Nigeria: Ship Arrest - Recent Developments In Nigerian Arrest Law

Last Updated: 28 October 2011
Article by Ade Afun

Introduction

This paper considers the recent developments in Nigerian Ship Arrest Law – the Admiralty Jurisdiction Procedure Rules (AJPR) 2011 for the Federal High Court of Nigeria (FHC), and its effect on ship arrest practice.

The new AJPR 2011 (the New Rules) was made by the Chief Judge of the FHC (CJF)1 on 1st March 2011 and came into force on 14th March 2011. This is pursuant to section 254 of the Constitution of the Federal Republic of Nigeria 19992 and section 21 of the Admiralty Jurisdiction Act (AJA) 19913 which empower the CJF to make rules of practice and procedure for the FHC and to carry into effect the objects of the AJA. Together, the AJA and the AJPR govern admiralty matters in Nigeria, with the FHC as the court of first instance. The admiralty jurisdiction of the FHC is well stated in the AJA4, whilst the AJPR provides the procedure for the exercise of its jurisdiction. Appeals from the FHC lie to the Court of Appeal and the Supreme Court.

The New Rules are the result of the review of AJPR 1993 (Old Rules), which became necessary to keep up with the demands in shipping practice; noting the dynamic nature of the shipping industry. Various issues have been addressed in the AJPR 2011, with new rules added to bring the AJPR in line with modern shipping practices. There is in total, 23 Orders in the New Rules, amounting to an increase from the 17 Orders in the Old Rules.

I shall briefly highlight the criteria for arresting a ship in Nigeria before discussing the provisions of the New Rules as it affects ship arrest.

Criteria For Arresting A Ship In Nigeria

The process of applying for the arrest of a ship requires that the claimant possesses a Maritime Claim‟ as defined in Section 2 AJA and reproduced in Appendix 1 to this paper. This generally means that the claim must be a 'proprietary maritime claim' or a 'general maritime claim' as follows:

  1. Proprietary maritime claims include claims relating to the possession of a ship, title to or ownership of a ship or a share in a ship, mortgage of a ship or of a share in a ship, mortgage of a ship‟s freight or claims between co-owners of a ship relating to the possession, ownership, operation or earning of a ship. Also claims for the satisfaction or enforcement of a judgment given by the Court or a court (including a court of a foreign country) against a ship or other property in an admiralty proceeding in rem.
  2. General maritime claims include claims for damage done or received by a ship (whether by collision or otherwise), claims for loss of life, or for personal injury, sustained in consequence of a defect in a ship or in the apparel or equipment of a ship as well as arising out of an act or omission of the owners or characters of a ship.

Once the claimant has ascertained that his claim falls within the meaning of a Maritime Claim as listed above, he may shall commence proceedings against the ship at the FHC (in the judicial division covering the port or area where the ship is located). The procedure for applying for the arrest for a ship shall be discussed later under the New Rules.

SHIP ARREST DEVELOPMENTS IN NIGERIA

The New Rules in its bid to update the AJPR has provided new provisions, thus changing the face of ship arrest in Nigeria. Some of the important provisions are discussed below:

1. Application for the Arrest of a Ship

The new procedure for applying for the arrest for a ship is set out in Order 7, Rule 1 (1) AJPR 2011 and reproduced in Appendix 2 to this paper. With this, a claimant with a Maritime Claim may now commence in rem proceedings against the ship once the ship is within jurisdiction or expected to arrive jurisdiction within three days (Emphasis mine), at the time of filing the application.

This amounts to a major improvement as the Old Rules (Order VII) failed to state whether a ship must be within the jurisdiction of the court or not, before an application for the arrest of the ship can be made to the FHC. The practice therefore was for a ship to be within the jurisdiction of the court (and no more) before an application for the arrest of the ship can be brought made. This was premised on the fact that the FHC cannot arrest a ship5 not within its jurisdiction (.i.e. every open sea within twelve (12) nautical miles of the coast of Nigeria (measured from the low water mark) or of the seaward limits of inland waters6); and that the grant of an order otherwise, would amount to an order in futility.

The documents required to be filed for the warrant of arrest of a ship remains the same as under the Old Rules: Writ of summons; statement of claim; motion exparte disclosing a strong prima facie case for the arrest of the ship; supporting affidavit stating the nature of the claim, that the ship is within the jurisdiction of the court or is expected to arrive jurisdiction within three days, and that the ship may leave the jurisdiction of the court at anytime. The claimant is also required to provide an Affidavit of Urgency; Indemnity in favour of the Admiralty Marshall for his expenses in effecting the arrest order; and an undertaking as to damages in favour of the Defendants.

The new procedure for applying for a warrant of arrest of a ship deals with the lacuna in the Old Rules which allowed claimants to lose their window of opportunity to arrest a ship for a claim, simply because they have to wait for the ship to be within jurisdiction before applying a warrant of arrest.

2. Caveats

As part of the new procedure for obtaining a warrant of arrest for a ship, the New Rules clearly state that the Claimant shall be responsible for conducting a search of the caveat book for the purpose of ascertaining whether there is a caveat against arrest in force with respect to that ship.7 This puts an end to a lacunae in the Old Rules that allowed a claimant obtain an arrest order for a ship, knowing fully well that a caveat against arrest exists. This was the practice simply because the Old Rules did not require the 3

Claimant to search the caveat register before applying for a warrant of arrest of a ship and where such a caveat exists, inform the court accordingly.

Although the Praecipe for Caveat against Arrest – Form C in the Schedule to the Old Rules provides that the Caveator undertakes to appear with 14 days of service of a writ commencing action against a ship, the Caveat against Arrest issued in practice and accepted by the Registrar/Admiralty Marshal provides that the caveator shall in a suit involving the ship within 3 days of been served. The New Rules have amended (Form 8 in the Schedule to the AJPR 2011) and brought the rules in line with practice.

Finally, a Praecipe for Caveat against Release of a Ship is provided for the first time in Form 10 to the Schedule to the New Rules.

3. Change in Beneficial Ownership

The provisions of the New Rules provide that 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 jurisdiction8. It is however the duty of the new owner to inform the FHC of his ownership of the ship to prevent the arrest of his ship.

4. Custody and Sale of Ship Under Arrest

As you would recall, the application for a warrant of arrest constitutes an undertaking from the Claimant to the Court to pay the Admiralty Marshal, on demand, an amount equal to the expenses of the Admiralty Marshal in relation to the arrest. As such the Admiralty Marshal was allowed under the Old Rules to accept from the Claimant, an amount not exceeding N5,000.00 (Approx. USD$32.30) as deposit towards discharging its liability and the Admiralty Marshall may make more demands for interim payments on account of those fees and expense. This amount is clearly not commensurate to the demands of the time.

Whilst advising claimant‟s on the ship arrest practice in Nigeria, we estimate the Admiralty Marshal‟s weekly cost as N100,000.00 (Approx. USD$645.15). Taking note of the current realities, the New Rules now provided that the "Admiralty Marshall may accept an amount of money not less than N100,000.00 and not more than N500,000.00 as deposit towards discharging the liability; and make more demands fortnightly for payment on account of those expenses."9

The Admiralty Marshall is also required to file a return or receipts and expenditures to the Court within 7 working days of the release of the ship10

5. Judicial Sale of a Ship

In light of the various ships that litter the waterways of Nigeria as a result of ship owners failing to provide bail for the release of vessels under arrest or entering appearance in a suit, Order 9, Rule 6(2) of the New Rules now empowers the court on the application of the arrestor or other interested party order the sale of the ship where the 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. 4

6. Reparation For Needless Arrest

One of the most notable changes to ship arrest practice under the New Rules is the issue of reasonable compensation for needless arrest. This is addressed under Order 11, Rule 2 AJPR and reproduced in Appendix 3 to this paper the New Rules.

Under the Old Rules, if it appears to the Court that the arrest of any defendant, or any order of attachment, sale, or injunction, or any warrant to stop clearance of, or to arrest any ship was applied for on insufficient grounds; or if the suit in which any such application was made is dismissed, or judgement is given against the plaintiff by default or otherwise, and it appears to the Court that there was no probable ground for instituting such suit, the court may (on the application of the defendant made at any time before the expiration of 3 months from the termination of the suit) award against the plaintiff such amount, not exceeding the sum of N20,000.00 (Approx. USD$129.00) (Emphasis mine), as it may deem a reasonable compensation to the defendant for any loss, injury, or expenses which he may have sustained as a result of such arrest, attachment, order of sale or injunction , as aforesaid.

The maximum sum of N20,000.00 for compensation for needless arrest of a ship has been highly criticised over few years. The frivolous and/or vindictive arrest orders obtained over the years by various claimants has been blamed on this provision as it does not serve as a deterrent. The New Rules, understanding the economic importance of a ship arrest to a ship owner has provided the Court with the power to "award against the plaintiff such amount as it may deem reasonable compensation (Emphasis mine) to the defendant for any loss, injury, or expenses which he may have sustained as a result of such arrest, attachment, order of sale or injunction."

Order 11, Rule 2 AJPR would definitely serve as a deterrent to false applications for arrest orders and prevent an abuse of the court process.

Conclusion

It is believed that the AJPR 2011 would improve maritime practice in the Nigeria as well as help in mitigating cost of doing business in the country. The above rules mirror current realities in the industry and closely modelled in line with notable Maritime Jurisdictions of the world like, England & Wales.

Although the implementation of some the provisions of the New Rules might not be clear, I believe this would be "ironed out" with practice as Nigeria remains a significant shipping nation and the largest in cargo volume in the West African sub-region. Nigeria therefore remains a favourable jurisdiction for ship arrests and an enviable investment destination.

Authored by: Adedoyin Afun11

Footnotes

1 Justice Daniel Dantsoho Abutu, FCI Arb. (as he then was)

2 Cap. C23, Laws of the Federation of Nigeria (LFN) 2004

3 Cap. A5, Laws of the Federation of Nigeria (LFN) 2004

4 Sections 1, 3 and 5 AJA

5 Section 7, AJA provides that the service and arrest of a ship shall take place within the limits of the territorial waters of Nigeria.

6 Section 1(1) Territorial Waters Act, Cap. T5, Laws of the Federation of Nigeria (LFN) 2004

7 Order 7 Rule 1(2) AJPR 2011

8 Order 7 Rule 1(4) AJPR 2011

9 Order 9, Rule 2 (2(a and b) AJPR 2011

10 Order 9, Rule 2 (2d) AJPR 2011

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.