 February
2004 - Volume
1, Number 1 |
Nigeria’s
Port Concession Programme: Government Extends Deadline to Submit
Expressions of Interest
Magnartis Finance and Investments Limited,
consultant to the Federal Government of Nigeria on the ports
concession programme, announced a shift in the deadline for
submissions of expression of interest by prospective investors.
The new deadline expires on February 20, 2004.
Already, there are indications that 10
multinational shipping lines and shipping agencies have indicated
their interest in acquiring concessions in terminals in Lagos
and Port-Harcourt ports’ terminals. The companies are
RORO Ocean Shipping, P&O Nedlloyd, Maersk Line, Niger Shipping
Limited, Comet Shipping, Intels Nigeria Limited, Alraine Nigeria
Limited, Brawal Shipping, WASA Delmas and Panalpina Nigeria
Limited.
Nigeria’s ports concession programme
implements the “Ports Reform and Modernisation Strategy”
articulated in the “Invitation to Pre-qualify” recently
published by the Federal Government of Nigeria through the National
Council of Privatization (NCPC) and the Bureau of Public enterprises
(BPE).
The reform strategy entails a new institutional
framework, the introduction of the “landlord ports”
concept, the decentralisation and unbundling of the Nigerian
Ports Authority (NPA), separation of responsibilities between
the major actors in the system, restructuring of NPA and a new
legal and regulatory framework.
With the introduction of the “landlord
ports” concept, the roles and tasks of the public and
the private sectors will be clearly separated. The Government
will, through the Nigerian Ports Authority (NPA) continue to
own the ports and port infrastructure while private investors
will participate in the management of port operations. This
will be achieved through the granting of concessions over ports,
terminals and berths for a defined timeframe.
The ports for which concession will be
granted include Lagos Apapa, Tin Can Island, Lagos Container
Terminal, Lagos RORO Terminal, Port-Harcourt, Onne Federal Lighter
Terminal (FLT), Federal Ocean Terminal, Warri, Sapele, Koko
and Calabar. These ports constitute the hub of international
trade in the West-African sub-region and some landlocked countries
of Sub-Saharan Africa.
The concession will take the form of
an operating lease whereby the Concessionaire will lease the
designated terminal areas from NPA for 15-30 years and will
have the right to provide the terminal services to the carriers,
importers and exporters. The lease will include all existing
NPA equipment presently assigned to the terminal and the Concessionaire
will be free to select from this equipment the assets required
for continued operation to return surplus equipments to NPA
for disposal.
In order to be pre-qualified for the
bidding process, interested companies or consortia will be required
to demonstrate:
- The managerial and financial capability
to operate terminals of the appropriate size and complexity;
- A good reputation and proven track
record for efficient terminal operations;
- The Financial resources to develop
the market for terminal services in the designated market
area, and withstand the financial consequences of unexpected
changes in the market;
- No conflict of interest with other
activities in which it, or affiliated, organisations are involved;
- No undeclared financial or other relationships
with any member of the Bureau of Public Enterprises, Nigerian
Ports Authority or the Federal Government of Nigeria, or with
any consultant employed by them on this assignment who would
be in a position to influence the outcome of the bidding process.
The concessions will be awarded by competitive
tender to the pre-qualified bidder that offers the Government
the highest value within the bidding conditions for each transaction.
Details of the bid evaluation criteria and all other relevant
details will be provided in the bidding documents.
If successfully implemented, it is expected
that the ports concession programme will improve the efficiency
of Nigerian ports, reduce costs and enhance their competitiveness.
At present, Lagos stevedoring costs average US$200 per 20ft
container by comparison to the Francophone ports of Dakar, Abidjan
and Douala which charge between US$ 60-75. A comparison of combined
port and stevedoring tariff plus operating costs for a Lagos
call against an aggregate of UK’s Thamesport and Teesport
indicates a difference of more than US$450/TEU. This amounts
to more than US$80million per annum (Steve Cameron, Portstrategy
June 2003, page 23).
Already, Nigeria has experienced a successful
example of privatisation. The Onne River Port terminal near
Port Harcourt is now managed by a private partnership between
Integrated Logistics Company (Intels) and Maersk Sealand.
Top
Conference
Report: Nigeria Prepares to Implement the ISPS Code
July 1 2004 is the date by which contracting
members of SOLAS 1974 (including Nigeria) must implement measures
required by the International Ship and Port Facility Security
(ISPS) Code. On Thursday the 5th and Friday the 6th of February
2004, the Nigeria Shippers Council convened a two-day seminar
with the theme: “Maritime Security of the Supply Chain”
at the Eko le Meridien Hotel, Victoria Island, Lagos. Mrs. Grace
Obizor Director-General of the Nigeria Shippers Council told
participants that the objective of the seminar was to stimulate
discourse among government agencies, shippers, ship owners and
operators, manufacturers and other relevant links in the supply
chain, to examine the role of the World Custom Organisation
in the new security dispensation and to offer insights into
the new modes of container security system that will apply from
July 2004.
At the seminar, Nigeria’s Minister of Transport recalled
that as part of the government’s commitment, it had set
up a special Ministerial Committee on the Implementation of
the ISPS Code, whose report was submitted in August 2003. He
revealed that Nigeria is not only determined to implement the
mandatory aspects of the ISPS Code by July 1, 2004, but also
to comply with the modalities in the recommendatory Part B of
the code.
Mr. Juvenal Shiundu, Head of the African
(Anglophone) Section - Technical Cooperation Division of the
International Maritime Organization (IMO) informed participants
that in preparation for the implementation of the ISPS Code
the IMO has issued a number of circulars to clarify issues arising
from the code.
He recalled that a regional workshop
for countries covered by the Port Management Association for
West and Central Africa (PMAWCA) was held in Calabar in March/April
2003 with seventy-seven participants from eighteen African countries
in attendance. At that seminar a resolution was adopted requesting
PMAWCA Member States to put all measures in place to implement
the ISPS Code by the mandatory date of 1st July, 2004.
Some of the papers delivered at the seminar
include: “Maritime Security-Challenges in the Supply Chain,
Management and Design” presented by Mr. Lucky Amiwero,
the National President of the Managing Directors of Licensed
Custom Agents and “Overview of the International Ship
and Port Facility Security (ISPS) Code and the Amendments to
SOLAS 1974 Convention” presented by Mr. Shiundu.
International organizations, maritime
administrators, ship owners, the Nigerian Customs Service, the
academia, law and insurance, security training consultants,
maritime technology companies and shippers were represented
at the Seminar.
Top
Implementation
of Nigeria’s Cabotage Act starts May 1, 2004
On May 1, 2004 Nigeria will begin to
enforce the Coastal and Inland Shipping (Cabotage) Act 2003.
The Cabotage Act reserves all inland and coastal marine transport
activity (including towage) exclusively for vessels that are
built and registered in Nigeria and that are wholly owned and
manned by Nigerian citizens or by companies in which Nigerians
have controlling interests.
The Cabotage Act aims to promote the
development of Nigerian tonnage by reserving the coastal and
inland marine transport market for Nigerian citizens or companies.
It also establishes a Cabotage Vessel Financing Fund (CVFF)
to promote the growth of Nigerian tonnage. The CVFF will be
funded from a 2% surcharge on the value of domestic marine transport
contracts performed after April 30 2004, such sums as the National
Assembly may approve from time to time and all other funds generated
through the operation of the Act, such as licensing fees.
Recognizing that the capacity for full
implementation does not presently exist, the Act makes provisions
for foreign vessels that wish to participate in inland and coastal
marine transport activity in Nigeria to be licensed and to obtain
waivers on the manning and ownership requirements from the Ministry
of Transport.
The Ministry of Transport will soon publish
Guidelines and Criteria that will provide more details regarding
the implementation of the Act.
Top
Nigeria
Reviews Maritime Laws
The Federal Government has set up a twelve-man
committee of experts to review Nigeria’s Merchant Shipping
Act, which has been in force since 1962. The government cited
the need to update Nigeria’s maritime laws in line with
those of developed countries like the United States of America,
Canada, Britain, Japan, Netherlands, France and Germany.
The Committee is chaired by Alhaji Abdullahi
Ibrahim (SAN), former Attorney General of the Federation and
Minister of Justice. Its specific tasks are:
• to research update and publish
the maritime laws of the country
• to collaborate with maritime organizations within and
outside the country with a view to updating agreements, conventions
and treaties among others. The
Committee may expand its terms of reference to enable it achieve
its objectives. It is scheduled to complete its assignment and
submit its report in July.
Top
Case
Reviews
The M.V. Concordia:
Strict Construction of Time Limitations
The one year time limit within which an action may be brought
against a carrier in respect of loss or damage to goods is applied
in Nigeria by virtue of the Carriage of Goods by Sea Act, which
implements the Hague Rules. In Corona Schiffahrtsgesselschaft
MBH (The Owners of the “M.V. Concordia”) vs. Emespo
J. Continental Limited (2002) 3 NWLR (Part 753) 205, the Nigerian
Court of Appeal considered the question whether the owners could
be joined in an action in personam after the expiration of the
time limit under the Hague Rules, the action itself having been
commenced within the time limit.
Facts:
The claim was for damages for breach
of contract and negligence for the short delivery of 12715 pieces
of diverse motor spare parts carried on the Concordia. Clause
6 of the bill of lading gave supremacy to provisions of national
law or international conventions on questions of time limitation.
Art. III rule 6 of the Hague Rules, which are applicable in
Nigeria by virtue of the Carriage of Goods by Sea Act, provides
that the carrier and the ship will be discharged from liability
in respect of the goods unless the suit is brought within one
year of their delivery or of the date when they should have
been delivered.
The action was commenced within the time
limit, but it had been commenced against the time charterers
and the agents of the vessel. The Plaintiff subsequently applied
to join the owners in the suit but only after the time limit
had expired. The Federal High Court joined the owners and subsequently
refused their request to discharge the joining order. The owners
appealed.
The Court of Appeal considered two issues.
First, does the commencement of the suit within the time limit
(although against the wrong parties) justify the making of the
joining order against the owners after the time limit had expired?
Secondly, the Plaintiff had argued, in the alternative, that
the error was a mere “misnomer”, in the sense that
they had validly commenced the action against the owners within
the time limit, although they had in error referred to the owner
by the charterers’ name.
In dealing with the first issue, the
Court of Appeal followed Nigerian and English case law, which
establish that an application to join a party must be made within
the period of limitation. In the English case Marbro vs. Eagle,
Star and British Dominions Insurance Co. Ltd. (1932) 1 K.B.
485, which the Nigerian Court of Appeal relied on, Scrutton
L.J. had explained the rationale: “the court has always
refused to allow a party or a cause of action to be added where,
if it were allowed, the defence of the statute of limitations
would be defeated”.
The Court of Appeal found no difficulty
in also dismissing the alternative argument based on “misnomer”.
The Plaintiff’s affidavit evidence suggested that it had
deliberately sued the charterers, under the misimpression that
the vessel was bareboat chartered (contrary to its argument
that it had sued the owners in a wrong name), and had only discovered
the true nature of the charterparty when the time charterers
and ship’s agents produced the agreement in court.
Comment:
The decision of the Nigerian Court of
Appeal in the M.V. Concordia applies a strict constructionist
approach to the time limit in Art. III rule 6 of the Hague Rules,
and demonstrates a strong commitment to the principle that cargo
owners should give prompt notice of their claims to carriers.
Top
The
M.V. Baco Liner 1:
The Hague Rules do not apply to Shipments into Nigeria,
except …
The Nigerian Carriage of Goods by Sea Act 1926 (COGSA) incorporates
the Hague Rules into Nigerian law. However, section 2 of the
Act provides that the rules are only applicable to voyages that
originate within Nigerian ports. Ships that carry cargo from
other countries to Nigerian ports will therefore not be able
to avail themselves of the defences provided for in the rules,
such as the one-year time limit provided in Article III rule
6, unless the bills of lading covering particular shipments
include a paramount clause incorporating the rules (such as
in the “M.V. Concordia” reviewed above).
Experience shows that most standard forms
of bills of ladings covering shipments into Nigeria incorporate
a paramount clause. The one-year time limit defence will therefore
usually be available to ship owners faced with cargo claims.
However, the decision of the Nigerian Court of Appeal in Horizon
Fibres (Nigeria) PLC vs. M.V. Baco Liner 1 (2002) 8 NWLR (Part
769) 466 demonstrates the procedural difficulties that section
2 of the Nigerian COGSA continues to present for ship owners
who wish to avail themselves of the one-year time limit defence
in the Hague Rules, even when they rely on bills of lading that
incorporate a paramount clause.
Facts:
Thirty nine cases of 1525 KVA generating
sets were shipped in apparent good order and condition on board
the M.V. Baco Liner 1 from Hamburg, to Port Harcourt, Nigeria.
On discharge at Port Harcourt, two cases were discovered to
have been damaged. The consignee commenced action against the
ship and its owners at the Federal High Court Lagos. The bill
of lading covering the shipment included a paramount clause
which made the Hague Rules compulsorily applicable to the contract
of carriage. The suit was commenced after the expiration of
the one year time limit prescribed in Article III rule 6 of
the Hague Rules.
The ship owners successfully persuaded
the Federal High Court to dismiss the suit preliminary on the
ground that the action was time barred under Article III rule
6 of the Rules. In doing so, the ship owners had employed a
procedure (“the Order 27 application”) by which
the Federal High Court can dismiss a suit preliminary without
calling upon a defendant to answer upon facts. The shipowners
had argued that it was clear from the matters narrated in the
consignee’s statement of claim that the suit was filed
after the one year time limit. They could not rely on the Nigerian
COGSA which implements the Hague Rules (this not being a shipment
that originated in a Nigerian port) but they had produced the
bill of lading to show that it incorporated a paramount clause
applying the Hague Rules.
The question that arose on appeal was
whether the Federal High Court was entitled to examine the bill
of lading in the context of an application to dismiss the suit
preliminary. The consignee argued that the court was not entitled
to examine the bills of lading when determining an Order 27
application since no discussion of questions of fact is allowed
in the context of such application.
The Court of Appeal, following an earlier
decision of the Supreme Court (Boothia Maritime Inc. vs. Fareast
Mercantile Co. Ltd. (2001) 9 NWLR (Part 719) 572, decided that
the Federal High Court was not entitled to examine the bill
of lading in the context of an Order 27 application. Consequently,
the question whether the suit was time barred had to be decided
without recourse to the Hague Rules, and the court was obliged
to assume, at that stage, that the applicable time-limit was
three years, this being the general time-limit prescribed in
respect of actions brought under the Nigerian Admiralty Jurisdiction
Act of 1991.
Comment:
The effect of the Court of Appeal’s
decision in M.V. Baco Liner 1 is that owners cannot rely on
the Hague Rules time limit for the purpose of bringing a summary
end to cargo claims. Rather, they have to wait for the court
to examine the relevant bill of lading after the full hearing
of the case, and the defence will be available to them only
if the relevant bill of lading incorporates a paramount clause.
Top
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The
M.V. Frost Castor and the M.V. Normandic: General Words
are Sufficient to Incorporate Charter parties into Bills of
Lading
Bills of lading that incorporate the provisions of charterparty
agreements between ship owners and charterers often end up in
the hands of third party consignees, who have neither seen the
charterparty agreements nor otherwise know what terms they contain.
The decision of the Nigerian Supreme Court in Awolaja vs. Seatrade
Groningen B.V. (2002) 4 NWLR (Part 758) 520, illustrates that
consignees may unwittingly incur liabilities under terms of
charterparties that are incorporated into their bills of lading.
Facts:
The M.V. Frost Castor
and the M.V. Normandic were chartered under “Gencon”
charterparty terms to carry cargoes of frozen fish from Holland
and for delivery at Apapa, Lagos. The master issued bills of
lading, which were ultimately endorsed to the defendants (consignees).
Each of the bills of lading contained the term “to be
used with charterparties”.
Although the vessels arrived at Apapa
Lagos on schedule, the defendants did not discharge the cargoes
of frozen fish on time. The ship owners claimed against the
defendants under the charterparties for loss suffered as a result
of the delay.
The defendants resisted the incorporation
of the charterparty terms into the bills of lading on two grounds.
First, they argued that the charterparties were not effectively
incorporated into the bills of lading. Secondly, they argued
that in any event there were no charterparties to incorporate,
as the charterparty documents were not signed.
On the first contention, the Supreme
Court confirmed the decisions of the two lower courts (the Federal
High Court at first instance and the Court of Appeal) in holding
that the words “to be used with charterparties”
were sufficient to incorporate the terms of the charterparties
into the bills of lading. In arriving at this decision, the
Supreme Court, guided by dicta in Skips A/S Nordhein & Others
vs. Syrian Petroleum Company Limited and Another (1983) 3 All
ER 645 reasoned that words of incorporation do not cease to
be operative merely because they are general and wide.
The Supreme Court also dismissed the argument based on the non-signature
of the charterparties.
First, the court found that there was
no evidence that the ship owner had intended or agreed that
the charterparties will not be effective unless they were signed.
Secondly, the court was satisfied with
evidence presented by the shipowners as to trade usage, which
showed that charterparties relating to reefer vessels are binding
once the parties have agreed on the terms and conditions through
telex.
Finally, the court remarked on the peculiarities
of shipping contracts and advances in modern technology, and
the widespread use of telex, fax and e-mail in entering into
and concluding contracts for the carriage of goods by sea.
Top
The M.V. African Hyacinth
and the M.V. Fortunato: Absence of Pilot on a Vessel in
Compulsory Pilotage District Destroys a Limitation of Liability
Claim
In a claim for limitation of liability
in the event of collision between one vessel and another, the
vessel seeking to limit its liability would lose the right to
so do if the collision occurred in a compulsory pilotage area
and the vessel seeking to limit its liability did not have a
qualified and competent pilot on board at the time of the collision.
So held the Nigerian Court of Appeal [Lagos Division] in Ship
Care Limited & The M.V. African Hyacith vs The Owners of
the M.V. Fortunato & Another (Unreported Court of Appeal
decision of 2nd July 2002).
In this case, the Owners of the “African
Hyacinth” had claimed a limitation of their liability
in respect of damage resulting from the collision between their
vessel and the Respondent vessel [M.V. Fortunato]. They claimed
that their liability ought to be limited as provided for by
Section 363 of the Merchant Shipping Act of 1962 and paid the
sum of N62, 055.51 [Sixty-two thousand, and fifty five Naira,
fifty-one kobo], which sum they believed to be the limit of
their obligations if the section applied. The collision had
occurred on the 11th of April, 1997 at Warri Port, Nigeria.
The Federal High Court held that the
Owners of the “M.V. African Hyacinth” were not entitled
to invoke the provisions of Section 363 of the Act as the collision
occurred in a compulsory pilotage district and the vessel did
not have a competent captain on board at the time of the collision.
As to the issue of the seaworthiness of the vessel, the Federal
High Court had held that it was seaworthy at the relevant time.
The Owners of the “M.V. African
Hyacinth” appealed to the Court of Appeal against the
Federal High Court’s decision that the vessel could not
limit its liability because it did not have on board a competent
pilot in a compulsory pilotage area. On the other hand, the
owners of the “M.V. Fortunato” cross-appealed against
the decision that the vessel was seaworthy.
The appellate justices held that by virtue
of the Compulsory Pilotage Districts [Establishment] Order 1991,
the Warri Port is a compulsory pilotage district, and, since
the vessel did not have a qualified captain on board at the
requisite time, as a result of which it had breached the provisions
requiring it to have a competent pilot on board in a compulsory
pilotage district, it was unable to limit its liability.
On the issue of the seaworthiness of
the vessel, the Court of Appeal reversed the Federal High Court.
The appellate justices held that a vessel which was not being
piloted as statutorily required in a compulsory pilotage district
cannot be said to have been seaworthy at the relevant time.
Top
Events at Aluko & Oyebode
• Aluko & Oyebode hosted the January 2004 Monthly
Breakfast Forum of the Nigerian/South-African Chamber of Commerce.
At the meeting, Managing Partner, Gbenga
Oyebode, MFR presented a paper on “Investing in Nigeria
- A Legal Perspective”.
• Miss Uche
Nwokocha, a Senior Associate in the law firm of Aluko &
Oyebode was recently appointed to the Global Focus Task Force
of the International Trademarks Association Membership Services
Committee for the 2004-2005 committee term.
• The Petroleum Economist in association
with Aluko & Oyebode will host a 4-day training titled “Understanding
Gas & Power Developments in Emerging Market”. The
course is specially designed for bankers, project financiers,
management consultants, oil and gas executives, officials of
government institutions, regulators, legal practitioners and
economists. The course will hold between the 15th and 18th of
March, 2004 at Le Meridien Eko Hotel, Lagos. For further information
Click
here to see the brochure, or
Contact Peter Bajowa, telephone: +44(0) 20 7831 5588, Fax: +44(0)
20 7831 5313,
E-mail pbajowa@petroleum-economist.com
Top
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format >>Feb
2004 ShippingReview
Editors’ Note:
The Aluko & Oyebode
Shipping Review Newsletter is prepared for the general information
of our clients and other interested persons.
Due to the nature of its contents, this newsletter should not
be regarded as legal advice.
If you have any questions or comments regarding the contents
of this Newsletter, please contact any of the members of the
A&O Shipping Group
.
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