• Wednesday, June 19, 2024
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The law on arresting ships on Nigerian waters

The law on arresting ships on Nigerian waters

The subject of ship arrest is of paramount importance to the international shipping and trading community. It is also an area that traditionally has been subject of divergent approaches by different legal systems. Civil law systems allow arrest for any claim against the owner of the ship even if it was not maritime; while in common law, a ship could only be arrested for a very limited number of maritime claims. Moreover, the interests of the different components of the industry also vary considerably concerning the subject. While the interest of owners of ships and cargo lies in ensuring that international trading is not interrupted by the unjustified arrest of a ship, the claimants are primarily interested in being able to obtain security for the enforcement of their legitimate claim by way of arrest.

Legal framework for the arrest of ships

Nigeria is a state party to the 1952 International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships (otherwise known as “the Arrest Convention”). It acceded to the Convention in November 1963, even though the Convention only became effective in Nigeria after the enactment of the Admiralty Jurisdiction Act 1991. However, Nigeria is yet to accede to the 1999 Arrest Convention which is the successor to the 1952 Convention. Ship arrest in Nigeria is currently governed by the Admiralty Jurisdiction Act (AJA) and the Constitution of the Federal Republic of Nigeria 1999 (as amended) (CFRN). By virtue of Section 251 (1) (g)of the CFRN, the Federal High Court has exclusive jurisdiction to entertain maritime claims, and the Admiralty Jurisdiction Procedure Rules (AJPR) as well as the Federal High Court (Civil Procedure) Rule 2019 apply in such matters.

Conditions for filing an application to arrest a ship

For a Plaintiff or Claimant to validly invoke the maritime jurisdiction of the Federal High Court for the arrest of a ship, there must exist a “Maritime Claim” as provided under Section 2 of the Admiralty Jurisdiction Act (AJA). A Maritime Claim must either be a “proprietary maritime claim” or a “general maritime claim.

a. Proprietary maritime claims? A proprietary maritime claim refers to claims that are based on the proprietary interest of the ship. These are claims that relate directly to a ship’s res or subject matter, such as claims regarding ship possession, ownership and operation. It also includes claims related to ship titles, ownership of shares in a ship, mortgages on ships or shares in ships, mortgages on ship freight, and disputes between co-owners regarding ship possession, ownership, operation or earnings. Moreso, claims for the satisfaction or enforcement of a judgment given by the Court or any court (including a court of a foreign country) against a ship or other property in an admiralty proceeding in rem are under the purview of proprietary maritime claims.

b. General maritime claims? General Maritime Claims as the name suggests are mostly all-encompassing and they involve claims for (a) damage done to or received by the ship; (b) loss of life, personal injury or damage due to a defect in the ship or its equipment, or omission of the owner or charterer; (c) loss of or damage to goods carried by ship; (d) general average, pilotage, or towage of the ship; (e) supply of goods or services for the ship’s operation or maintenance; (f) construction, alteration, repair or equipping of the ship; (g) charges or dues for port, harbour, canal or light tolls; (h) bottomry or disbursements by the master, shipper, charterer or agent; (i) insurance premium or claim for a mutual insurance call; (j) claim for wages or an amount owed to an employee of the ship; (k) forfeiture or condemnation of the ship or its carried goods, or restoration of the ship or such goods after seizure; (n) enforcement of an arbitral award, including a foreign arbitral award.

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From the foregoing heads of claims enumerated above, a Plaintiff or Claimant that has a maritime claim or cause of action that is covered by the above-listed heads of claims may commence an action to arrest a ship if she is within the jurisdiction of the adjudicating Federal High Court or expected to arrive within three days at the time of filing of the Application to arrest the ship.

Also, it is noteworthy that an action to arrest a ship (admiralty proceedings) can be commenced either as an action in rem (i.e., against the ship or its cargo) or in personam (i.e., against the named shipowners or charterers). Whereas a proprietary maritime claim relates to claims that border on the possession of a ship; (a) title to or ownership of a ship or of a share in a ship; (b)mortgage of a ship or of a share in a ship; (c)mortgage of a ship’s freight; (d)claims between co-owners of a ship with respect possession; (e)ownership; (d) operation or earning of a ship and claims for interest in respect of any of the subjects listed in paragraphs (a) to (d) above can be commenced either as an in rem or as an in personam action without any conditions.

On the other hand, a general maritime claim under Section 2 of the AJA can only be commenced as an in rem action where the person who would be liable for the claim in an action in personam (in the AJA referred to as “the relevant person”) was, when the cause of action arose, the owner or charterer of or in possession or in control of the ship, or if at the time the action is brought, the relevant person is either the beneficial owner of that ship in respect of all the shares in it or the charterer of the ship under a charter by demise. The only other class of action that can be commenced in rem against a ship irrespective of the rule regarding the relevant person and beneficial ownership is an action to enforce a “Maritime Lien.” A “Maritime Lien” is defined under Section 5 (3) AJA to include: a lien for

(a) salvage; or

(b) damage done by a ship; or

(c) wages of the master or of a member of the crew of a ship; or

(d) master’s disbursements.

Section 67 of the Merchant Shipping Act (“MSA”) further extends the above list to include claims for loss of life or personal injury occasioned in connection with the operation of a ship, claims for wreck removal as well as claims for ports, canal and waterways dues and pilotage dues.

In the next part of this article, we will examine the procedure and sale of arrested ships.

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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