Trends and developments
Trends and developments
Are there any notable trends or recent legal developments in your jurisdiction’s shipping industry?
The following developments are of particular note:
- the commencement of construction of proposed greenfield deep-sea ports at Badagry and Lekki in Lagos State and advanced progress on the pre-construction of Ibom Port in Akwa Ibom State;
- a remarkable boost in the ratings of Nigerian ports’ compliance with the International Ship and Port Facility Security Code;
- a pending bill at the National Assembly for the establishment of the Nigerian Marine Development Bank, with funds drawn from the Cabotage Vessel Financing Fund pursuant to the proposal to establish a maritime development bank, as shipowners continue to demand single-digit interest rates on credit facilities available to them;
- increased demands on the federal government to change trade policy on crude oil transportation from free on board terms to cost, insurance and freight;
- the Nigerian Maritime Administration and Safety Agency (NIMASA) is increasingly called on by shipowners and top mariners to disburse the $100 million Cabotage Fund;
- an inland container depot (a dry port) was inaugurated in Kaduna. The president indicated that six other dry ports in Ibadan, Aba, Kano, Jos, Funtua and Maiduguri have been gazetted and are at different stages of completion. The development of dry ports promotes and creates an enabling framework for multimodal transportation, thereby reducing traffic at seaports;
- the National Transport Commission Bill has been passed by the National Assembly and is currently before the president for assent. If assented, it will establish the Transport Commission for regulation of all modes of transportation except air and is expected to facilitate a standard multimodal system;
- the Revised Import Guidelines, introduced by the federal government on the recommendation of the Presidential Enabling Business Environment Council, mandate that all import cargoes are palletised. This has been criticised by a wide range of industry participants, who claim that the policy increases the costs of doing business; and
- the Piracy and Other Unlawful Acts at Sea Bill has been drafted by a committee set up by NIMASA to address piracy within the country’s territorial waters and the Federal Executive Council has approved a memo to forward it to the National Assembly for consideration.
Which ships are eligible for registration in the national shipping register(s) and which parties may register ships?
Ships eligible for registration in the national shipping register include:
- fishing vessels;
- floating production storage and offloading, and floating storage and offloading;
- licensed ships weighing under 15 gross tons;
- merchant ships;
- ships licensed to operate in coastal and inland waters of Nigeria;
- ships weighing 15 gross tons or more;
- ships owned by Nigerian citizens or Nigerian registered bodies corporate;
- ships on bareboat charters and other charters exceeding 12 months; and
- ships under construction.
Parties that may register ships include:
- corporations in their own name;
- joint owners (not exceeding five persons); and
- other parties approved by the minister of transport.
What are the procedural and documentary requirements for registration?
Individuals, joint owners and corporations (through their agent) must submit a written application to the minister at a Nigerian port of registry. Before or on application, the ship must be surveyed and its tonnage ascertained; the ship must also be adequately marked in line with the Merchant Shipping Act.
The surveyor will accordingly issue a certificate of tonnage. To be registered as the shipowner, the individual or corporation must make a declaration referring to the ship as described in the tonnage certificate.
The applicant must submit the following information and documents:
- the name of the ship, the time and place of its purchase, the name of the master, particulars of the tonnage, build and description of the ship, the bill of sale or builder’s certificate (ie, evidence of title), the condition survey report and tonnage measurement certificate as approved by the minister, the ship’s certificate of carving and marking note, the call sign certificate, the load line certificate, evidence of insurance or protection and indemnity coverage, the pre-purchase survey report and the deletion certificate (if the vessel is flagging in from a foreign flag);
- details of the ship purchaser(s), including full names, addresses and occupations;
- evidence that the purchaser is sufficiently experienced to control and maintain the vessel;
- where the ship is newly constructed, the builder’s certificate and certificate of approved plan issued by the Nigerian Maritime Administration and Safety Agency (in respect of Nigerian-built ships);
- bank statements or reference letters as evidence of sufficient finances for vessel operation and upkeep;
- receipt of payment of prescribed registration fees;
- the ship’s logbook;
- where the applicant is a company, a copy of the shareholding structure reflecting ownership, the certificate of incorporation, the tax clearance certificate, particulars of directors and the memorandum and articles of association; and
- where the ship was previously registered, the bill of sale and seller’s warranty against encumbrances.
Grounds for refusal
On what grounds may a registration application be refused?
The application may be refused on the following grounds:
- failure to get the ship surveyed and have its tonnage ascertained;
- failure to produce the required documents for registration;
- if the name proposed for registration is already registered or calculated to deceive or offend the public interest; and
- non-compliance with the mandatory registration requirements of the Merchant Shipping Act.
Are there any particular advantages of flying your jurisdiction’s flag?
The advantages of flying Nigeria’s flag are as follows:
- Qualification to participate in supplying services for coastal and inland shipping (ie, cabotage trade) – cabotage trade is reserved for Nigerian-flagged ships which are built and crewed by Nigerians. Even where a vessel is not built in Nigeria or crewed or managed by Nigerians, it may still qualify for cabotage ahead of other vessels if flying the Nigerian flag.
- The ship will acquire a high rating/classification to provide shipping services for specified contracts in the oil and gas industry under the Nigerian local content policy, which aims to increase the capacity of Nigerians to participate in the oil and gas industry.
Liens and mortgages
How are encumbrances such as maritime liens and mortgages registered in your jurisdiction and what are the effects of registration?
Encumbrances are registered on completion of the following:
- payment of prescribed registration fees;
- presentation of the mortgage document to the Ship Registry; and
- recordal of the mortgage in the register by the registrar.
The effects of registration are as follows:
- The registered mortgage takes priority over all those subsequently registered after its date of registration. Once a mortgagee’s power of sale becomes exercisable, a registered mortgagee of a ship is entitled to dispose of the security.
- The mortgagor cannot sell the ship or declare bankruptcy, even if the ship is still in its possession, and the mortgage will take priority over any rights or claims against the ship once registered.
Securable claims and priority
What claims can be secured by maritime liens and what is the order of priority?
The securable claims by maritime lien on a ship as provided in the Merchant Shipping Act are as follows, in descending priority:
- salvage, wreck removal and contribution in general average;
- wages of the masters, officers and members;
- disbursements made by the master on the ship’s account;
- injury or loss of life which occurred in connection with the ship’s operation; and
- pilotage, port, canal and other waterway dues.
Maritime liens take priority over all other encumbrances and securable claims.
The Admiralty Jurisdiction Act also sets out maritime liens for which an action in rem may be commenced before the courts:
- damage done by a ship;
- wages of the master or crew members of a ship; and
- the master’s disbursement.
The lien on damage done by a ship is absent from the list of maritime liens in the Merchant Shipping Act, while wreck removal, contribution in general average, pilotage, port, canal and other waterway dues are not listed as maritime liens in the Admiralty Jurisdiction Act.
No order of priority is provided in respect of maritime liens in the Admiralty Jurisdiction Act.
Under what circumstances are maritime liens extinguished?
Circumstances under which maritime liens are extinguished are:
- the judicial sale of the ship connected with the maritime claim;
- for maritime liens listed in the Merchant Shipping Act, after a period of one year from the time that the claims arose (where the ship was not arrested before this period and the arrest has not led to a forced sale); and
- for maritime liens which a shipbuilder may have to secure claims for the building of the ship or that a ship repairer may have to secure claims for ship repairs (where the shipbuilder or repairer ceases to be in possession of the ship).
Are foreign liens recognised in your jurisdiction?
Foreign maritime liens are recognised in Nigeria, as the Admiralty Court has jurisdiction over all maritime claims (including maritime liens), wherever they may arise.
Transfer and assignment
Which rules govern the transfer and assignment of liens, mortgages and other encumbrances?
The rules governing the transfer and assignment of liens, mortgages and other encumbrances as contained in the Merchant Shipping Act are as follows:
- A mortgage over a Nigerian registered ship or a share in such a ship may be transferred to any person.
- The instrument of transfer accompanied by the mortgage to which it relates must be presented to the registrar.
- The registrar will record the transfer in the register and endorse the mortgage and instrument of transfer with its date and time to reflect that the mortgage has been registered.
- While there is a registry for mortgages, there is no registry for maritime liens in Nigeria.
Grounds for arrest
Under what circumstances can a ship be arrested in order to secure a claim against it?
Grounds on which a ship can be arrested to secure a claim against it are as follows:
- where the claim is a proprietary maritime claim (ie, dealing directly with the ownership or control of the ship);
- where the claim is such that it would give rise to a maritime lien or charge on the ship (eg, claims for salvage, master’s disbursements); and
- where the claim is a general maritime claim (ie, claims that arise in respect of a ship for which the person who would have been liable in an in personam action is the owner or demise charterer at the time that the action is brought).
Can a ship be arrested to secure a non-maritime claim?
A ship cannot be arrested to secure a non-maritime claim. However, it can be detained by the government or port authorities for non-adherence to regulations, although this does not qualify as arrest under admiralty.
Can a ship be arrested to secure a claim against a sister ship?
Yes, a sister ship can be arrested where a claim is brought against the owner or demise charterer of a ship who is the beneficial owner of all the shares in another ship (statutorily known as a sister ship). This is possible only if the sister ship is located in Nigerian waters.
What are the procedural and documentary requirements for seeking arrest of a ship?
The procedure for seeking arrest of a ship is as follows:
- The applicant for arrest should ensure that the claim qualifies as a maritime claim.
- The applicant should check the caveat register to determine whether a caveat is registered against the arrest of the ship.
- If such a caveat exists, the applicant must notify the court of its existence and provide good and substantial reason for the intended arrest.
- An ex parte motion for the ship’s arrest and affidavit of urgency is then filed, showing cogent reasons for the arrest.
- The affidavit filed should reflect the nature of the claim, that it has not been satisfied, the name of the ship and its port of registry. There are additional requirements for affidavits relating to the arrest of sister ships.
- The applicant is advised to confirm that the ship is in the jurisdiction or is due to arrive in the jurisdiction within three days.
- The applicant must submit an undertaking against damages and a letter of indemnity to the admiralty marshal for the fees and expenses of the arrest.
- The court then issues a warrant of arrest if good grounds are shown.
- The processes are delivered to the appropriate officers of the Nigerian Port Plc (eg, the chief harbour master, traffic manager and port manager).
- The admiralty marshal executes the arrest warrant.
The documentary requirements for seeking the arrest of a ship are as follows:
- an ex parte motion;
- an affidavit of urgency;
- a writ in rem;
- a statement of claim; and
- evidentiary documents to be relied on.
What security must the arresting party put up in order to secure arrest of a ship and how is this security calculated?
The arresting party is not required to furnish security for an arrest before obtaining the arrest.
However, on the defendant’s application, an arrestor may be required to give security for costs. The court will order security for costs where the claim is in excess of N5 million (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 (P&I) club, an insurance company or a bank. In determining the quantum or nature of security to be provided, the court will have regard to all of the circumstances of the case and will not restrict itself to the costs of the legal proceedings.
What security can the arrested party provide for release of an arrested ship?
To secure the release of an arrested ship, the arrested party can:
- make payment into court of the amount of the claim and costs; or
- file a bail bond (bank guarantee, P&I club undertaking or insurance bond from a reputable insurance company) in court for an amount equal to either the value of the claim and costs or the value of the arrested ship or property, provided that such amount does not exceed the value of the property.
Judicial sale of ships
What is the legal procedure for the judicial sale of ships in your jurisdiction?
The procedure is as follows:
- An interested party files an application with the Federal High Court for the valuation and sale of the vessel by way of summons accompanied by supporting documents, as required by the Admiralty Jurisdiction Procedure Rules 2011.
- The admiralty marshal must advertise the sale of the vessel in two national newspapers, giving 21 days' notice of the auction, to allow interested parties to make their bids. After all bids have been received, the admiralty marshal gives written notice of the time and place of the judicial sale to all interested parties (eg, holders of registered mortgages, holders of maritime liens and the registrar of ships) no less than 30 days before the sale. The sale must be conducted by auction.
- After the auction, the admiralty marshal files a return of sale with the court, pays the proceeds of sale into a court bank account and files an account of sale.
- The court orders the admiralty marshal to notify all other claimants against the vessel through a newspaper advertisement, giving a set timeframe (usually 14 days) within which claims for the determination of priorities must be filed. All interested parties must file an application with the Federal High Court to determine the order of priority of claims against the ship. If a party is not already a party to the action, but has an interest in the ship, it can file a verifying affidavit with the Federal High Court stating its interest in the matter.
- All mortgages, rights, liens, charges and encumbrances against the ship are extinguished, except for those assumed by the purchaser.
- If all the above steps have been complied with, the court will issue a certificate to the effect that the ship is sold free of all mortgages, rights, liens, charges and encumbrances held by the previous owner of the ship, except those assumed by the purchaser. Thus, full ownership of the vessel is transferred to the purchaser.
- The purchaser must deliver a signed declaration of transfer, approved by the minister of transport, and the bill of sale and other supporting documents to the registrar at the port of registry. At the end of this process, the purchaser is entered in the port register as the shipowner and the previous registration is deleted.
Under what circumstances are foreign sales recognised?
Foreign judicial sales are recognised in Nigeria, provided that an application is made by or on behalf of the purchaser to the court and the registrar of ships. The evidence of the sale and change in ownership must be provided as supporting documents. On production of such documents, the registrar will delete the previous ownership and enter the purchaser as the owner of the ship. However, a foreign judicial sale will not be recognised by the court if it is found to be contrary to public policy or to have been obtained by fraud or in breach of natural justice.
Limitation of liability
What parties may limit liability for maritime claims?
Parties that may limit liability for maritime claims include:
- the shipowner (ie, the owner, charterer, operator or manager of a ship); and
- the salvor (ie, any party that renders services for salvage).
For what claims can liability be limited? Are any claims explicitly exempt from the limitation of liability?
Claims for which liability can be limited include:
- loss of life and property or injury occurring in the course of the ship’s operation;
- loss resulting from delay in the carriage by sea;
- loss resulting from infringement of non-contractual rights stemming from the operation of the ship or salvage operations;
- the removal, destruction or rendering harmless of cargo on the ship;
- claims in respect of measures taken to minimise or avert loss for which the liable person may limit its liability;
- claims in respect of floating platforms constructed for the purpose of exploring or exploiting natural resources of the seabed or soft soil thereof; and
- claims in respect of raising, removal or rendering harmless of a ship which is sunk, wrecked, stranded or abandoned.
Claims explicitly exempt from the limitation of liability include:
- claims for salvage or contribution in general average;
- claims for oil pollution;
- claims subject to any international convention or national legislation governing or prohibiting limitation of liability for nuclear damage;
- claims against the owner of a nuclear ship for nuclear damage; and
- claims of a servant of salvor or shipowners whose duties are connected with the ship or salvage operations.
Claims for the removal, destruction or rendering harmless of cargo on the ship in respect of measures taken to minimise or avert loss for which the liable person may limit its liability and in respect of raising, removing or rendering harmless a ship which is sunk, wrecked, stranded or abandoned shall not be subject to liability where they are related to remuneration under a contract with the person liable.
What limits are set for eligible claims?
In respect of claims for loss of life or personal injury, the limits are as follows:
- 2 million units of account for a ship with a tonnage of up to 2,000 tons; and
- for a ship with a tonnage exceeding 2,000 tons, the following amount in addition to the abovementioned 2 million units of account:
- for each ton from 2,001 tons to 30,000 tons – 800 units of account;
- for each ton from 30,001 tons to 70,000 tons – 600 units of account; and
- for each ton exceeding 70,000 tons – 400 units of account.
In respect of all other claims, the limits are as follows:
- 1 million units of account for a ship with a tonnage of up to 2,000 tons; and
- for a ship with a tonnage exceeding 2,000 tons, the following amount in addition to the abovementioned 1 million units of account:
- for each ton from 2,001 tons to 30,000 tons – 400 units of account;
- for each ton from 30,001 tons to 70,000 tons – 300 units of account; and
- for each ton exceeding 70,000 tons – 200 units of account.
The limits of liability for any salvor not operating from any ship or for any salvor operating solely on the ship for which it is rendering salvage services will be calculated according to a tonnage of 1,500 tons.
In respect of claims for loss of life or personal injury to passengers, the limit of shipowners’ liability will be an amount of 175,000 units of account multiplied by the number of passengers that the ship is authorised to carry according to its certificate.
What rules and procedures govern the establishment of limitation funds?
The rules and procedures governing the establishment of limitation funds are the Merchant Shipping Act 2007 and the Admiralty Jurisdiction Procedure Rules 2009 (Order 15).
How are liability funds distributed?
Liability funds are distributed by the Federal High Court (which has exclusive jurisdiction over admiralty and maritime matters), before which a limitation proceeding is initiated by the party seeking to limits its liability.
Carriage of goods
Is your jurisdiction party to any international conventions on the carriage of goods by sea? If so, does the relevant domestic implementing law contain any notable modifications (eg, extensions to the scope of application)?
Nigeria is a party to the Hague Rules – Unification of Certain Rules Relating to Bills of Lading 1924, which have been incorporated into domestic legislation as the Carriage of Goods by Sea Act 2004. It essentially covers only outgoing cargo, not imports. Consequently, when the act was the exclusive mandatory legal carriage regime in Nigeria, imports were governed by the contractually agreed carriage regime (contained in the bill of lading).
Nigeria subsequently ratified the Hamburg Rules, which were implemented through the United Nations Convention on the Carriage of Goods by Sea (Ratification and Enforcement) Act 2005. However, this act did not repeal the Carriage of Goods by Sea Act, so the two accordingly exist side by side.
While ordinarily the subsequent law should override the former legislation, the fact that it has not fulfilled the condition precedent for coming into effect in Nigeria – implementing the denunciation of the Hague Rules as provided for by Article 31 of the Hamburg Rules – makes it uncertain whether the Hamburg Rules have indeed been lawfully and validly implemented in Nigeria. It therefore seems that that the two carriage regimes coexist.
There are no modifications to the international convention in the domestic implementing law.
What is the official extent of the carrier’s responsibility for goods?
The extent of the carrier’s responsibility is from port to port – that is, from the port of loading, through carriage and to the port of discharge. Once a shipper has established loss, the burden of proving how the loss occurred shifts to the carrier.
Contractual limitation of liability
May parties contract out of any legal provisions governing cargo liability?
The possibility of parties contracting out of the legal provisions governing liability depends largely on the carriage regime governing the transaction. Generally, with regard to carriage contracts providing for the Hague Rules, the fact that the Carriage of Goods by Sea Act 2004 does not apply to imports makes the act not compulsorily applicable to them. Therefore, the governing law of the bill of lading must be relied on.
However, the Hamburg Rules do not generally provide for any derogation for parties to contract out of their stipulated provisions.
Title to sue
Who has title to sue on a bill of lading?
The right to sue on contracts of carriage of goods by sea is statutory. Thus, only a consignee of goods in a bill of lading or an endorsee of the bill of lading may sue. A re-endorsee or any person to whom a bill of lading has been transferred with or without actual endorsement may also sue.
What is the time bar for cargo claims?
Under the Hamburg Rules, cargo claims become time barred two years after the delivery of the goods or two years after the last day that the goods should have been delivered. The same rule applies under the Hague Rules, but the time bar is one year.
Section 18 of the Admiralty Jurisdiction Act has an omnibus provision regarding limitation periods for maritime claims, maritime liens and other charges which are not covered by a specific contractual provision or any applicable law. The specified period is three years.
Definition of ‘carrier’ and ‘goods’
How are ‘carrier’ and ‘goods’ defined in respect of cargo claims? Is there any especially pertinent case law on this issue?
‘Carrier’ refers to any person by whom or in whose name a contract of carriage of goods by sea has been concluded with a shipper.
‘Goods’ include live animals; where the goods are consolidated in a container, pallet or similar article of transport or where they are packed, ‘goods’ include such article of transport or packaging if supplied by the shipper.
Defences available to carrier
Under what circumstances may the carrier rely on the perils of the sea defence? What other defences are available to the carrier?
The carrier can rely on the perils of the sea defence where:
- the vessel was seaworthy;
- there has been no negligent conduct by the carrier, master or crew in the management of the vessel; and
- the carrier has discharged its obligations to the cargo owners to properly handle, load, stow, care for and discharge the cargo.
Other defences available to the carrier include the following:
- The carrier or its servants took all measures possible to mitigate the loss.
- In respect of live animals, the carrier submits proof of compliance with the special instructions of the shipper for the carriage of animals where loss, damage or delay in delivery could be attributed to special risks inherent in the carriage of such animals.
- The loss, damage or delay in delivery resulted from efforts to save life or property at sea.
- The shipper failed to properly stow, lash or otherwise pack the cargo securely.
What legal protections and defences against cargo claims are available to agents of the carrier and other third parties (eg, Himalaya clauses)?
The following are available:
- If a servant or agent of the carrier proves that it acted within the scope of its employment, it is entitled to avail of the defences and limits of liability that the carrier is entitled to invoke, if a clause to this effect (ie, Himalaya clause) is included in the bill of lading.
- An indemnity may be agreed between the carrier and its servants and agents against the claims of cargo interests which is also made a term of the bill of lading (this is referred to as a circular indemnity clause).
Deviation from route
Under what circumstances is deviation from the agreed route allowed?
Deviation is allowed under two circumstances:
- to save human lives; and
- for safe prosecution of the voyage.
Claims against shipper
What claims can the carrier pursue in respect of the shipper’s failure to meet its obligations?
The carrier can pursue the following claims:
- for payment of damages for goods and expenses incurred in respect of destroying or rendering innocuous flammable, explosive or dangerous goods to which the carrier had not consented;
- for payment of damages for loss to the carrier caused by the actual fault or neglect of the shipper;
- for payment of freight and/or interest on freight;
- for demurrage; and
- in respect of general average.
Multimodal carriage of goods
How is multimodal carriage regulated in your jurisdiction?
There is no single enactment regulating multimodal carriage of goods in Nigeria. A Carriage of Goods by Sea Bill which contains provisions regulating multimodal carriage was drafted a few years ago as an executive bill, although it is yet to be enacted by the National Assembly.
Collision and pollution
What rules and procedures (under both domestic and international law) apply to the prevention of, liability for and remedy of:
The following provisions govern the prevention of, liability for and remedy of collision:
- the Merchant Shipping Act;
- the Admiralty Jurisdiction Act;
- the Admiralty Jurisdiction Procedure Rules; and
- the International Regulations for Preventing Collision at Sea 1972.
(b) Oil pollution?
The following laws govern the prevention of, liability for and remedy of oil pollution:
- the Merchant Shipping Act;
- the Nigerian Maritime Administration and Safety Act; and
- the Admiralty Jurisdiction Act.
The Merchant Shipping Act provides for the application of the following international conventions in respect of:
- the Convention Relating to Intervention on the High Seas in Cases of Threatened Oil Pollution Casualties 1969; and
- the International Convention on Oil Pollution Preparedness, Response and Cooperation 1990;
- the International Convention on Civil Liability for Oil Pollution Damage 1992; and
- the Convention Relating to Intervention on the High Seas in Cases of Threatened Oil Pollution Casualties 1969; and
- the Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage 1971 and its 1992 Protocol.
(c) Other environmental damage caused by a ship?
The following provisions govern the prevention of, liability for and remedy of other environmental damage caused by ships:
- domestic rules:
- the Nigerian Maritime Administration and Safety Act; and
- the Merchant Shipping Act; and
- international rules:
- the International Convention for the Prevention of Pollution from Ships 1973/1978 and the annexes thereto;
- the International Convention on Prevention of Marine Pollution by Dumping of Wastes and Other Matters 1972;
- the Basel Convention on the Control of Trans-boundary Movements of Wastes and their Disposal 1989; and
- the Convention on Limitation of Liability for Maritime Claims 1976 and the 1996 Protocol.
What is the legal regime governing salvage and general average?
The legal regime governing salvage and general average in Nigeria is the Merchant Shipping Act, which entails the application of the International Convention on Salvage 1989 (implemented in Nigeria pursuant to Section 215 of Merchant Shipping Act 2007).
Places of refuge
What framework governs access to places of refuge for ships in distress?
There seems to be no officially recognised framework for places of refuge in Nigeria.
What rules and procedures apply to the removal of wrecks in your jurisdiction?
The Nigerian Maritime Administration and Safety Act and the Merchant Shipping Act govern the removal of wrecks in Nigeria.
Under what circumstances can the authorities order removal of wreckage?
Wreck removal can be ordered where the wreck constitutes navigational risks and is a threat to the marine environment.
What regime governs the imposition of security measures on ships and in port facilities?
The following provisions apply:
- the International Ship and Port Facility Security Code, as implemented by the International Convention for the Safety of Life at Sea (Ratification and Enforcement) Act 2004;
- the International Ship and Port Facility Security Code Implementation Regulation 2014;
- the Terrorism (Prevention) Act 2011; and
- the Nigerian Ports Authorities Act 1999.
What rules apply to the qualification and conduct of security officers on ships and in port facilities? Are armed guards allowed on ships?
The qualification and conduct of security officers on ships are governed by the International Ship and Port Facility Security Code Implementation Regulation.
Armed guards are not allowed on ships in Nigeria.
What rules govern the provision of security information to port authorities?
The provision of security information to port authorities is governed by the International Ship and Port Facility Security Code, as implemented by the International Convention for the Safety of Life at Sea (Ratification and Enforcement) Act, and the International Ship and Port Facility Security Code Implementation Regulation.
What maritime risks must be covered under the law and what is the mandatory level of coverage?
This issue is not contemplated by the Marine Insurance Act.
Insurable risks and ships
What other risks are typically covered by marine insurance contracts concluded in your jurisdiction and what ships are insurable?
Risks typically covered by marine insurance contracts are those deemed to be a ‘marine adventure’ under the Marine Insurance Act, which includes exposure of ships and goods (ie, insurable property) to perils consequent on or incidental to navigation of the seas (eg, piracy, war and jettisons).
The earning or acquisition of any freight, passage money, commission, profit or other pecuniary benefit, or security for any advances, loan or disbursements, is endangered by the exposure of insurable property (ships and goods) to maritime perils.
Liability to a third party is incurable by the owner of (or other person interested in or responsible for) insurable property by reason of maritime perils.
There is no specification as to insurable ships under the Marine Insurance Act. However, the act recognises and imposes special regulations for steamships and ships engaged in special trade.
It seems that any type of ship can be insured pursuant to the Marine Insurance Act, as the act provides that a contract of marine insurance is where the insurer agrees to indemnify the assured, in a manner and to the extent agreed, against marine losses (ie, losses arising in relation to a marine adventure).
What is the legal regime governing marine insurers’ subrogation rights?
Marine insurers’ subrogation rights are governed by the Marine Insurance Act (particularly Section 80).
Jurisdiction and dispute resolution
What courts are empowered to hear maritime cases in your jurisdiction?
The competent courts empowered to hear maritime cases in Nigeria are:
- the Federal High Court (court of first instance);
- the Court of Appeal (appellate court); and
- the Supreme Court (court of final appeal).
Exclusive jurisdiction and arbitration clauses
Under what conditions will exclusive jurisdiction and arbitration clauses in shipping contracts be held as valid?
The Admiralty Jurisdiction Act vests exclusive jurisdiction in matters of admiralty on the Federal High Court and renders invalid any agreement seeking to exclude the jurisdiction of the courts. However, recent judicial attitudes seem to be inclined towards allowing arbitration where an arbitration clause is validly and unequivocally included in the contract.
What is the general state and prevalence of maritime arbitration in your jurisdiction?
Although it has recently attracted increasing attention in the sector, maritime arbitration in Nigeria is still in its infancy. It is not particularly prevalent in light of:
- the exclusive jurisdiction conferred on the Federal High Court by the Admiralty Jurisdiction Act; and
- the widespread trend of foreign counterparts or clients having standardised agreements already referring arbitration to their own or another universally recognised dispute resolution jurisdiction.
Recognition and enforcement
What regimes govern the recognition and enforcement of foreign judgments and arbitral awards?
The Foreign Judgments (Reciprocal Enforcement) Act 1961 and the Reciprocal Enforcement of Judgment Act Ordinance 1958 govern the enforcement of foreign judgments in Nigeria.