Ship Arrest in Nigeria, by Fubara Anga Esq.
AELEX
7th Floor, Marble House
1 Kingsway Road
P O Box 52901 Ikoyi
Lagos, Nigeria
Telephone: (+234) - 1 - 4736296, 4617321-3
Facsimile: (+234) - 1 - 2692072, 4617092
Email: lagos@aelex.com
www.aelex.com
INTRODUCTION
Nigerian law provides a simple and uncomplicated procedure for the arrest of ships thereby making the country a suitable and favourable jurisdiction for such proceedings.
The Admiralty Jurisdiction Act, 1991 and the Admiralty Jurisdiction Procedure Rules, 1993, govern admiralty matters. The Act provides for two general classes of maritime claims namely: proprietary maritime claims and general maritime claims. Nigeria has acceded to the International Convention for the Unification of Certain Rules Relating to the Arrest of Ocean Going Vessels, 1952 simply referred to as The Arrest Convention 1952. The Convention has not been promulgated into municipal law.
Jurisdiction in respect of admiralty matters is vested exclusively in the Federal High Court in the first instance. Appeals in respect thereof lie to the Court of Appeal and the Supreme Court. The court can order the arrest of a vessel in order to confer jurisdiction upon itself or to provide pre-judgment security for the applicant.
PROCEDURE FOR ARREST
Once an applicant has ascertained that his claim falls within the meaning of a maritime claim as defined by the Act (See attached schedule), he may commence the proceedings by filing an action in rem at the Federal High Court in the judicial division covering the port or area where the ship is located. He may at the same time file an ex-parte application disclosing a strong prima facie case for the arrest of the ship. This application must be supported by an affidavit deposed to by the applicant, his solicitor, or his agent stating the following:
(i) The nature of the claim
(ii) That the ship is within the jurisdiction of the court
(iii) That the ship may leave the jurisdiction of the court at anytime thereby depriving the applicant of his pre-judgment security
The applicant is also required to provide with the application the following:
(i) Exhibits supporting the claim
(ii) An undertaking to indemnify the ship against wrongful arrest
(iii) An undertaking to indemnify the Admiralty Marshal in respect of any expenses incurred in affecting the arrest
(iv) An affidavit of urgency stating facts why the application must be heard expeditiously.
Although, at this stage of the proceedings, the court may admit photocopies of exhibits and undertakings, the applicant would subsequently be required to provide the originals or certified true copies. The Registry of the Federal High Court is usually open between the hours of 8 a.m to 1.30 p.m on Monday to Friday. An arrest order can be obtained within 24 hours of filing the requisite processes. It is important to note that unlike certain jurisdictions where it is possible to obtain an arrest order prior to the entry of the ship into jurisdiction, the Nigerian courts will entertain an application for an arrest only when the ship has entered its jurisdiction. So where a prospective applicant is aware that a ship sought to be arrested is bound for a Nigerian port, it is advisable for him to instruct his solicitors in Nigeria as soon as possible so that the requisite processes can be prepared and filed immediately the ship enters Nigerian territorial waters.
SISTER SHIPS
An action may be commenced against a sister ship in respect of general maritime claims. However, the ship in relation to which it is a sister ship must be identified in the writ of summons. The writ of summons may identify more than one ship as a sister ship.
SERVICE OF PROCESSES
An arrest order is usually served along side an arrest warrant and the writ of summons and statement of claim by delivering same to the master of the ship or 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 delivered to the appropriate officers of the Nigerian Port Plc, for example the Chief Harbour Master, Traffic Manager and Port Manager.
SECURITY FOR COSTS
An applicant for an arrest order may be required to give security for costs. The court will order security for costs where the claim is in excess of one million Naira (approximately USD10,000) or its foreign currency equivalent or where the plaintiff has no assets in Nigeria.
The form of security required is usually a deposit of the sum specified by the court; or a guarantee supplied by a protection and indemnity Club, an insurance company or a bank. In determining the quantum of security to be provided, the court shall have regard to all the circumstances of the case and shall not restrict itself to the costs of the legal proceedings.
RELEASE FROM ARREST
The court may order the release of a ship where the amount claimed or the value of the ship is paid into court. The court may also order the release of the ship when a bail bond for the amount claimed or the value of the ship is posted into court or where the applicant gives his consent in writing.
CAVEATS
A caveat against arrest of a ship may be filed at the registry of the Federal High Court where the caveat book is kept. The filing of a caveat constitutes an undertaking by the caveator to appear in the proceedings and to provide bail. The Registrar may also require the caveator to produce an undertaking in writing issued by a Protection and Indemnity Club or a bank or an insurance company to satisfy any judgment for the amount specified in the caveat
Where a ship is already under arrest, other claimants may, in lieu of obtaining a further arrest order, file a caveat against release to prevent the release of the ship. It is important to note that if the original arrest order is withdrawn, it will be necessary for the caveator to obtain a fresh arrest order.
Caveats remain in force for a period of twelve months unless they are withdrawn or set aside before that period.
TIME BARS
Save where the parties have by agreement fixed the limitation period in respect of claims, maritime claims must be filed within three years from the accrual of the cause of action. The limitation period for certain claims is fixed by statute, for example, section 394 of the Merchant Shipping Act, Chapter 224, laws of the Federation of Nigeria, 1990 stipulates a two year limitation period in respect of salvage claims and section 2 of the carriage of Goods by Sea Act, Chapter 44, Laws of the Federation of Nigeria, 1990 stipulates a one year limitation period in respect of claims for loss or damage to goods under contracts of carriage subject to the Hague Rules.
COSTS
The filing fees payable in court for arrest proceedings are assessed as follows:
(i) Where the sum sought to be recovered does not exceed N20, 000 (USD 200), the fee payable is N1, 000 (USD 10).
(ii) Where the sum exceeds N20, 000 (USD 200) but not above N100, 000 (USD 1, 000) the fee payable is N1, 500 (USD 15).
(iii) Where the sum exceeds N100, 000 (USD 1,000) but not above N1, 000,000 (USD 10,000), the fee payable is N2, 500 (USD 25).
(iv) Thereafter for each additional N1, 000,000 (USD 10,000) or part thereof, the sum of N1, 500 (USD 15) is payable.
Please note that the maximum court filing fee payable in respect of any claim is N50, 000 (USD 500). Where a claim is in a foreign currency, it shall be converted to the Nigerian currency and assessed in the manner set out above.
Disbursements arising in the course of effecting a simple arrest usually range between N50,000 to N75,000(USD 500 to USD 750). Professional fees are charged on an hourly basis.
REPARATION FOR NEEDLESS ARREST
An applicant for an arrest order is liable to the ship owner for damages arising from a wrongful arrest. A ship owner has three options to wit:
1. He may apply to court within three months from the termination of the suit for general damage not exceeding twenty thousand naira; or
2. He may make an oral application for damages immediately after judgment. The court in this instance is entitled to summarily assess the damages due to the ship owner; or
3. He may also bring an action for wrongful arrest claiming all the damages arising from the arrest, which he can establish.
SCHEDULE
DEFINTION OF MARITIME CLAIM
Section 2 of the Admiralty Jurisdiction Act 1991 defines a maritime claim as follows:
(1) A reference in this Decree to a maritime claim is a reference to a proprietary maritime claim or a general maritime claim.
(2) a reference in this Decree to a proprietary maritime claim is a reference to
(a) a claim relating to
(i) the possession of a ship; or
(ii) title to or ownership of a ship or a share in a ship; or
(iii) a mortgage of a ship or of a share in a ship; or
(iv) a mortgage of a ship’s freight;
(b) a claim between co-owners of a ship relating to the possession, ownership, operation or earning of a ship.
(c) A claim 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;
(d) A claim for interest in respect of a claim referred to in paragraphs (a), (b) or (c) of this subsection.
(3) A reference in this Decree to a general maritime claim is a reference to -
(a) a claim for damage done by a ship (whether by collision or otherwise);
(b) a claim for damage received by a ship;
(c) a claim 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;
(d) subject to subsection (4) of this section, a claim, including a claim for loss of life or personal injury arising out of an act or omission of
(i) the owners or charterers of a ship;
(ii) a person in possession or control of a ship;
(iii) a person for whose wrongful act or omission the owner, charterer or person in possession of the ship is liable.
(e) a claim for loss of, or damage to goods carried by a ship
(f) a claim arising out of an agreement relating to the carriage of goods or persons by a ship or to the use or hire of a ship, whether by charterparty or otherwise;
(g) a claim relating to salvage (including life salvage and salvage of cargo or wreck found on land);
(h) a claim in respect of general average;
(i) a claim in respect of pilotage of a ship;
(j) a claim in respect of towage of a ship or an aircraft when it is waterbourne;
(k) a claim in respect of goods, materials or services (including stevedoring and lighterage services) supplied or to be supplied to a ship for its operation or maintenance;
(l) a claim in respect of the construction of a ship (including such a claim relating to a vessel before it was launched);
(m) a claim in respect of the alteration, repair or equipping of a ship or dock charges or dues;
(n) a claim in respect of a liability for port, harbour, canal or light tolls, charges or dues, or tolls, charges or dues of any kind, in relation to a ship;
(o) a claim arising out of bottomry;
(p) a claim by a master, shipper, charterer or agent in respect of disbursements on account of a ship;
(q) a claim for an insurance premium, or for a mutual insurance call, in relation to a ship; or goods or cargoes carried by a ship;
(r) a claim by a master, or a member of the crew, of a ship for
(i) wages; or
(ii) an amount that a person, as employer, is under an obligation to pay to a person as employee, whether the obligation arose out of the contract of employment or by operation of law, including by operation of the law of a foreign country;
(s) a claim for the forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried in a ship, or for the restoration of a ship or any such goods after seizure;
(t) a claim for the enforcement of or a claim arising out of an arbitral award (including a foreign award within the meaning of the Arbitration and Conciliation Act) made in respect of a proprietary maritime claim or a claim referred to in any of the proceeding paragraphs;
(u) a claim for interest in respect of a claim referred to in any of the paragraphs (a) to (t) of this subsection.