Admiralty Jurisdiction of the Federal High Court: Real or Illusory?

This article by Chisa Uba, highlights the fact that the Admiralty Jurisdiction of the Federal High Court (FHC) conferred by the Constitution and detailed in the Admiralty Jurisdiction Act, has been somewhat dissipated by some court judgements, including those of the Apex Court; and requests that the challenges created by these decisions be addressed as a matter of urgency, to make the admiralty jurisdiction of the FHC more real than illusory, as it appears to be, presently

Introduction

The recent judgement of the Court of Appeal in CA/LAG/CV/419/2020 – The Vessel MT Sam Purpose & Anor v Amarjeet Singh Bains & Ors caused a major furore in the Nigerian maritime industry. The reason being that, the Court of Appeal had in the judgement held, based on Section 254C of the Third Alteration to the Constitution of the Federal Republic of Nigeria (CFRN), that a claim for crew wages was within the jurisdiction of the National Industrial Court of Nigeria (NICN). The Admiralty Jurisdiction Act (AJA) which defines the admiralty jurisdiction of the Federal High Court (FHC), lists claims for crew wages and masters’ disbursements as claims within the admiralty jurisdiction. Indeed, the claims are secured with a maritime lien on the vessel on which the master and crew served. The Third Alteration to the Constitution inadvertently transferred the jurisdiction for adjudication on these claims to the NICN, thereby depriving seafarers of the veritable weapon of a maritime lien on the vessel in which they served as security for their wages. While it is hoped that the Constitution will be amended soon to correct this anomaly, the admiralty jurisdiction of the FHC is however, still bedevilled with a major challenge.

Admiralty Jurisdiction of the FHC

The admiralty jurisdiction of the FHC is conferred on it by Section 251(1)(g) of the CFRN (as amended), and defined in detail by the AJA. The role of the judiciary under the CFRN is the interpretation of laws. On occasion however, the courts seemingly ignore express provisions of statutes in arriving at decisions based on preconceptions. This, alas, has for some time been the fate of the AJA before the Nigerian appeal courts.

Texaco v Pedmar

The Supreme Court’s unfortunate decision in Texaco Overseas (Nig) Petroleum Company Unlimited v Pedmar Nigeria Limited (2002) 13 NWLR (PT.785) 526 is a case in point. The claims in that case were for hire due on the charter of vessels. Pedmar, as Plaintiff, commenced the suit before the High Court of Lagos State, where it went to trial and a judgement delivered. The Defendant, Texaco Overseas, being dissatisfied with the judgement appealed to the Court of Appeal, and subsequently, the Supreme Court. It was at the Supreme Court that the defendant now appellant raised for the first time the issue of jurisdiction of the State High Court to entertain the suit in view of the provisions of section 2(2)(f) (sic) of the AJA and section 230(1)(g) of the Constitution (Suspension and Modification) Act, (sic) No. 107 of 1993 now section 251 (1)(g) of the CFRN.

Ejiwunmi J.S.C in the lead judgement held that the High Court of Lagos State was competent to entertain the suit. His Lordship in delivering the judgment quoted copiously from the judgment of the Supreme Court in the case of Petrojessica Enterprises Ltd. v Leventis Technical Company Ltd. (1992) 5 NWLR (pt.244) 675 (a cargo claim) and stated as follows at pages 543-544 paragraphs A-B:

“It must be observed that from the above pronouncements by the learned Justices of this court, the Admiralty Jurisdiction of the Federal High Court cannot be invoked, once the goods carried by a ship have been discharged in the harbour or delivered to the point of destination of the cargo. In any event, for a claim in admiralty to arise, the cargo or goods must still be in the vessel. …

The Appellant’s case is that, it indeed, chartered certain vessels, vis M. V. Brazil and M. V. Coastal Carrier at various times in 1995 and for various periods of charter.

From these facts it seems clear enough, though chartered vessels must have carried goods for the appellant, they have since been delivered without any mishap during the voyage of delivery. The Appellant cannot obviously resile from that fact, as they had even according to them, paid what they considered to be the sum for the charter of the various vessels. …

After due consideration of the facts narrated above, I am in no doubt that the contention of the appellant that this is a case whose facts are sound in admiralty cannot be right. This is simply a case of debt owed by the appellant to the respondent. The goods which the chartered vessels carried have quite clearly been delivered to the Appellant as agreed. I must therefore, resolve this question against the Appellant”.

With all due respect to the Apex Court, the judgement reproduced above is contrary to the express provisions of the AJA. Section 1(1)(a) of the AJA specifies that the following shall be within the admiralty jurisdiction

“… any question relating to a proprietary interest in a ship or aircraft or any maritime claim specified in section 2 of this Act;”

Section 2(3)(f) of the same AJA makes the following a maritime claim:

“a claim arising out of an agreement relating to the carriage of goods or persons by a ship or to the use or hire of a ship, whether by charter-party or otherwise” .

The above provisions are very clear, and do not require interpretation. The claims in the suit which arose out of an agreement for charter of vessels fall squarely within the purview of these provisions, and as such are within the admiralty jurisdiction of the FHC. Curiously His Lordship did not consider these provisions at all before arriving at a decision, even though counsel for the Appellant relied on Section 2(3)(f) in his argument.

The claims before the court, did not include a cargo claim. The parties did not raise the issue of the carriage of goods. The issue of carriage of goods was raised suo motu by the Supreme Court when it stated that “….. chartered vessels must have carried goods for the appellant” . Thus, the court was speculating that the vessels were chartered to carry goods, and thereby imported into the case the issue of carriage of goods which was not raised by either party. The judgement in the case was eventually based on this issue of carriage of goods in spite of the fact that “… a court of law is always confined to evidence before it. A court of law has no competence to arrive at conclusions on speculations or guess”. Ezemba v. Ibeneme (2004) 14 NWLR (pt. 894) 617 at 689 paragraphs C-D. Vessels are chartered regularly for purposes which do not include carriage of goods.

Moreover, even where the claims in Texaco Overseas had arisen from carriage of goods, the decision would still not have been in consonance with the law. Section 1 (2) of the AJA, clearly sets out the limits of the admiralty jurisdiction of the FHC in cargo claims as follows “the admiralty jurisdiction of the Court in respect of carriage and delivery of goods extends from the time the goods are placed on board a ship for the purpose of shipping to the time the goods are delivered to the consignee or whoever is to receive them whether the goods were transported on land during the process or not”.

There is no ambiguity whatsoever in the provision. Any loss or damage to the goods occurring or any other claims relating to the goods arising from the time the goods are loaded on the ship for the purpose of shipping until they are delivered to the receiver or consignee are within the admiralty jurisdiction. The admiralty jurisdiction of the FHC for cargo claims under the AJA covers the carrier’s usual period of liability under a contract for carriage of goods. Thus, even if the claims in Texaco Overseas Petroleum Unlimited v Pedmar Limited (supra) had included a cargo claim, the decision would still be contrary to the AJA.

Furthermore, and very unfortunately, the statement that “for a claim in admiralty to arise, the cargo or goods must still be in the vessel” makes the location of goods or cargo a test for admiralty claims, contrary to the AJA. Section 1(1) of the AJA lists out claims which fall within the admiralty jurisdiction, and none of the heads of claim suggest that the location of any cargo carried by a vessel would be a factor in determining whether a claim is an admiralty claim.

This test has since the Texaco Overseas decision been applied to many cases in determination of whether or not a particular claim is within the admiralty jurisdiction of the Federal High Court. In the case of Nomsal Marketing and Supplies Ltd. & Anor v Joasy Pen Enterprises Ltd (2005) LPELR-5981(CA) the Court of Appeal, relying on the judgement in Texaco Overseas, held that a claim for hire of a vessel was outside the admiralty jurisdiction. Other cases include Brawal Shipping (Nig) Ltd. v Aphrodite (Nig) Ltd (2004) 9 NWLR (Pt.879) 462; M.N.S. Ltd v J.P. Ent. Ltd. (2006) 5 NWLR (pt.972) 127; Ontario Oil & Gas Nigeria Ltd v FRN (2015) LPELR-24651(CA); Adaoha Ugo-Ngadi v Federal Republic of Nigeria (2015) LPELR-24824(CA) TSKJ (Nig) Ltd V. Otochem (Nig) Ltd (2018) LPELR-44294(SC).

Ontario v FRN & Adaoha Ugo-Nagadi v FRN

The cases of Ontario Oil & Gas Nigeria Ltd v FRN (supra) and Adaoha Ugo-Ngadi v Federal Republic of Nigeria (supra) were criminal charges not cargo claims, yet the Court of Appeal even after reviewing Sections 1(1)(j) and 19 of the AJA, held that because cargo had been discharged from vessels, the admiralty jurisdiction can no longer be invoked. Section 1(1)(j) of the AJA puts the following firmly within the admiralty jurisdiction “any criminal cause and matter arising out of or concerned with any of the matters in respect of which jurisdiction is conferred by paragraphs (a) to (i) of this subsection”; while section 19 provides that “Notwithstanding the provisions of any other enactment or law, the Court shall, as from the commencement of this Decree, exercise exclusive Jurisdiction in admiralty causes or matters, whether civil or criminal”. Indeed, the court stated in Adaoha Ugo-Ngadi’s case that Section 19 of the AJA was contrary to the CFRN even though section 251(3) provides that “The Federal High Court shall also have and exercise jurisdiction and powers in respect of criminal causes and matters in respect of which jurisdiction is conferred by subsection (1) of this section”.

Pacers Multi-Dynamics v M.V.Dancing Sister

In the case of Pacers Multi-Dynamics Ltd v The M.V. Dancing Sister & Anor (2012) LPELR-7848(SC) Ngwuta JSC in his supporting judgement stated as follows “Be that as it may, there is nothing in the record of the two lower Courts to indicate that the goods were still on board the ship at the time the action was initiated. The rule is that the admiralty jurisdiction of the Federal High Court cannot be invoked once the goods on board a ship have been discharged on the harbour or delivered to the point of destination of the cargo. For the admiralty jurisdiction to be properly invoked, the goods or cargo must remain in the vessel…” Based on this, he held that even if the Plaintiff in the case had been the consignee and not a notify party, the claim would not have been within the admiralty jurisdiction of the FHC.

The above statement, aside from being inconsistent with the law, proposes an almost impossible situation. The suggestion being that once goods are discharged from the vessel, an admiralty action can no longer be commenced for claims relating to same no matter when the issue complained of occurred. This interpretation creates an almost impossible situation. The cargo or at least a substantial portion thereof must be discharged from the vessel before the extent of loss or damage to the same while on board the vessel can be ascertained. Since the cargo receiver would need to ascertain the level of loss or damage if any before commencing an action, a proposition that once cargo is discharged from vessel the admiralty jurisdiction is extinguished is very impractical.

The admiralty jurisdiction of the court is determined by the time of accrual of the cause of action, and not the time of commencement of action or the location of the cargo when action is commenced. The cause of action for cargo claims accrues when the loss or damage complained of occurred, not when action is commenced.

The decisions described above are particularly worrisome because they essentially strip the FHC of almost all admiralty jurisdiction. The decisions make cargo a test for admiralty jurisdiction whereas claims related to carriage of goods are only a fraction of the admiralty jurisdiction of the FHC. By using the location of cargo as a test for claims falling within the admiralty jurisdiction, the FHC will be unable to exercise jurisdiction over other claims not related to cargo and indeed even cargo claims. The admiralty jurisdiction essentially revolves around the ship, its activities, facilities and bodies/agencies involved/affected in its activities, not cargo.

His Lordship in justifying the decision in Texaco Overseas stated inter alia that “This is simply a case of debt owed by the appellant to the respondent”. With respect to the Apex Court, most monetary claims are claims for debt owed by the defendant to the plaintiff. The jurisdiction of the court depends on, among other things, how the debt arose and not on the fact that a debt is owed.

Another curious test for admiralty jurisdiction introduced by the appellate courts in disregard of section 251(1)(g) of the CFRN and the AJA is the issue of contract. In the case of Iroegbu v MV Calabar Carrier (2008) 5 NWLR (Pt. 1079) 147, Galinje, J.C.A in his supporting judgment stated that “By virtue of section 251(1)(p) of the 1999 Constitution, a claim for breach of contract simpliciter does not fall within the admiralty jurisdiction of the Federal High Court. [Onuorah v Kaduna Refining Co. Ltd. (2005) 6 NWLR (Pt.921)393. 7-Up Bottling Co. Ltd. v Abiola & Sons (2001) 13 NWLR (Pt.730)469; Trade Bank Plc v Banilux (Nig.) Ltd. (2003) 9 NWLR (Pt. 825) 416.]”.

The admiralty jurisdiction of the Federal High Court is conferred by section 251 (1) (g) not 251 (1) (p). The admiralty jurisdiction is not the only jurisdiction conferred on the FHC by Section 251 (1) of the CFRN, the other sub-sections of 251 (1) state clearly other types of jurisdiction exercisable by the FHC aside from its admiralty jurisdiction. Section 251(1)(p) confers jurisdiction on the FHC over “the administration or the management and control of the Federal Government or any of its agencies”, this is clearly not part of the admiralty jurisdiction conferred by sub-section (g).

The AJA, which defines the admiralty jurisdiction is replete with agreements that are within the admiralty jurisdiction, these include agreements for carriage of goods or persons by ship, agreements for hire of a vessel, agreements to supply services to a vessel and so on. The determinant of jurisdiction is the subject of the contract and not the fact that there is a contract.

Upon being faced with the fact that many agreements are listed as within the admiralty jurisdiction by the AJA, some courts attempt to draw a distinction by stating that simple contracts are not within the admiralty jurisdiction. What is a simple contract? The Court of Appeal in the case of Power Products Int. Limited v Wema Bank Plc. (2012) LPELR-7952 pg. 29-30, paras. G-A adopted the definition given to the phrase by Professor Sagay (SAN) in his Book “Nigerian Law of Contracts,” spectrum law series 2nd Edition, published by sweet and Maxwell, page 4 which is “all contracts other than formal contracts or contracts required to be under seal.”

Most of the agreements within the admiralty jurisdiction, are not required by any statute to be under seal or in writing. The contracts do not have to be formal. Thus, going by the definition reproduced above, most of the agreements specified as within the admiralty jurisdiction are indeed simple contracts. The distinction of simple contract is therefore, not defensible. Using the existence of a contract, simple or otherwise, as a test for determining jurisdiction, instead of the subject of the contract, has the effect of stripping the FHC of the admiralty jurisdiction duly conferred on it by the CFRN, much like the cargo test earlier discussed.

Decisions like the ones described above are extremely disturbing, in view of the doctrine of stare decisis in Nigeria’s legal system. There is no gainsaying the fact that, aside from the obvious hardship to litigants who will be unfairly deprived of recourse to the admiralty jurisdiction, especially actions in rem, the situation is having an adverse effect on the development of Nigerian admiralty case law.

Conclusion

The tests of cargo and simple contract, strip the FHC of all admiralty jurisdiction. Indeed, the decision in the MV Sam Purpose case mentioned above, would likely have been the same even without the Third Alteration to the CFRN, since it would undoubtedly have failed the cargo test. There is therefore, an urgent need for correction of this major challenge to the admiralty jurisdiction created by the above cases and others like them, because, sadly, the admiralty jurisdiction of the Federal High Court is presently more illusory than real.