Ship arrest

International conventions

Which international convention regarding the arrest of ships is in force in your jurisdiction?

There is no international convention on the arrest of ships in force in Nigeria.

Claims

In respect of what claims can a vessel be arrested? In what circumstances may associated ships be arrested? Can a bareboat (demise) chartered vessel be arrested for a claim against the bareboat charterer? Can a time-chartered vessel be arrested for a claim against a time-charterer?

A vessel can be arrested in respect of claims classified as maritime claims by the Admiralty Jurisdiction Act 1991, which is the main legislation governing the arrest of ships in Nigeria. Maritime claims include claims arising from title to or ownership of a ship, possession of a ship, ship mortgage, mortgage of ship’s freight, salvage, damage done by or to a ship, wages of the master and crew, master’s disbursements, carriage of goods or passengers by ship, use or hire of a ship, supply of goods or services to a ship, port dues and so on.

The action for the claim would be commenced as an Admiralty action in rem against the vessel sought to be arrested.

Associated ships cannot be arrested in Nigeria.

A sister ship may be arrested where all the following circumstances exist:

  • the claim must have arisen in connection with a ship;
  • the person who would be liable for the claim in an action in personam must have been the owner or charterer or in possession or control of the ship when the cause of action arose; and
  • at the time when the claim is brought the person who would be liable in an action in personam must be the beneficial owner of all the shares in the (sister) ship against which the claim is brought.

A bareboat (demise) chartered vessel can be arrested for a maritime claim against the bareboat charterer where all the following circumstances exist:

  • the claim arose in connection with that vessel;
  • the bareboat charterer would be liable for the claim in an action in personam;
  • the vessel was on charter to the bareboat charterer as at the time the cause of action arose; and
  • the bareboat charter is still subsisting as at the date the action is commenced.

A time-chartered vessel cannot be arrested for a claim against the time-charterer.

Maritime liens

Does your country recognise the concept of maritime liens and, if so, what claims give rise to maritime liens?

Nigeria recognises the concept of maritime liens. The claims that give rise to maritime liens in Nigeria are as follows:

  • wages and other sums due to the master, officers and other members of the ship’s complement in respect of their employment on the ship;
  • disbursements of the master on account of the ship;
  • claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;
  • claims for damage done by a ship;
  • claims for salvage, wreck removal and contribution in general average; and
  • claims for ports, canals and other waterways, dues and pilotage dues.
Wrongful arrest

What is the test for wrongful arrest?

The test for wrongful arrest under the Admiralty Jurisdiction Act is obtaining the arrest of a ship or other property unreasonably and without good cause.

Bunker suppliers

Can a bunker supplier arrest a vessel in connection with a claim for the price of bunkers supplied to that vessel pursuant to a contract with the charterer, rather than with the owner, of that vessel?

If the charter is a demise charter and the charterer was in possession and control of the vessel at the time the cause of action arose and at the time action is brought, then the vessel can be arrested for the claim; otherwise, the vessel cannot be arrested for the claim.

Security

Will the arresting party have to provide security and in what form and amount?

The arresting party generally does not have to provide security before the vessel can be arrested.

In certain circumstances the arresting party may on the application of the defendants be ordered to provide security for costs, failing which the vessel will be released. The circumstances include where the claim is more than 5 million naira, or its equivalent in any currency, or where the court is satisfied that the arresting party has no assets in Nigeria.

The security for costs can be in the form of a deposit of the sum in court or a guarantee to be provided by a bank, insurance company or a P&I club.

How is the amount of security the court will order the arrested party to provide calculated and can this amount be reviewed subsequently? In what form must the security be provided? Can the amount of security exceed the value of the ship?

The Admiralty Jurisdiction Procedure Rules 2011 (AJPR) provide for security to be supplied by the arrested party in the amount claimed or the value of the ship or property under arrest. In practice the security is, very often, based on the claims of the arresting party and as requested in the application for arrest. There is no provision for revision of the security amount.

The AJPR provides for payment of cash into court or a bail bond in the same value to be filed in court. In practice, the form of security is usually according to the application of the arresting party, which is, most of the time, a bank guarantee from a Nigerian bank.

The amount of security cannot exceed the value of the ship. The AJPR provides for payment of cash or a bail bond for the amount claimed or the value of the ship, whichever is less.

Formalities

What formalities are required for the appointment of a lawyer to make the arrest application? Must a power of attorney or other documents be provided to the court? If so, what formalities must be followed with regard to these documents?

There are no special formalities required for the appointment of a lawyer to make an arrest application.

An Admiralty action in rem must be commenced in Nigeria against the vessel for the substantive claim before an application for arrest can be made. On average between 24 and 48 hours are required to prepare the originating processes for the suit and the arrest application. The length of time depends on factors such as the availability and volume of documents relevant to the transaction from which the substantive claim arose; the complexity of the transaction; and the lawyer’s experience, expertise, speed and so on.

Ship maintenance

Who is responsible for the maintenance of the vessel while under arrest?

The Admiralty Marshal, who is the chief registrar of the Federal High Court, is responsible for the maintenance of a vessel under arrest; all expenses of the Admiralty Marshal are required to be paid by the arresting party. The court, upon the grant of an arrest order, would generally order the arresting party to pay an amount not less than 100,000 naira and no more than 500,000 naira towards the Admiralty Marshal’s expenses. The Admiralty Marshal may make further demands fortnightly for payment on account of those expenses while the ship remains under arrest.

Proceedings on the merits

Must the arresting party pursue the claim on its merits in the courts of your country or is it possible to arrest simply to obtain security and then pursue proceedings on the merits elsewhere?

A suit by way of an action in rem must be commenced for the claim in the Nigerian Federal High Court and the vessel will be arrested in the suit. It is not possible to commence a suit simply to obtain security through the arrest of the vessel and then pursue proceedings elsewhere.

In certain circumstances, where there is an arbitration agreement, the court may, on application of an interested party who is party to the arbitration agreement, stay proceedings in the suit in Nigeria and order that the claims be referred to arbitration in accordance with the agreement. In such a situation, the vessel arrested or the bank guarantee furnished as security for release of the same will be retained by the court as security for the arbitration award.

Injunctions and other forms of attachment

Apart from ship arrest, are there other forms of attachment order or injunctions available to obtain security?

A claimant may also apply to the court for an order of interim attachment of property, otherwise known as a Mareva injunction. This is where it is anticipated that the defendant intends to dispose of his or her property or any part thereof or to remove any such property from jurisdiction. The claimant will apply to the court either at the time of the institution of the suit or at any time thereafter for such defendant to furnish sufficient security to fulfil any decree that may be made against him or her in the suit.

Delivery up and preservation orders

Are orders for delivery up or preservation of evidence or property available?

Generally, orders of injunction are available to restrain the performance of an act or to preserve evidence or property that is or is likely to become the subject of a dispute. The rules of court also allow for interim attachment of property.

Bunker arrest and attachment

Is it possible to arrest bunkers in your jurisdiction or to obtain an attachment order or injunction in respect of bunkers?

It is possible to arrest bunkers and to obtain injunctions or attachment orders in respect of bunkers.