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
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions