sale paid into an interest-yielding fixed deposit account in the name of the Admiralty Marshal, pending further orders of the Court.

Ships exempted from arrest and damages for wrongful arrest
Certain ships, such as those used by the Nigerian Navy or belonging to the state or Federal Government, cannot be subject to maritime proceedings or arrested under relevant Maritime Laws. If they commit any wrong, they are exempt from detention, arrest, and judicial sale. Therefore, an action in rem cannot be proceeded against such ships.

The law also recognizes situations where a Plaintiff may make a frivolous and baseless maritime claim for the arrest of a ship. In such cases, the law provides remedies to the aggrieved defendant for wrongful arrest. Accordingly, where an arrest order has been made, the Court may award compensation to the defendant and damages against the Plaintiff if it later appears that the arrest was applied for on insufficient grounds or if the suit is dismissed and there was no probable cause for instituting it. T

he compensation is intended to cover any loss or injury suffered by the defendant as a result of the arrest, attachment, order of sale, or injunction and is awarded at the Court’s discretion upon application by the defendant within 3 months of the termination of the suit. However, it is crucial to note that only a demise charterer or the owner of an arrested vessel possesses the requisite legal capacity to maintain an action for wrongful arrest. Moreover, for an action for wrongful arrest to succeed, the alleged damage suffered as a result of the wrongful arrest must be proved by credible evidence.

Conclusion and recommendations
The admiralty industry and jurisprudence have experienced significant growth over the years, thanks to new rules and the proactive attitude of courts towards maritime claims, particularly on the practice of ship arrest. Over time and even currently, courts have expounded on the law and practice of arresting ships, however, there is a need for a more efficient and seamless system for the institution of maritime claims.
It is imperative to provide continuous legal education and training to all personnel and stakeholders involved in admiralty proceedings to ensure efficient practice in Nigeria. This could be achieved by the joint effort of the relevant bodies such as the Judiciary, the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigerian Shippers Council (NSC) and the Nigeria Bar Association (NBA). Furthermore, establishing a separate Admiralty Registry in Nigeria, which is accessible to all the Federal High Court divisions situated near seaports, is an urgent necessity.
This will guarantee the smooth discharge of duties by the Admiralty Marshall, who bears immense responsibilities of enforcing judgments and orders of the Court in maritime and admiralty cases.

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Joseph Siyaidon is the Team Lead of the Arbitration, Maritime Construction and Energy Disputes Practice Group at Stren & Blan Partners while Stanley Umezuruike is an Associate in the firm’s Arbitration, Maritime Construction and Energy Disputes Practice Group.
Stren & Blan Partners is a full-service commercial Law Firm that provides legal services to diverse local and international Clientele. The Business Counsel is a weekly column by Stren & Blan Partners dedicated to providing thought leadership insight on business and legal matters.
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