The main domestic laws establishing the authority of the admiralty courts in Nigeria are the Constitution of the Federal Republic of Nigeria 1999 (as amended) (the “Constitution”), the Admiralty Jurisdiction Act (AJA) and the Federal High Court (FHC) Act, which vests the FHC with exclusive jurisdiction over first-instance maritime and shipping matters in Nigeria.

All appeals from the FHC (including shipping disputes) go to the Court of Appeal of Nigeria, and, thereafter, to the Supreme Court of Nigeria. The common maritime claims in Nigeria are proprietary and general maritime claims as defined by the AJA. Proprietary maritime claims relate to the title, ownership, possession, or mortgage of a ship, a share in a ship or its freight, and the enforcement of a judicial decision made against a ship. General maritime claims include claims for:

• damage done or received by a ship;
• crew wages;
• goods, materials, or services  supplied or to be supplied to a ship for its operation or maintenance;
• loss of or damage to goods carried by a ship; and
• claims for the enforcement of, or claims arising out of, arbitral awards.

The Memorandum of Understanding on Port State Control for West and Central African Region applies to Nigeria, and the Nigerian Maritime Administration and Safety Agency (NIMASA) is Nigeria’s port state control agency.

The NIMASA’s general port state control powers and authorities, pursuant to the NIMASA Act, the Merchant Shipping Act 2007 (MSA) (which domesticates several maritime conventions, such as the United Nations Convention on the Law of the Sea (UNCLOS)) and other relevant legislation, include powers to:

• board, inspect and search any vessel and to detain any vessel within the Nigerian maritime zone;
• expel any vessel which may endanger the safety of the Nigerian maritime zone; and
• enter ports, terminals and vessels to investigate matters related to maritime labour, ship safety and security.

In relation to marine casualties, the NIMASA is authorised and empowered to:

• provide search-and-rescue services;
• receive and remove wrecks;
• make enquiries as to shipwrecks, other casualties affecting ships, or as to charges of incompetence or misconduct on the part of seafarers in relation to those casualties; and
• issue regulations governing the carriage of harmful substances by sea.

The registration of vessels under the Nigerian flag is primarily governed by the MSA. Other relevant legislation includes the NIMASA Act and the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Cabotage Act”).

The Nigerian Ship Registration Office (NSRO) (domiciled within NIMASA and under the control of the Registrar of Ships) is responsible for the domestic registration of vessels in Nigeria.

Under Section 18(1) of the MSA, the registration of vessels under the Nigerian flag is limited to vessels wholly owned by (i) Nigerian citizens, (ii) bodies corporate and partnerships established under and subject to Nigerian law and having their principal place of business in Nigeria, and (iii) such other persons as the Minister of Transportation (the “Minister”) may, by regulation, prescribe.

Notwithstanding, Section 19(6)–(9) of the MSA permits a foreign-owned vessel, which is bareboat-chartered for more than one year to a Nigerian citizen or a Nigerian body corporate or partnership, to be registered under the Nigerian flag as a Nigerian ship for the duration of the bareboat charter. This is, however, subject to the suspension of the foreign flag of the foreign-owned vessel in favour of the Nigerian flag registration for the duration of the bareboat charter.

Where a foreign-owned and bareboat-chartered vessel is to engage in cabotage operations within Nigerian waters, it is required to be registered under the Special Register for Cabotage (Bareboat-Chartered Vessel). Further to the Coastal and Inland Shipping Cabotage (Bareboat Registration) Regulations 2006, eligibility for the Special Register for Cabotage (Bareboat-Chartered Vessel) requires (i) the vessel to be bareboat-chartered to Nigerian citizens and to be under the full control and management of Nigerian citizens or a company, wholly and beneficially owned by Nigerian citizens, where all the shares in the company are held by Nigerian citizens, free from any trust or obligation in favour of any person not a citizen of Nigeria, and (ii) the bareboat-charter period must be for at least five years.

By virtue of Section 34(1) of the NIMASA Act, small vessels, including fishing vessels, which are wholly or partly owned by Nigerian citizens and foreigners who are resident in Nigeria, are registrable under the Nigerian flag.

Whilst the MSA requires the Registrar of Ships to keep a register for ships that are under construction in Nigeria, only a fully constructed vessel can be registered under the Nigerian flag as a Nigerian ship.

The MSA permits the issuance of Provisional Certificates of Registry for provisional registration of vessels under the Nigerian flag. Accordingly, vessels that are (i) located in a foreign country and owned by persons eligible to register a vessel under the Nigerian flag, and (ii) to be registered under the Nigerian flag, may be issued Provisional Certificates of Registry to sail the vessels to Nigeria. A Provisional Certificate of Registry is valid for six months or until the vessel’s arrival at a Nigerian port, whichever is earlier.

In other circumstances, Provisional Certificates of Registry are issued to vessels that are within Nigerian waters and owned by persons eligible to register a vessel under the Nigerian flag, but who have yet to fulfil the requirements for permanent registration and the issuance of a Certificate of Nigerian Registry.

Nigerian law does not permit dual registration of vessels and a vessel can fly the flag of only one country at a time. As such, where a vessel is registered under a foreign flag, (i) a deletion certificate, from the foreign flag, is required for temporary or permanent registration under the Nigerian flag, or (ii) a suspension certificate is required, from the foreign flag, for the duration of the bareboat charter, for the registration of a foreign bareboat-chartered vessel under the Nigerian flag.

Nigerian Mortgages

The Registrar of Ships is responsible for the registration of mortgages on Nigerian-registered ships. Where the mortgagor is a Nigerian-registered company, the ship mortgage must be registered with the Corporate Affairs Commission (CAC).

For the registration of a ship mortgage, the required documents include:

• the NSRO’s consent to a mortgage;
• a formal letter of application by the ship-owner or their authorised representative;
• a board resolution of the owners, authorising the mortgage (corporate owners only);
• a duly signed and sealed NIMASA mortgage form, with stamp duty paid;
• an executed deed of mortgage, duly stamped; and
• a copy of a Certificate of Registration of Mortgage, as issued by the CAC.

For registration of a ship mortgage with the CAC, the required documents include:

• a formal letter of application by the ship-owner or their authorised representative;
• an executed deed of mortgage, duly stamped;
• a duly signed and sealed statutory Form CAC 9 (Particulars of Charge), with stamp duty paid;
• a board resolution of the owners, authorising the ship mortgage; and
• evidence of payment to the CAC of the required statutory fees.

Foreign Mortgages

A duly registered foreign mortgage on a foreign-owned and bareboat-chartered vessel (duly registered under the Nigerian flag) may be notated at the NSRO for the duration of the bareboat charter to a Nigerian citizen or a Nigerian body corporate or partnership.

For the notation of a registered foreign mortgage on a foreign-owned and bareboat-chartered vessel (that is duly registered under the Nigerian flag) with the NSRO, the required documents include:

• a formal letter of application by the mortgagee or its authorised representative;
• an executed copy of the foreign law-governed deed of mortgage;
• a copy of the transcript of registry (or any other similar document) confirming the registration of the foreign law-governed deed of mortgage with the relevant foreign ship registry; and
• evidence of payment to the NIMASA of the prescribed fees for foreign mortgage notation.

In Nigeria, the ship-ownership and mortgage registries are not available to the public.

A person who is not the owner of a vessel must apply formally to the NSRO to conduct a search on the status of registration of a ship or mortgage over a ship.

The key terms and operative provisions of a typical ship loan financing agreement in Nigeria include the following.

• Purpose: defines the use of the facility and the specific project/transaction it intends to fund.
• Conditions precedent: specifies the documents, approvals and requirements to be satisfied before the lender will permit the borrower to drawdown on the facility.
• Conditions subsequent: sets out the documents, approvals and requirements (including timeline) that the borrower must fulfil after the initial drawdown of the facility.
• Utilisation: outlines the process for submitting drawdown requests and the terms on which the lender will disburse the facility.
• Payment terms: provides the framework for mandatory and voluntary prepayments, interest, fees, taxes, etc.
• Security: sets out the securities to be provided by the borrower to secure its obligation under the facility documents.
• Indemnities: obliges the borrower to reimburse the lender for defined losses/costs/liabilities arising from certain events relating to the financing arrangement.
• Undertakings: sets out the covenants that the borrower agrees to be bound by for the tenor of the facility – environmental, financial, information, sanctions and AML, vessel facility tenor.
• Representations and warranties: factual and legal assurances given by the borrower, which form the basis on which the lender advances the loan.
• Insurances: specifies the insurance cover for the vessel.
• Event of default: identifies the circumstances that entitle the lender to accelerate the loan, enforce its security.
• Governing law and dispute resolution: the facility agreement typically confirms Nigerian law and Nigerian courts as the governing law and primary forum for resolving disputes arising under the transaction. It is also common for the lender to retain an exclusive right to refer disputes to arbitration, notwithstanding the court jurisdiction provisions, with the terms of the arbitration agreement expressly set out therein.

The key terms and operative provisions of a typical ship mortgage in Nigeria include the following.

• Covenant to pay: the mortgagor undertakes to pay all the secured obligations to the lender (as mortgagee) (free of any taxes and deductions) in accordance with the terms of the facility agreement and the mortgage.
• Legal mortgage: establishes a registered legal mortgage over the vessel in favour of the mortgagee as security for the secured obligations. It will also state the timeline when the mortgage is to be duly registered with the relevant authorities.
• Undertakings: sets out the covenants that the mortgagor agrees to be bound by for the tenor of the mortgage – insurances, charters, security, financial, operational and environmental.
• Assignment of earnings, insurance, and requisition compensation: this covers the assignment of the vessel’s earnings, insurance, and requisition compensation to the mortgagee as additional security.
• Mortgagee’s power to protect security: allows the mortgagee to take necessary steps to safeguard the security, including remedying the mortgagor’s failures.
• Event of default: identifies the circumstances that entitle the mortgagee to exercise its enforcement rights under the mortgage.
• Mortgagee’s power of enforcement: sets out the mortgagee’s rights and remedies upon the occurrence of an event of default.
• Attorney: appoints the mortgagee as attorney of the mortgagor to act in relation to the vessel, usually triggered by a listed event of default.
• Proceeds of sale: sets out the order in which the proceeds from the mortgage (be it via a sale of the vessel or the vessel’s insurance proceeds) are to be applied.
• Governing law and dispute resolution: the ship mortgage typically confirms Nigerian law and Nigerian courts as the governing law and primary forum for resolving disputes arising under the transaction. The mortgage also recognises that disputes may be commenced in the courts of any jurisdiction (other than Nigeria) where the vessel may be found. It is also common for the mortgagee to retain an exclusive right to refer disputes to arbitration, notwithstanding the court jurisdiction provisions, with the terms of the arbitration agreement expressly set out therein.

The most common ship loan financing transactions are in relation to the purchase and lease of second-hand vessels, building/construction of new vessels and working capital. These transactions are usually funded through loans from banks and other financial institutions, as well as by shareholders and intercompany/related entities.

Security packages other than mortgages include:

• personal guarantees – from the shareholder(s) and/or director(s) of the borrower;
• corporate guarantees from a guarantor, usually a related company;
• assignment of the earnings of the ship;
• assignment of insurances of the ship;
• assignment of requisition compensation;
• deed of account(s) charge; and
• charge other assets of the borrower/guarantor.

Ship leasing transactions are increasing in Nigeria and the growth is most evident in the oil and gas value chain. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported that Nigeria’s rig count rose from 8 in 2021 to 69 in 2025, representing a 762.5% increase. This is significant for ship leasing as each rig drives a support spread of chartered tonnage, notably Platform Supply Vessels (PSVs), Anchor Handling Tug Supply (AHTS) vessels, crew boats and barges for exploration, production and evacuation support. Additionally, according to the Equipment Leasing Association of Nigeria (ELAN) 2025 Outlook Report, the oil and gas sector held 25% of leases worth NGN1.1 trillion. The report also noted that operating leases remain dominant in the oil and gas and its supporting maritime sectors. Overall, the surge in rig activity and oil and gas operations in Nigeria has translated into demand for leased vessels, as oil and gas operators seek cost-efficient and fit-for-purpose maritime assets to support their logistics.

No published or industry-wide research tracks shifts in vessel financing patterns in Nigeria. However, the authors’ experience in the space suggests that traditional bank lending continues to dominate vessel financing activity in the Nigerian market. Some growth has been observed in alternative credit arrangements, particularly shipyard/supplier credit financing and bareboat charter party with an obligation to purchase. Private equity participation and the use of Chinese leasing houses exist, but they are mainly de minimis.

In Nigeria, there are no differences in the treatment/enforcement of ship mortgages and lease defaults by courts or arbitral tribunals.

Vessel sale-and-leaseback transactions exist in Nigeria but are not common. 

Pollution

Pursuant to Section 12 of the Constitution, every Convention is required to be domesticated by the National Assembly before it can have force of law in Nigeria. Section 335(1)(i) of the MSA domesticated some international conventions that govern the liability of owners and interested parties for pollution by vessels, including:

• the International Convention for the Prevention of Pollution from Ships, 1973/1978 and the annexes thereto;
• the International Convention on Civil Liability for Oil Pollution Damage 1992; and
• the Convention on Limitation of Liability for Maritime Claims, 1976 (LLMC) and the 1996 Protocol thereto.

Other Nigerian laws relating to pollution include:

• the Environmental Impact Assessment Act, Cap E12, Laws of the Federation of Nigeria (LFN), 2004;
• the National Environmental Standards and Regulations Enforcement Agency Act, 2007;
• the NIMASA Act;
• the Anti-Fouling Systems Regulations 2012; and
• the Prevention of Oil Pollution Regulations 2012.

Wreck Removal

The MSA is the primary domestic legislation governing the liability of owners and interested parties for wreck removal in Nigeria. Section 364 of the MSA provides that where any wreck is determined to constitute a hazard, the Receiver of Wreck shall ensure that all reasonable steps are taken to mark the wreck. Section 365 of the MSA then places the responsibility for the removal of any ship that becomes a wreck on her owners.

Nigeria is a signatory to the Nairobi International Convention on the Removal of Wrecks, 2007 (the “Nairobi Convention”). However, the Nairobi Convention does not have the force of law in Nigeria, as the National Assembly has yet to enact legislation to domesticate it, in accordance with the Constitution.

The MSA has domesticated the following international conventions, which will impact the liability of owners and interested parties in the event of collision and salvage:

• International Convention for the Safety of Life at Sea (SOLAS);
• 1988 Protocol relating to SOLAS and Annexes I to V thereto;
• Search and Rescue Convention, 1979; and
• International Convention on Salvage, 1989.

The MSA, in Sections 337 to 342, provides for liability in collision cases. In particular, Section 344 provides that the damages recoverable by the claimant in a collision case shall be the restoration of the claimant back to the same position as it would have been had the collision not occurred. In relation to salvage, Sections 386 to 404 of the MSA provide for the remuneration of a salvor and protection of a salvor’s claim.

Other Nigerian laws on collision and salvage include:

• the Merchant Shipping (Collision) Rules, 2010, modelled after the Convention on International Regulations for Preventing Collisions at Sea, 1972 (COLREGs);
• the Merchant Shipping (Wrecks and Salvage) Rules, 2010;
• the AJA;
• the Admiralty Jurisdiction Procedure Rules, 2023 (AJPR);
• the Cabotage Act; and
• the NIMASA Act.

The LLMC (and its 1996 Protocol) is applicable in Nigeria. Pursuant to Section 335(1)(f) of the MSA, parties who may limit their liability for maritime claims, under the MSA, are ship-owners (including the owners, charterers, managers of a ship), salvors and their insurers.

Section 352 of the MSA provides for claims to be subject to limitation of liability. These claims include:

• loss of life or personal injury or loss of or damage to property, occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;
• loss resulting from delay in the carriage by sea of cargo, passengers or their luggage;
• removal, destruction or rendering harmless of the cargo of the ship; and
• floating platforms constructed for the purpose of exploring or exploiting the natural resources of the seabed or the subsoil thereof.

The increased liability for maritime claims, as provided in the amendment to the 1996 Protocol, which entered into force on 8 June 2015, is inapplicable in Nigeria because Section 357 of the MSA expressly states the limits under the 1996 Protocol.

Although Nigeria ratified the Vienna Convention on the Law of Treaties (VCLT) in 1969, making it binding at the international level, it is not enforceable in Nigeria as it is yet to be made a law of the National Assembly as required by Section 12 of the Constitution.

However, this does not mean the VCLT is irrelevant. Most of its interpretive rules are widely accepted as codifications of customary international law, which automatically form part of Nigerian common law unless displaced by statute. On this basis, Nigerian courts applying Nigerian law have cited and relied on VCLT provisions as persuasive interpretive tools. In the case of Abacha v Fawehinmi (2000) 6 NWLR 228, the Supreme Court demonstrated judicial willingness to invoke the VCLT when clarifying the scope of Nigeria’s international obligations.

Thus, Nigerian courts interpreting the LLMC, which is part of Nigerian law, may use VCLT principles to ensure conformity between domestic implementation and the Convention’s international intent. This approach aligns conceptually with the UK Supreme Court’s reasoning in MSC Flaminia, where Articles 31 to 33 of the VCLT were applied to resolve ambiguity under the LLMC regarding charterer rights.

Nonetheless, the VCLT’s use in Nigeria remains persuasive rather than mandatory. Nigerian courts remain bound, first and foremost, by the text of the domesticated statutes and, where a conflict arises, Nigerian judges tend to prioritise the enacted legislation over external interpretive doctrines.

Where an eligible party anticipates that a claim is likely to be made against them by any other party under any maritime law, including the MSA, they may apply to the FHC to determine whether their liability(ies) may be limited under law and the extent of the liability.

The AJPR provides that a limitation of liability proceeding shall be commenced by filing an originating summons alongside an affidavit, copies of all the exhibits to be relied upon, and a written address at the registry of the FHC. Such an action is commenced as an admiralty action in personam against at least one of the (possible) claimants in a maritime claim (as a defendant), who must be served before the case may be set down for hearing or determination given in default of appearance.

After determination of the applicant’s entitlement to a limitation of its liability, the court may order (i) the constitution of a limitation fund for the payment of claims in respect of which the applicant is entitled to limit their liability, and (ii) advertisement of its determination to allow anyone with a maritime claim against the vessel or any other parties previously named to apply to set aside, vary the court’s determination or lodge its interest.

The order for the constitution of the limitation fund would also specify the method of calculating the fund, usually based on the vessel’s tonnage and the applicable limit prescribed in the MSA.

It is not required to provide a deposit in relation to a constituted limitation fund.

Nigeria has ratified the Maritime Labour Convention 2006 (MLC) but is yet to domesticate it as required by the Constitution. Notwithstanding, the NIMASA, by requesting evidence of compliance with the MLC financial security provisions before issuing certain operational permits to vessels, has invariably started to implement the provisions of the MLC.

Other international conventions on seafarers’ rights have been implemented, pursuant to Section 215 of the MSA. These include:

• rights with regard to their employment contracts, including wages, leave benefits and discharge from service; and
• rights regarding general welfare, health, and accommodation.

The International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978 has the force of law in Nigeria via the rule-making authority of the Minister (Section 434 of the MSA) by way of subsidiary legislation in the Merchant Shipping (Medical Examination of Seafarers) Regulations 2001 and the Merchant Shipping (Safe Manning, Hours of Watchkeeping) Regulations 2001. Regulations 3 and 4 of the Safe Manning, Hours of Watchkeeping Regulations place duties on masters of Nigerian ships to ensure that a seafarer on board a ship does not work more hours than is safe in relation to the safety of the ship and performance of the seafarer’s duties. Section 5 places the duty on both masters and seafarers, insofar as is reasonably practicable, to ensure that they are properly rested before commencing duty on a ship and that they obtain adequate rest during periods when off duty.

The ILO Convention, 1932 on Protection Against Accident of Workers Employed in Loading or Unloading Ships (Dockers Convention Revised 1932) and the Placing of Seamen Convention, 1920 are the other international conventions on seafarers’ rights that have been domesticated by the MSA.

The AJA also provides seafarers and masters with the right (as general maritime claims and maritime liens) to bring an action against a shipowner for unpaid wages. However, the Court of Appeal, per its 2020 decision in the MT SAM PURPOSE, states that pursuant to Section 254(c)(1) of the Constitution, the National Industrial Court is the appropriate court to deal with an action for unpaid crew wages. The matter is currently pending on appeal before the Supreme Court. 

The conventions regarding bills of lading which are enforceable in Nigeria are:

• the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading 1924 (the “Hague Rules”), domesticated via the Carriage of Goods by Sea Act, Cap C2, LFN 2004 (COGSA); and
• the United Nations Convention on the Carriage of Goods by Sea (the “Hamburg Rules”), domesticated via the United Nations Convention on Carriage of Goods by Sea (Ratification and Enforcement) Act 2005).

The Hague Rules and Hamburg Rules are applicable in Nigeria, as the National Assembly failed to repeal/denounce the Hague Rules, as required by Article 31 of the Hamburg Rules.

While Nigeria is not a party to the Hague-Visby Rules, it has ratified, but is yet to domesticate, the Rotterdam Rules; hence, it does not have force of law in Nigeria.

Generally, only a party to a contract contained in a bill of lading can sue on it, that is, the carrier, shipper (consignor), consignee or the endorsee on the bill of lading.

Unless endorsed as an endorsee, a notifying party is not a party to a contract contained in a bill of lading and lacks the locus standi to sue or institute an action on the bill of lading.

Notwithstanding, Nigerian law recognises some notable exceptions to these rules, including the Brandt v Liverpool doctrine, whereby the holder of the bill of lading can maintain an action at common law, where the court is able to infer or imply a contract on the bill of lading terms between the holder and the carrier, in circumstances where the holder:

• takes delivery of the goods;
• pays freight or demurrage; or
• presents the bill of lading.

Nigeria recognises the assignment of the right to sue, particularly in the context of insurance claims ‒ subrogation. In the context of a bill of lading, the right to sue for breach of contract or damages can be assigned to a third party, such as the holder of the bill or the insurer, provided that the subrogation is properly executed.

Pursuant to Article 3 Rule 6 of the Hague Rules, in a claim for liabilities against cargo damage, written notice of loss or damage to cargo must be made to the carrier at the port of discharge either before or at the time the person entitled to delivery of the goods takes custody of the items. The notice must be delivered within three days if the loss is not immediately evident, otherwise, this amounts to conclusive proof that the carrier delivered the items according to the bill of lading.

Pursuant to Article 5 of the Hamburg Rules, a ship-owner who is the contractual or actual carrier is liable for loss resulting from damage to the goods, if the occurrence that caused the loss, damage or delay took place while the goods were in its charge, unless it can be proven that the ship-owner, its servants and agents took all measures that could reasonably be required to avoid the occurrence and the consequent damage to the goods. In the case of damage caused by fire, the ship-owner who is the contractual or actual carrier will be liable if it is proven that the fire arose from the fault or neglect of the ship-owner, its servants or its agents.

The provisions of the Hamburg Rules are not applicable to charterparties. However, where a bill of lading is issued pursuant to a charterparty, the provisions of the Hamburg Rules shall apply to that bill of lading if it governs the relations between the carrier and the holder of the bill of lading who is not the charterer.

Pursuant to Article 6 of the Hamburg Rules, the liability of the carrier for loss resulting from damage to goods is limited to an amount equivalent to 835 units of account per package or other shipping unit or 2.5 units of account per kilogram of gross weight of the goods lost or damaged, whichever is the higher. According to Article 26 of the Hamburg Rules, the unit of account is the Special Drawing Right, as defined by the International Monetary Fund converted into the Nigerian naira at the date of the judgment, unless otherwise agreed by the parties.

However, Section 354 of the MSA states that the limitation of liability will not apply where it is proved that the loss or damage resulted from the ship-owner’s, or its servants’ or agents’, personal act or omission or the act or omission of their servants or agents acting within the scope of their employment, committed with the intent to cause that loss or damage or recklessly and with knowledge that such a loss would probably result.

There will be no difference in the liability of the ship-owner for cargo damage where it is the actual carrier or the contractual carrier. Article 2 of the Hamburg Rules states that the basis of liability and limitation of liability apply to both the contractual carrier and the actual carrier. Article 10 of the Hamburg Rules further states that, where the contractual carrier engages an actual carrier, the contractual carrier remains liable.

The carrier may maintain a claim against the shipper for misdeclaration of dangerous goods. Section 322(2) of the MSA requires a shipper to mark dangerous goods distinctly, with details of the nature of the goods on the outside of the outermost package containing the goods, and the shipper must first give written notice of the nature of the goods, and of the name and address of the sender, to the master or owner of the ship.

Additionally, Article 13 of the Hamburg Rules provides that the shipper must inform the carrier of the dangerous character of the goods and, if necessary, of the precautions to be taken and, where the shipper fails to do so, the shipper is liable to the carrier and any actual carrier for the loss resulting from the shipment of those goods; the goods may at any time be unloaded and destroyed without payment of compensation. Article 17 of the Hamburg Rules also provides that a shipper is liable to indemnify the carrier against the loss resulting from inaccuracies stated in the bill of lading.

Article IV (6) of the COGSA also states that the shipper shall be liable to the carrier for any damages and expenses directly or indirectly arising out of the shipment of inflammable, explosive or dangerous goods, where the shipper fails to notify the carrier of the nature of the goods.

Noting that the Hamburg Rules and Hague Rules are in force in Nigeria, the limitation periods indicated in each of these conventions are applicable in Nigeria.

Under the Hague Rules, the time bar for the institution of claims for loss of or damage to goods is one year from the date on which the goods were delivered or, in the case of lost goods, from the date the goods should have been delivered, provided that a written notice of loss or damage was given to the carrier or their agent at the port of discharge before or at the time of the delivery of the goods, or, in the case of lost goods, within three days.

Under the Hamburg Rules, the time bar is two years from the date the goods were delivered or from the last day on which the goods should have been delivered. Notwithstanding, the person against whom the claim is made can extend the limitation period by making a declaration in writing.

There is no international convention in force in relation to the arrest of vessels in Nigeria.

The AJA, MSA and AJPR are the domestic legislation covering ship arrests in Nigeria.

Section 5(3) of the AJA defines maritime liens as a lien for:

• salvage;
• damage done by a ship;
• the wages of the master or a member of the crew of a ship; or
• the master’s disbursements.

In addition to these definitions, Section 67 of the MSA (as inspired by the Maritime Liens and Mortgages Convention, 1993, to which Nigeria acceded but which it has yet to domesticate in accordance with the Constitution) expanded the definition of maritime liens to include the following claims:

• loss of life or personal injury occurring, whether on land or water, in direct connection with the operation of the relevant ship;
• salvage, wreck removal and contribution in general average; or
• ports, canal and other waterways, dues and pilotage dues.

Thus, Nigeria recognises maritime lien for indemnities for injuries to crew. Also, the AJA distinguishes between maritime claims (ie, proprietary and general maritime claims, as explained at 1.1 Domestic Laws Establishing the Authorities of the Maritime and Shipping Courts) and maritime liens. Proprietary maritime claims and maritime liens are vested with in rem rights against a vessel.

Notwithstanding, a vessel may be arrested in relation to a general maritime claim where the claim arises in connection with a ship and the person who would be liable on the claim in an action in personam (the “Relevant Person”) is, at the time the action is filed: (i) the owner, in respect of all the shares in the offending ship, or its bareboat charterer; or (ii) the owner, in respect of all the shares, in any other ship (sister-ship).

In relation to a proprietary maritime claim/maritime lien, it is not required for the owner or demise charterer to be liable in personam before a vessel can be arrested.

For a general maritime claim, the Relevant Person (ie, the owner/demise charterer) needs to be liable in personam before a vessel or its sister vessel can be arrested.

Pursuant to Section 2(3)(k) of the AJA, a claim for unpaid bunkers amounts to a general maritime claim for goods, materials or services supplied to a ship for its operation and maintenance. As such, the supplied vessel may be arrested if the Relevant Person wholly owns all the shares in the supplied vessel, or is the demised charterer of the supplied vessel, at the time the arrest is filed. Also, any other vessel, which is wholly owned by the Relevant Person (in respect of all the shares) at the time the arrest if filed, may be arrested in relation to the claim for unpaid bunkers supplied to another vessel.

Where the Relevant Person (who ordered the unpaid bunkers) is the time-charterer, the bunker supplier would be unable to arrest the supplied vessel pursuant to the AJA.

Notwithstanding, it is possible to arrest a vessel for unpaid bunker claims where (i) the governing law for the bunkers supply contract creates an in rem right against the supplied vessel (in the form of a maritime lien), or (ii) the terms and conditions of the bunkers supply contract create an in rem right against the supplied vessel.

Neither case law nor any legislation makes any distinction between a contractual supplier or the actual supplier of unpaid bunkers for an in rem right to arrest a vessel.

Further to the AJPR and the Federal High Court (Civil Procedure) Rules 2019, an application for the arrest of a vessel is brought via an ex parte application (if the vessel is within Nigerian territorial waters or is expected to arrive there within three days) disclosing a strong prima facie case for the arrest order. This application must be supported by:

• an affidavit and an affidavit of urgency deposed to by the applicant, its counsel or its agent;
• an undertaking to indemnify the ship against wrongful arrest; and
• an undertaking to indemnify the Admiralty Marshal in respect of any expenses incurred in effecting the arrest.

Such applications can be filed electronically. The applicant is also required to pay, fortnightly, the Admiralty Marshal’s minimum cost of NGN100,000 for maintaining the arrested vessel.

Original copies of the supporting documents are required. However, where an original document has been lost or is unavailable, a notarised copy of the document will suffice. If the document provided is a public document within the meaning of Section 102 of the Evidence Act (Amendment) Act 2023, a certificate written at the foot of that copy, by the relevant public officer, declaring that it is a certified true copy of the document, is required in certification of that document.

Documents prepared in a language other than English language are required to be translated into English language.

The FHC does not require a security deposit from the arresting party. However, Order 13, AJPR provides that the court may order security for costs, on the application of the arrested party, where the sum claimed is more than NGN10 million or its foreign currency equivalent, or where the arresting party has no assets in Nigeria. The security for cost may be in the form of a cash deposit into court, a letter of undertaking (LOU) from a member of the International Group of Protection and Indemnity Clubs (IGP&I), or a guarantee from a Nigerian bank or insurance company.

If the ordered security for costs is not provided within the set timeline, the vessel will be released from arrest.

Claims for bunkers and freight are maritime claims under the AJA. It is therefore possible to arrest bunkers and freights in Nigeria. See 1.1 Domestic Laws Establishing the Authorities of the Maritime and Shipping Courts and 5.4 Unpaid Bunkers.

Section 5(4) of the AJA permits sister-ship arrests, provided that the Relevant Person is, at the time the action is filed, the owner, in respect of all the shares of the sister-ship.

Apart from ship arrests, another possibility of obtaining attachment orders is through an application for a Mareva injunction, which is an interim attachment of assets equivalent to the value of the claimant’s claim. Nigerian courts will only grant the injunction where the claimant has a justifiable cause of action against the defendant and there is a real risk of the defendant removing their assets from jurisdiction.

Pursuant to the AJPR, an arrested vessel may be released upon an application by a party under the following circumstances:

• an amount equal to the amount claimed or the value of the ship has been paid into court;
• the defendant provides security in an amount equal to the amount claimed in the suit, or the value of the vessel, whichever is the lesser;
• the arresting party consents to the release in writing;
• the suit is discontinued/dismissed and there is no caveat against the release of the vessel; and
• the cargo on board the ship is under arrest, but the ship is not.

An LOU from a member of the IGP&I would be acceptable for the release of an arrested vessel. A bank guarantee from a foreign bank would not be accepted by the FHC, as it is not one of the forms of security prescribed by the AJPR. Notwithstanding, the FHC may accept a foreign bank guarantee for the release of an arrested vessel where the arresting party is willing to accept such a guarantee.

Where a vessel has been under arrest, and her owners have failed to provide security for her release within 60 days from the date of arrest, the court may, on the application of the arrestor or any interested party, order that the vessel be valued and sold by the Admiralty Marshal and the proceeds of the sale placed in an interest-yielding fixed-deposit account in the name of the Admiralty Marshal, pending further orders from the court.

Notwithstanding, the court may also, (i) on the application of the arrestor or any interested party, or (ii) on its own volition, but with notice to the relevant parties and subject to a valuation, order the sale of the arrested vessel where it is deteriorating in value.

Whilst the Admiralty Marshal has custody from the arrest of the vessel, the arrestor(s) are liable for the cost of maintaining the vessel until she is released or sold by the Admiralty Marshal. An application by the arrestor or any interested party for an order for the valuation and sale of the arrested vessel constitutes an undertaking by that party to pay, on demand to the Admiralty Marshal, the cost of complying with the order. The Admiralty Marshall is also entitled to deduct 2% from the proceeds of the sale of the ship to cover their costs for the valuation and sale of the vessel.

Unless ordered by the court, the judicial sale of an arrested vessel will be undertaken by a public auction conducted 21 days after the Admiralty Marshal places an advertisement to that effect in two national daily newspapers. Where the parties agree to the sale of the arrested vessel by private treaty, this may be ordered by the court.

After the sale, the Admiralty Marshal will file a return of sale, as well as an account of sale and the vouchers of sale. The Admiralty Marshal will also pay the proceeds of sale to the court.

The priority of claims against arrested ships or property are laid down in the AJPR as follows:

• statutory/court charges and expenses, such as the Admiralty Marshall’s expenses in connection with the ship or property;
• salvage, wreck removal and contribution in general average;
• wages and other sums due to the master, officer, 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;
• loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship;
• ports, canal and other waterways, dues and pilotage dues;
• possessory liens (repairer’s lien – where the ship is still in possession);
• mortgages – priority of mortgages is determined by the date on which each mortgage is recorded in the register and registered mortgages have priority over unregistered mortgages;
• in rem action for possession or ownership of a ship;
• in rem action in relation to a dispute between co-owners regarding possession or use of a ship;
• in rem action in relation to loss or damage to cargo carried on a ship;
• lien in rem action in relation to damage received by a ship;
• in rem action in relation to a dispute arising out of contracts for carriage of goods or use of a ship; and
• in personam action.

Pursuant to Section 67 of the MSA, maritime liens have priority over mortgages and any other claims, in the following order:

• claims for salvage, wreck removal and contribution in general average;
• 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; and
• claims for ports, canal and other waterways, dues and pilotage dues.

Also, pursuant to Section 56 of the MSA, the priority of mortgages is determined by the date on which each mortgage is recorded in the register and registered mortgages have priority over unregistered mortgages.

Nigeria has a scheme of insolvency and restructuring laws, some of which are provided in the Companies and Allied Matters Act 2020 (CAMA) and the Bankruptcy Act, Cap. B2 LFN, 2004 (the “Bankruptcy Act”). These schemes include administration and companies’ voluntary arrangements, which are analogous to Chapter 11 bankruptcy proceedings.

The AJA, which governs the arrest and judicial sale of vessels, does not include these bankruptcy proceedings as grounds for the arrest and judicial sale of a vessel. However, the CAMA and the Bankruptcy Act grant administrators, liquidators, and others wide powers with respect to the sale of a company’s assets, with or without an order of court.

Section 13 of the AJA states that the arresting party will be liable for wrongful arrest where:

• the arrest was obtained unreasonably and without good cause; or
• the arresting party, unreasonably and without good cause, demands excessive security in the proceeding, or fails to give a consent required for the release of a ship or other property.

The AJPR also provides reparation for needless arrest where it is procured in bad faith, through gross negligence, or unlawfully. Following the dismissal of the suit, on the aforementioned basis, the AJPR states that the arrestor would be liable for damages for any loss, injury or expenses that the defendant may have sustained by reason of the arrest, upon the application of the defendant made at any time before the expiry of three months from the termination of the suit.

The following conventions are applicable to the resolution of maritime passenger claims:

• the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea 1974, and its Protocol of 1990; and
• the LLMC.

The AJA and the MSA are the domestic legislation applicable to the resolution of maritime passenger claims in Nigeria.

Actions relating to passenger claims must be commenced within two years after the loss of life or injury occurred.

The MSA also imposes a limit of liability on ship-owners in passenger claims arising on any distinct occasion for loss of life or personal injury.

As stated in 3.3 Convention on Limitation of Liability for Maritime Claims, the increased liability for passenger maritime claims, as provided in Protocol Amendment 2015, is inapplicable in Nigeria.

Generally, Nigerian courts usually recognise law and jurisdiction clauses stated in contracts, including bills of lading. Notably, where the competence of an action is challenged on the ground that a bill of lading states a foreign jurisdiction and not a Nigerian court, the court is not bound to enforce those clauses and can exercise a discretion in determining whether to make a stay of proceedings to enable the parties to pursue dispute resolution in the foreign jurisdiction.

Additionally, Section 20 of the AJA provides that any jurisdictional clause in an agreement which seeks to oust the jurisdiction of the court will be void where the agreement relates to any admiralty matter under the AJA (only the jurisdictional aspects of the clause are affected, not the entire agreement).

Nigerian courts recognise and enforce law and arbitration clauses in charterparties and bills of lading. Specifically, Section 10 of the AJA empowers the FHC to recognise and enforce arbitration clauses in admiralty agreements.

Nigeria is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958, which has the force of law in Nigeria pursuant to the Arbitration and Mediation Act, 2023 (AMA). The AMA is the principal domestic law on arbitration in Nigeria.

Nigerian courts can order the arrest of vessels or other attachments where the relevant claim is subject to a foreign arbitration and/or jurisdiction, due to a foreign jurisdiction or arbitration clause.

Notably, by virtue of Order 7 Rule 8 of the AJPR, where an application is for a warrant of arrest of a ship or other property in respect of a claim commenced in a court outside Nigeria or commenced by way of arbitration proceedings (within or) outside Nigeria, such an application can be made without commencing an action before the court for the substantive claim. Thus, the FHC has the jurisdiction to entertain an action solely based on obtaining security via ship arrest in claims before a foreign court or arbitration (foreign and local) proceedings.

The Maritime Arbitrators Association of Nigeria (MAAN) is the primary domestic arbitration institute that specialises in maritime claims. Other arbitration bodies that deal with general commercial arbitration, including maritime, include the Chartered Institute of Arbitrators UK (Nigeria branch), the Lagos Multi-Door Courthouse, and the Lagos Court of Arbitration.

In relation to a foreign jurisdiction clause, the defendant may file an anti-suit injunction in the relevant foreign court. This approach is aimed at ensuring that the party in breach terminates the Nigerian proceedings in favour of proceedings in the foreign court, as prescribed by the foreign jurisdiction clause.

The defendant may apply for a stay of the proceedings before the Nigerian FHC in accordance with the relevant foreign arbitration clause that has been breached and pursuant to the provisions of the AJA and the AMA. If the FHC sees merit in the defendant’s application, it will grant the stay. Where a vessel is under arrest, the FHC may order that the proceedings be stayed on condition that the arrest and detention of the vessel shall stay or be satisfactory security for the release of the vessel for the satisfaction of any award that may be made in the foreign arbitration.

Nigerian law does not have a special tax exemption or tax reliefs applicable to the income earned by vessels. The recent tax demands by the Federal Inland Revenue Service (FIRS) on international shipping companies in Nigerian territorial waters are more about enforcing compliance with existing tax laws rather than introducing new tax reliefs or exemptions. These actions are aligned with the amendments made in the Finance Act, 2023, which require foreign companies, including shipping companies, to provide evidence of income tax filings and Tax Clearance Certificates to operate in Nigeria.

For the non-performance of a shipping contract to amount to force majeure, the operative maritime contract must expressly/impliedly provide that the cause of any such non-performance would constitute force majeure.

The party alleging force majeure must show that:

• there has been a force majeure event that falls within the meaning of the clause in the charterparty;
• the non-performance is traceable to the force majeure event; and
• notice requirement in the charterparty, if any, has been satisfied.

Furthermore, for non-performance to amount to frustration, the cause of the non-performance must have been a supervening event (such as statutory impossibility, an outbreak of war or government acquisition of the subject matter of the contract) destroying a fundamental assumption on which the shipping contract is predicated on.

Where the supervening event is one which, by the terms of the contract, the parties contemplated the possibility of such an intervening circumstance arising, or one of the parties had deliberately brought the supervening event, or the intervening circumstance is one not so fundamental as to destroy the basis of the shipping contract, the non-performance arising from such supervening event cannot amount to frustration of the shipping contract.

By Section 335(1)(a) of the MSA, provisions of the International Convention for the Prevention of Pollution from Ships 1973/1978, of which the IMO 2020 is a product, apply in Nigeria. Furthermore, the NIMASA and the Nigerian Ports Authority (NPA) have made commitments towards ensuring the implementation and enforcement of the IMO 2020.

NIMASA is responsible for the enforcement of the sulphur-content limitation and the limit is the same as the global limit and IMO Standard, 0.5%.

Although there have been no large-scale enforcement actions, NIMASA engages with the Nigerian Upstream Petroleum Regulatory Commission to ensure that marine fuel to be refined or imported meets the IMO standard.

There have been no known proceedings/sanctions that have taken place because of a violation of the sulphur limitation.

Nigeria has not incorporated any of the international trade sanctions. The main legislation governing sanctions and export controls is the Nigerian Customs Service Act 2023 (NCA). The Nigerian Customs Service has legal authority to act on behalf of Nigeria in all customs-related matters. While there are no specific entities that have been sanctioned, the Nigerian Customs Service can impose sanctions such as the seizure and forfeiture of goods. In cases of serious violations, civil or criminal liability may arise, and appropriate prosecution proceedings may be instituted in the Nigerian courts.

There are no trade sanctions-related impacts of the Russia–Ukraine war on Nigeria, save for the shortage in the supply of certain agricultural products and the consequent increase in the prices of such commodities in Nigeria.

The conflict in Ukraine is poised to impact Nigeria, which relies on Ukraine for key imports such as iron, steel and various dairy products. The war has contributed to heightened global crude oil prices, which have, in turn, led to an upsurge in international freight charges. There are no court decisions on matters relating to non-performance of obligations due to the war in Ukraine.

The various international conflicts have impacted the legal and economic landscapes in Nigeria. The Russia–Ukraine War (the “War”), for example, has negatively impacted the execution of the 2010 Nigeria–Russia Memorandum of Understanding on co-operation in the oil and gas supply chain. Being an importation-dependent economy, the War has also negatively impaired Nigeria’s importation of food items, thereby leading to a surge in food prices.

Cabotage Operations

The Cabotage Act provides that only vessels which are wholly owned, manned by Nigerians, and built and registered in Nigeria can engage in the cabotage trade.

The Cabotage Act further provides that vessels shall not be registered or used in cabotage, unless:

• the vessel is wholly and beneficially owned by Nigerian citizens or by a company wholly and beneficially owned by Nigerian citizens;
• a vessel or company is deemed to be wholly and beneficially owned by Nigerian citizens where all the shares in the vessel or in the company are held by Nigerian citizens, free from trusts or other obligations (fiduciary or otherwise) in favour of non-Nigerians;
• the vessel is under a bareboat charter to Nigerian citizens or companies and is under the full control and management of Nigerian citizens or a company wholly and beneficially owned by Nigerians;
• the vessel is owned by a company registered in Nigeria and the percentage of shares held in the company by Nigerian citizens is not less than 60%; and
• the vessel is exclusively manned by officers and crew of Nigerian citizenship.

However, the Minister may grant waivers on the requirement for a vessel to be wholly owned and wholly manned by Nigerian citizens and to be built in Nigeria, if the Minister is satisfied that there is no wholly owned Nigerian vessel suitable to provide the services or perform the activities required, no qualified Nigerian officer or crew for the position specified or no Nigerian ship-building yard with the capacity to construct the type and size of vessel specified.

The NSRO is also responsible for maintaining the cabotage register for vessels eligible to undertake coastal trade in Nigeria.

The Cabotage Act established a Cabotage Vessel Finance Fund (CVFF) and also stipulates that a surcharge of 2% of the contract sum performed by any vessel engaged in coastal trade shall be paid into the CVFF.

Enforcement of Foreign Judgments

A foreign judgment is required to be registered before it can be enforced in Nigeria. There are two applicable statutory regimes in this regard: the Reciprocal Enforcement of Judgments Ordinance Cap 175 of the Laws of the Federation of Nigeria and Lagos, 1958 (the Ordinance), and the Foreign Judgment (Reciprocal Enforcement) Act, 2004 (FJA). A party may also bring an action under common law.

The FJA provides for the enforcement in Nigeria of final judgments of foreign superior courts that accord reciprocal treatment to judgments of Nigerian courts.

The Ordinance applies to judgments of certain commonwealth countries, including the United Kingdom. Under the Ordinance, for a foreign judgment to be enforceable in Nigeria, an applicant must file a petition ex parte or on notice to a judge for leave to register the foreign judgment in Nigeria. The petition and the affidavit in support shall be accompanied by a written address, addressing all the legal issues involved in the matter.

If the court finds merit in the petition, it shall order that the foreign judgment be registered as a judgment of the Nigerian court, and the order will usually specify a time limit within which the judgment debtor can apply to set aside the order – usually 14 days if the judgment debtor is within the territory of the registering court, or longer if otherwise. The Ordinance has a six-year limitation period.

Under common law, a party seeking to enforce a foreign judgment in a maritime claim must institute fresh proceedings in the FHC, with the foreign judgment as the basis for the claim. The judgment creditor may apply for the case to be placed on the undefended list, an expedited procedure for cases where there is no reasonable defence to the claim.