Legal safety of Nigeria's ports

IN the recent past, ships sailing into Nigerian waters have faced such a high risk of arbitrary, wrongful and malicious detention that many consider the ports to be outright legally "unsafe". Certainly it is well-known that a great number of claims filed in the courts by itinerant cargo claimants are not calculated to resolve genuine disputes, but to blackmail owners into rendering swift monetary settlement of the most contrived of claims. Some very vicious and expensive contests have resulted.

In one case a vessel was detained for three months on a trumped-up claim of $ 1million when its owner could not post security. Finally, the cargo claimant happily compromised its claim for $50,000 paid in cash in London. In another incident, an order for appraisal and sale was obtained in respect of a claim for $50,000, which arose because the claimant's car was allegedly damaged in a motor accident on the way from servicing a ship's airconditioning.

A particularly disgraceful case involved the detention of a vessel and its entire complement of Ukrainian crew for two years at the behest of a local dignitary in Sapele in respect of a grossly inflated claim for partial loss of a cargo of rigs in a storm.

A few ships have been trapped by pointless and interminable legal disputes to the point that the owners have abandoned them in the middle of navigable waterways. In other cases, vessels have been detained by abuse of powers appropriated by various arms of the military government, whose rule happily came to an end on May 29 this year.
Another contingency that attended the late military government was political and physical risk accompanying traffic in oil-producing areas. For at least the past two years, the Niger Delta, the main site of these operations, has been in a state of virtual civil war.

In the area of personal injuries - and especially in the case of an injury sustained by a member of the volatile Dockworkers Union - a highly charged emotional environment may emerge. In this atmosphere, reason and logic are often the first casualties. The death or injury of a dock worker can represent an opportunity for the union and certain officials and agents connected with the ports to make financial gain. In the interests of "commerce", established procedures for insurance and compensation may be subverted. Unwittingly, Nigeria's admiralty court, when administered by a small number of timid or inexperienced judges, has lent its weight to this blackmail. The threat of arrest has therefore been very effective, especially against ships with no P & I or defence cover. Added to the risk is the incompetent management of the ports.

The ports

Nigerian ports are public property, operated by the Nigerian Ports Authority (NPA) which is enjoined to "provide and operate in the ports, such port facilities as appear best to serve the public interest". These facilities include those necessary for "the loading and unloading of goods or embarking or disembarking of passengers from a ship". In fulfilment of this authority, the NPA "owns" the docks, and it licenses and controls all dock labour through the various stevedoring companies.

Each stevedoring company, or contractor, inherits along with the allocated berth a pool of dock workers who load and discharge cargo from ships berthing there. For this service, the vessel pays the NPA , from whom the stevedoring contractor subsequently recovers part of that payment. There are those who regard this as little more than indentured slavery, yet the system has prevailed.

As a result of this arrangement, the master of the vessel does not engage stevedores for the purpose of discharging a particular vessel, as it has been placed within the complete control of the NPA. In this role, the NPA is neither the agent of the shipper nor of the shipowner. The legal relationship is anomalous and complicated.

This regime is the primary basis for volatility in industrial relations and for peremptory and frequent labour disruptions. In circumstances where the stevedore sues the vessel for wrongs committed, the vessel ought to try and fix either the NPA or the stevedoring company with the liability. This opportunity is often lost, however, in the physical contest that follows an incident.

Official intervention

Even if all necessary requirements can be established, there are certain provisions in the Nigerian Ports Decree which afford Nigerian ports a degree of protection, by way of limitation of value and of time for commencing action.

As if these complications were not sufficient to hamper maritime traffic, government bodies have been involved in further interference.

In April 1997, the Nigerian Shippers Council (a body created by decree to " provide a forum for the protection of the interest of shippers in matters affecting the shipment of imports and exports to and from Nigeria and to advise the federal government on sundry matters related thereto") purported to unilaterally impose a maximum tariff of freight and other charges related to maritime transport in Nigeria. This intervention was made without regard to the poor facilities in the ports, and has spawned keenly contested litigation.

The regulation is typical of the confusing mass of unhelpful laws enacted by successive military regimes, intervening in maritime transport for private reasons. Under the Territorial Waters Act, the vessel is subject to arrest, entry and seizure for any offence committed in Nigerian waters, even before liability is established. For "economic sabotage" (an expression, which covered almost every conceivable activity that it might take the fancy of the authorities to investigate), detention of assets was normal.

The Special Tribunal (Miscellaneous Offences) Act created "special offences" triable by special tribunals consisting of a judge and three military personnel. These offences attract stiff sentences ranging from fourteen years to life imprisonment, and exclude recourse to civil proceedings to challenge actions taken or purported to be taken, including any inquiry as to whether any of the fundamental rights in the constitution have been infringed.

Several statutes provide for fines as well as terms of imprisonment for the consequences of accidents in Nigerian waters. The Federal Environmental Protection Act established an agency with powers of search, seizure and arrest in enforcement of the provisions of the act. The spill contemplated by the act is attributed to the owner or operator of a vessel. The onus is on such owners or operators to establish the cause. They are only excused if the cause is solely the result of a natural disaster, an act of war or sabotage.

Offences against the act by bodies corporate, partnerships or businesses expose every director, officer, member or other persons connected with the management of the business to a fine on conviction of about $5,000. In addition, they are required to pay compensation for any damage resulting from such breach thereof or to repair and restore the polluted area to an acceptable level as approved by the agency unless they can prove to the satisfaction of the court that due diligence was used to secure compliance with this act, and that such offence was committed without their knowledge, consent or connivance.

In the area of personal injuries - and especially in the case of an injury sustained by a member of the volatile Dockworkers Union - a highly charged emotional environment may emerge. In this atmosphere, reason and logic are often the first casualties.

Recourse to judicial review

Although many of these laws are still on the statute book, the military government has now ceased to function. In May 1999, Nigeria elected and inaugurated a civilian government which is already making efforts to meet the great expectations invested in it. In this regard, facilitating foreign investment and maritime traffic, the reform of enabling laws and the legal regime are urgent concerns, and the recognised role of the courts in reviewing laws and legal policy is critical in this regard.

Admiralty laws

In 1991, a new Admiralty Jurisdiction Act clearly defined the jurisdiction of the federal high court and made the jurisdiction exclusive. The law created many new opportunities for Nigerian cargo claimants, and extended the jurisdiction to "maritime claims wherever arising". In 1993, the chief judge of the federal high court addressed some of the attendant problems in a new set of Admiralty Jurisdiction Procedure Rules.

Among the important provisions is the requirement for applications for release to be heard within three days of filing, and the elevation of the P&I letter of undertaking to the status of a bail bond recognisable by the court. The rules also expressly provide that a claimant must give security for costs of an arrest upon the carrier's application. The level of security is in the court's discretion, but is not limited to legal costs. It may include likely damages for a wrongful arrest, and will be ordered in particular for claims over a million naira (about $10,000). The security must be provided by way of deposit or bank guarantee.

Finally, the rules provide, for the first time, for a system of caveats against arrest. The undertaking made is enforceable by the court as a judgment against the caveator, and a writ against the vessel for which a caveat has been filed shall be served on the caveator who, within three days, must pay into court the sum claimed, or enter a bail bond for the same amount. The rules allow a caveator to apply for the discharge or non-execution of an order of arrest, in order that it can fulfil its undertaking and abort the arrest.

These rules, along with the momentum for reform in the legal system generally, provide a bright ray of hope. A new Dock Labour Decree was passed by the outgoing military government and its inevitable review will address the problems of dock labour and legal unrest at the ports. Privatisation of the utilities and the ports is regarded as an economic necessity and as a priority by the government. In addition all military and special tribunals have been abolished and the jurisdiction reverted to the regular courts under constitutional procedure. Added to this, the new government has already taken steps to attack the rampant corruption, which - disgracefully - afflicted even the judiciary. The chilling message has already resulted in a new alertness on the part of the judges. Some of the incumbents are not likely to survive in office. This can only work to make Nigeria a safer place for business generally, and for maritime traffic in particular.