Maritime Law in Nigeria

The freedom and autonomy of contract is a fundamental principle of contract law. This principle has been reiterated in a plethora of cases, including in a recent 2021 decision of the Supreme Court of Nigeria, in the case of STATOIL (NIG.) LTD. V. INDUCON (NIG.) LTD.[1] Flowing from this principle, parties to a charter party[2] may make provisions in the contract for the governing law clause and an arbitral clause in resolving any dispute arising from the contract. Section 20 of the Admiralty Jurisdiction Act[3] (“AJA”), however, seems to have departed from this fundamental principle of freedom of contract.


Section 20 of the AJA provides that any agreement by which the parties to any cause or matter seek to oust the exclusive admiralty jurisdiction of the Federal High Court shall be null and void if the cause or matter relates to any admiralty matter falling under the AJA, and if the cause or matter has any connection to Nigeria. In the case of JFS INV. LTD. V. BRAWAL LINE LTD.,[4] the Supreme Court took judicial notice of the Section 20 of the AJA, and held that the Admiralty Jurisdiction Act 1991 had virtually removed the element of courts discretion in deciding whether or not to uphold a foreign jurisdictional clause. Nigerian law will be applicable, accordingly, as the law of the charter party falling under the AJA, and if the cause or matter has any connection to Nigeria, as provided for under Section 20 of the AJA.


It should be noted that the agreement to resort to judicial proceeding is different from the one to resort to arbitration proceedings. While foreign jurisdictional clause tends to oust the jurisdiction of the court on the matter, foreign arbitration clause only postpones the right of either of the parties to the agreement to resort to litigation in Court whenever the other contracting party elects to submit the dispute under the agreement to arbitration; in which the court will lean towards enforcing the clause, not by striking out the case for want of jurisdiction but by staying proceedings pending arbitration, based on provisions of Sections 4 and 5 of Arbitration and Conciliation Act[5] (“ACA”). The Supreme Court in this year's decision, 2022, in the case of SAKAMORI CONSTR. (NIG.) LTD. V. L.S.W.C.,[6] interpreted Sections 4 and 5 of the ACA as follows:

“Section 5(1) of the Act envisages an application for stay of proceedings which the court has the discretion to grant or refuse as can be deduced from section 5(2). Section4 of the Act envisages a situation where arbitral proceedings may be commenced or continued and concluded while the matter is pending before the court.”

The International Convention for the Unification of Certain Rules Relating to Bills of Lading and Protocol of Signature 1924 (“The Hague Rules”), adopted on August 25th 1924, was the only international convention applicable to bills of lading in Nigeria, prior to the domestication of the United Nations Convention on Carriage of Goods by Sea 1978 (“The Hamburg Rules”), adopted on 31st March 1978, but it took effect on 1st November 1992. The Hague Rules makes no provision for arbitration. The following landmark decisions were made under the Hague Rules regime.

In 2003, the Supreme Court in the case of Owners of the M.V. LUPEX V. NIGERIAN OVERSEAS CHARTERING AND SHIPPING LIMITED[7], by applying the discretionary power of Section 5 of the ACA, reversed the decisions of both the trial court and the Court of Appeal; and enforced a foreign arbitration clause in a charter party. It must be pointed out that the Supreme Court did not consider the implications of Section 20 of the AJA.

In MV PANORMOS BAY & ORS V. OLAM (NIG) PLC[8] and LIGNES AERIENNES CONGOLAISE V. AIR ATLANTIC (NIG) LTD.[9], however, the Court of Appeal refused to allow a stay of proceedings in maritime claims, giving effect to foreign arbitration clauses, on the basis of Section 20. The two grounds for the decision given by the Court are: (1) that such clauses were ouster clauses prohibited by Section 20 of the AJA; and (2) that Section 20 had effectively modified Sections 2 and 4 of the ACA, limiting enforceable arbitration agreements to those having Nigeria as their forum.

The Hamburg Rules, on the other hand, makes provision for arbitration in Article 22. Accordingly, The Court of Appeal, under the Hamburg Rules regime, had cause to review its early decision in MV PANORMOS BAY (decided under the Hague Rules), six years after. The opportunity came in ONWARD ENTERPRISES LIMITED V. MV “MATRIX” & 2 ORS.[10] The Court held that Section 20 of the AJA did not prevent the enforcement of a foreign arbitration clause in a bill of lading; by applying the discretionary power, and by relying on the earlier Supreme Court decision in M.V. LUPEX case. In a 2018 decision, also, in the case of MEKWUNYE v. LOTUS CAPITAL LTD & ORS.,[11] the Court of Appeal reaffirmed its position in the ONWARD ENTERPRISES LIMITED case.

Flowing from the above, the current judicial policy is that the court, by exercising the discretionary power conferred on it by Sections 5 of the ACA, will enforce a foreign arbitration clause in a charter party; pending the review of the law by the Supreme Court.

[1] (2021) 1 NWLR (Pt. 1774) 1 SC

[2] A charter party like a normal contract or agreement is negotiated by the parties or their agents and it takes various forms although there are standard forms. See AWOLAJA V. SEATRADE GRONINGEN B.V. (1993) 3 NWLR (Pt. 280) 209 CA

[3] Cap A5, Laws of the Federation of Nigeria, 2004.

[4] (2010) 18 NWLR (Pt. 1225) 495

[5] Cap. A18, Laws of the Federation of Nigeria, 2004

[6] (2022) 5 NWLR (Pt. 1823) 339 SC

[7] [2003] 15 NWLR (Pt. 844) 469.

[8] (2004) 5 NWLR (Pt. 865) 1

[9] (2005) 11 CLRN 55

[10] (2010) 2 NWLR (Pt.1179) 530

[11] (2018) LPELR-45546(CA)