Ship and cargo owners with an interest in Nigeria may be confronted by a unique question in their quest for due diligence: in the event of damage or loss to cargo, which liability regime applies? This is not a trick question. The Hague Rules 1924 and the Hamburg Rules 1978 are concurrently in force in Nigeria. The Hague Rules are one of the statutes inherited from the time of British rule and apply as the Carriage of Goods by Sea Act 2004.(1) Conversely, the Hamburg Rules were domesticated in Nigeria as a National Assembly act entitled the UN Convention on the Carriage of Goods by Sea (Ratification and Enforcement) Act 2005.
The Hamburg Rules apply to all carriage by sea contracts between two different states, provided that the ports of loading and discharge or the place where the bill of lading or other transport document was issued are in a contracting state. Thus, the Hamburg Rules cover both inward and outward shipments of cargo and apply where there is a bill of lading or other shipping document. Conversely, the Hague Rules apply only to bills of lading issued in any of the contracting states. As such, they apply only to outward movements of cargo from Nigeria. Whereas the Hague Rules are notoriously skewed in favour of the ship owner or carrier, the Hamburg Rules establish a more balanced liability regime that is fair to all parties concerned in a sea carriage transaction. As Nigeria is party to neither the Hague-Visby Rules nor the Rotterdam Rules (which are yet to come into force), these have no force of law in Nigeria.
Due to their relatively conflicting provisions, the continued co-existence of the Hague Rules and the Hamburg Rules has generated confusion and uncertainty among shippers, ship owners, carriers, cargo owners, underwriters and other key industry players that, without a definite yardstick for deciding which of these regimes applies to their transaction, cannot properly assess their rights, liabilities and obligations.
This controversy was unwittingly permitted by the UN Convention on the Carriage of Goods by Sea (Ratification and Enforcement) Act 2005, which merely introduced the Hamburg Rules as a schedule to the legislation without expressly repealing and denouncing the Hague Rules, as required by Article 15 of the Hague Rules.
Despite this confusion, the UN Convention on the Carriage of Goods by Sea (Ratification and Enforcement) Act 2005 mandatorily applies to the carriage of goods by sea to the exclusion of any other international convention, including the Hague Rules.(2) It specifically demands that every contracting state under it must denounce any other carriage regime within five years of it coming into force.(3)
Further, the Hamburg Rules have force of law in Nigeria and do not permit parties to contract out of the provisions. As such, the doctrine of pacta sunt servanda (ie, agreements must be kept) operates only marginally under the Hamburg Rules regime.
Thus, any stipulation in a carriage by sea contract, bill of lading or any other document evidencing the contract that parties seek to be governed by the Hague Rules or any other convention necessarily amounts to a derogation from the provisions of the Hamburg Rules and is accordingly null and void.(4)
Although an earlier statute may not be implicitly repealed by a later statute on the same subject matter in the absence of express words of repeal, it is evident that the domestication of the Hamburg Rules was intended to improve the provisions of the Carriage of Goods by Sea Act 2004 and effectively make them the single regime for sea carriage transactions in Nigeria. In Ibidapo v Lufthansa Airlines(5) the Supreme Court held that:
"Where it is intended to repeal a legislation, this should be expressly so stated as the courts generally lean against implying the repeal of an existing legislation unless there exists clear proof to the contrary…The court will not imply a repeal unless two Acts are so plainly repugnant to each other that effect cannot be given to each other at the same time."
The Carriage of Goods by Sea Act 2004 and the UN Convention on the Carriage of Goods by Sea (Ratification and Enforcement) Act 2005 are "plainly repugnant" to each other. Therefore, both cannot have force of law at the same time. In addition, the Hague Rules were held by the Supreme Court in Leventis Technical Limited v Petrojessica Enterprises Limited(6) to apply to inbound carriage only where there is no applicable statutory enactment. Therefore in reality, although the application of the Hague Rules to inbound carriage in Nigeria was widespread, this was only by reference in the carriage contract, a practice which is now effectively purposeless under the domesticated Hamburg Rules.
The Hamburg Rules adequately and equitably regulate carriage of goods by sea transactions in Nigeria. Conversely, the Hague Rules have become redundant and serve only to introduce needless confusion and uncertainty. Nonetheless, steps should be taken to formally denounce the Hague Rules and repeal the Carriage of Goods by Sea Act 2004 to clarify the subject for those who may still be confused.
For further information on this topic please contact Emeka Akabogu or Enare Etim at Akabogu & Associates by telephone (+234 1460 55550) or email (firstname.lastname@example.org or email@example.com). The Akabogu & Associates website can be accessed at www.akabogulaw.com.
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