Standard Club has noted that its members were regularly exploring new opportunities in diverse territories and thus frequently needed to ask how the law in a particular jurisdiction might impact the enforceability of key contractual provisions.
Standard Club has therefore produced a list of key offshore jurisdictions and how the various relevant laws apply.
The study specifically looks at:
- the right to limit liability (specifically in respect of wreck removal)
- the application and geographical reach of the CLC Convention, Wreck Removal Convention, Maritime Labour Convention or any related domestic legislation
- the enforceability of knock-for-knock provisions in a contract and whether there are any gross negligence or wilful misconduct exceptions to this.
The jurisdictions covered are:
- Angola
- Australia
- Brazil
- India
- Indonesia
- Malaysia
- Mexico
- Nigeria
- Norway
- Qatar
- Saudi Arabia
- Singapore
- Thailand
- UK
- USA
The full guide is available at:
http://www.standard-club.com/media/2767858/a-guide-to-key-offshore-jurisdictions.pdf
IMN is providing a daily country-by country summary. On Monday, Norway
8) Nigeria
Q: Is Nigeria signatory to an international convention relating to limitation of liability for maritime claims? If not, can shipowners limit their liability under local law?
A: Yes, Nigeria is signatory to the Convention on Limitation of Liability for Maritime Claims 1976 (LLMC 1976), and has ratified and domesticated it into national law by virtue of the provisions of Section 335(1) (f) of the Merchant Shipping Act 2007, which expressly provides that the provisions of the Convention shall apply in Nigeria.
Q: What is the geographical application of the international convention or the local law under which shipowners can limit their liability?
A: There is nowhere in Nigeria’s laws where the extent of applicability of the LLMC 1976 is expressly stated; however, the provisions of both the Territorial Waters Act, 1967 and the Exclusive Economic Zone Act of Nigeria, 1978 (EEZ) expressly provide for the extent of the geographical and sovereign powers of Nigeria. The Territorial Waters Act gives jurisdiction to the Federal Government of Nigeria over any part of the territorial waters of Nigeria. Under the Territorial Waters Act, the territorial waters of Nigeria shall include every part of the open sea within 12nm of the low water mark of the coast of Nigeria. The EEZ on the other hand provides that Nigeria can exercise certain sovereign rights, especially in relation to the conservation or exploitation of the natural resources of the seabed, its subsoil and super adjacent water, and the right to regulate by law the establishment of artificial structures and installations, and undertaking of marine scientific research. The EEZ of Nigeria extends up to 200 nautical miles seawards from the coast of Nigeria. The combined reading of these two statutes by implication presupposes that the extent of application of any law or convention to which Nigeria is a signatory will be limited to the extent of applicability of the Territorial Waters Act and the EEZ.
Q: Are there any exclusions or exceptions in respect of offshore vessel types?
A: No. There are no exclusions or exceptions in respect of offshore vessel types. However, most of Nigeria’s laws include offshore vessel types as vessels/ships in their definition section; therefore, it is safe to conclude that the laws as applicable to ships/vessels will be applicable to offshore vessel types.
Q: Is it possible to limit for wreck removal in Nigeria?
A: Yes, it is possible to limit for wreck removal in Nigeria. The provisions of Section 352 (1) (g) of the Merchant Shipping Act, 2007 provide that claims in respect of raising, removal, destruction or the rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, shall be subject to limitation of liability.
Q: Is Nigeria signatory to the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunkers Convention)?
A: Yes, Nigeria is signatory to the Bunkers Convention and has ratified it. However, it is yet to domesticate it into national law in accordance with the provisions of Section 12 of the Constitution of the Federal Republic of Nigeria and therefore this Convention may not have the force of law.
Q: Is Nigeria signatory to the International Convention on Civil Liability for Oil Pollution Damage (CLC)?
A: Yes, Nigeria is signatory to the CLC and has ratified and domesticated it into law by virtue of the provisions of Section 335 (1) (e) of the Merchant Shipping Act, 2007 and the Merchant Shipping (Civil Liability for Oil Pollution Damage and Compensation) Regulations, 2010.
Q: What is the geographical application of the CLC Convention in respect of Nigeria?
A: As per the LLMC 1976, Nigeria’s relevant laws are silent on the extent of applicability of the CLC. However the provisions of both the Territorial Waters Act, 1967 and the Exclusive Economic Zone Act of Nigeria, 1978 (EEZ) expressly provide for the extent of the geographical and sovereign powers of Nigeria. The combined reading of these two statutes presupposes that the extent of application of any convention in which Nigeria is a signatory will be limited to the extent of the Territorial Waters Act, 1967 and the EEZ.
Q: Are there any exclusions or exceptions in respect of offshore vessel types?
A: No. There are no exclusions or exceptions in respect of offshore vessel types. However, most of Nigeria’s laws include offshore vessel types as vessels/ships in their definition section therefore, it is safe to conclude that the laws as applicable to ships/vessels will be applicable to offshore vessel types.
Q: Is Nigeria signatory to the Nairobi International Convention on the Removal of Wrecks (WRC)?
A: Yes, Nigeria is signatory to the WRC and has ratified it. However, it is yet to domesticate it into national law and therefore this Convention may not have the force of law.
Q: Is Nigeria signatory to the Maritime Labour Convention (MLC)?
A: Although Nigeria is signatory to the MLC, it is yet to domesticate it into national law.
Q: Is ‘gross negligence’ or ‘wilful misconduct’ recognized as a legal concept under Nigerian law?
A: Yes, ‘gross negligence’ and ‘wilful misconduct’ are recognized as legal concepts under Nigerian law. Both terms, although related, have distinct features attributable to them. The main difference is that the resultant damage is envisaged in one while it is not in the other. In wilful misconduct, the defendant, before embarking on the action resulting in the damages is aware of the probable result of his actions. In gross negligence, however, the defendant would not have envisaged the damages that would flow from his actions but would merely have failed to exercise due diligence and care expected of him. In Nigeria, a party may, in some cases, be subject to imprisonment for up to two years where they are found to be liable due to misconduct.
Q: Is the knock for knock liability regime a recognized concept under Nigerian law?
A: We are unaware of any cases or decisions addressing the concept of knock for knock. However, Nigerian law would usually uphold a clause containing liability provisions in a contract voluntarily executed, because Nigerian law recognizes and respects the sanctity of contracts. Where parties have reduced the terms and conditions of service into an agreement, the conditions must be observed. A party cannot ordinarily withdraw from a contract or agreement just because they later found that the terms of the contract or agreement are not favourable to them.
Q: If knock for knock is a recognized liability regime under Nigerian law, will it be upheld in the event of ‘gross negligence’ or ‘wilful misconduct’?
A: As noted above, the knock for knock regime has not come up in any reported decisions under Nigerian law and, to the best of our knowledge, there are no decided cases in relation to the concept. In cases where there is either a lack of judicial authorities in Nigeria, recourse can be made to the Common Law and, in particular, decisions of the courts of England, because Nigerian laws largely follow English law. However, decisions of the English courts are merely persuasive and not binding on the Nigerian courts.
Q: Will industry standard contracts such as BIMCO’s TOWCON, TOWHIRE, SUPPLYTIME, WRECKHIRE, WRECKSTAGE, WRECKFIXED and HEAVYCON be upheld under Nigerian law?
A: Yes.
For further information, contact
Tom Williams
Underwriter, Offshore
+44 20 3320 8965
Femi Atoyebi
Principal Partner, Femi Atoyebi & Co.
+234 1 461 4002
Rotimi Oduba
Senior Associate, Femi Atoyebi & Co
+234 1 461 4002