SHIPPING AND ADMIRALTY – ARREST OF A SHIP – Condition(s) that must be established to succeed in an action for wrongful arrest of a ship
“For an arrest to be declared wrongful, certain thresholds must be met before compensation is awarded. The Court of Appeal in a bid to justify the award of the sum of US$400,000.00 relied heavily on Section 13 of the Admiralty Jurisdiction Act, Laws of the Federation of Nigeria, 2004. It needs be said that for Section 13 of the Admiralty Jurisdiction Act, Laws of the Federation of Nigeria, 2004 to apply certain parametres must be established such as that the arrest was made unreasonably and without good cause. See Section 13 of the Admiralty Jurisdiction Act, Laws of the Federation of Nigeria, 2004. “13(1) where in relation to a proceeding commenced under this Act- (a) A party unreasonably and without good cause – (i) (ii) obtain the arrest of a ship or other property under this Act…” The question immediately arising is whether the Court of appeal did rightly come to the conclusion that the arrest was wrongful when it found in the lead judgment delivered by Honourable Justice Yargata Byenchit Nimpar, JCA, thus: “Let me first state categorically that the Judgment sum awarded against the appellant as outstanding fees for services rendered is duly supported by evidence and it stands” What seems glaring from the facts is that the 1st respondent was in possession of the vessel at the relevant time, the 1st respondent was also the owner of the cargo of Premium Motor Spirit (PMS) on board the vessel which cargo was also arrested by Order of Courts. Therefore, there were no facts upon which the Court of Appeal could infer unreasonableness and without good cause for the arrest of both the vessel and the cargo on board the vessel. In Compania Navegacion & Financiera Bosnia S.A. (Owners of the ship M.V. Bosnia) v. Mercantile Bank of Nigeria Limited. The BOSNIA No.2 (1980-1986) Nigeria Shipping Cases (NSC) Vol.2, it was held by the Court of Appeal that it is settled law that for any case of unjustified arrest of a ship to give rise to a successful action in damages there must be proof of either bad faith or gross negligence. That Court went on to state that mala fides or bad faith, implies a malicious intent, improper motive and as in the common law action of malicious prosecution, the bad faith has generally to be proved as a separate requirement from the absence of justification for the arrest. Another way of stating it simply is that the head of claim is not a given, just by the mere assertion of an arrest without more. It must be properly established that the arrest was unreasonable, without just cause or in bad faith and that has not happened here.” Per MARY UKAEGO PETER-ODILI, JSC in BRONWEN ENERGY TRADING LTD. v. OAN OVERSEAS AGENCY (NIG) LTD & ORS (2022-LCER-46529-SC) (Pp 22 – 25; Paras F – A)
Facts
This appeal is against the judgment of the Court of Appeal, Lagos Division delivered on 9th December, 2014, Coram: Joseph Shagbaor Ikyegh, Yargata Byenchit Nimpar and Jamilu Yammama Tukur JJCA.
The Appellant commenced an admiralty action by writ against the Respondents at the Federal High Court claiming the sum of $1, 986,939-97 representing cargo dues, ship charges and agency fees on account of services rendered by the Appellant to the 1st Respondent. The Appellant also filed a motion ex-parte requesting an order of arrest/detention of the Vessel MT “Ocean Success” and the Cargo of 15,300 MT of premium Motor Spirit (PMS) onboard the Vessei MT “Ocean Success” both being the only known assets of the 1st Respondent within jurisdiction in the reasonable contemplation of the Appellant.
On 24th November, 2006, the Federal High Court made an order for the arrest of the Vessel MT “Ocean Success” and the Cargo of 15,300 MT of Premium Motor Spirit (PMS) on board the said vessel pending the provision of a Bank Guarantee from a reputable Bank in Nigeria to secure the claim of the Appellant at the Court.
Upon service, the 1st Respondent filed an application for the release of the MT “Ocean Success” and Cargo of 15,300 MT of Premium Motor Spirit on board the vessel which were detained pursuant to the order of the Federal High Court as well as it statement of defence.
At the end of trial, the trial Court presided over by Abutu CJ delivered judgment on the 14th day of March 2011 in favour of the Appellant. The 1st Respondent who had a counter claim appealed to the Court of Appeal. The appeal succeeded in part, the Court of Appeal granted the counter claim of the 1st Respondent. Thus, dissatisfied with the judgment of the Court of Appeal, the Appellant appealed to the Supreme Court. At the Supreme Court, the 1st Respondent filed a cross appeal. The Appellant as the cross respondent filed a preliminary objection to the competence of the cross appeal. The Appellant/cross respondent contended that is no cross appeal as no extension of time was sought by the cross-appellant and since no leave was granted, the cross appeal is incompetent and the Court lacking in jurisdiction to entertain it.
Issues
The Supreme Court determined the appeal on the following issues thus:
“i. Having regard to the facts of the case and the evidence before showing undoubtedly that the vessel in question was wrongfully arrested, whether the lower Court was right in awarding the sum of USD$400,000.00 in favour of the 1st Respondent being daily the charter cost.
ii. Whether the Court of Appeal was right in awarding the sum of United States dollars US$9,500.00 in favour of the 1st Respondent being cost of issuing Bank Guarantee and interest of 18% being Central Bank of Nigeria official rate on the sum of the Bank Guarantee, when the evidence required under law in support of the claims was not before the Court.
iii. Whether the Court of Appeal was right when it awarded “post judgment interest at the rate of 5% from date of judgment until the total sum is fully liquidated” when no such claim was made by the 1st Respondent before the Court.” The Supreme Court also considered the merit of the preliminary objection filed by the Appellant/cross respondent against the competence of the cross appeal filed by the 1st Respondent/cross appellant.
Lead Judge(ment)
MARY UKAEGO PETER-ODILI, J.S.C. (Delivering the Leading Judgment)
Held
On the whole, the appeal succeeded in part. The judgment of the Court of the Appeal was affirmed save for the award of US$400,000.00 in favour of the 1st Respondent which was set aside. The preliminary objection filed against the cross appeal was upheld and thus, the cross appeal was struck out for being incompetent.
Alternate Citations
(2022) LPELR-57306(SC)
Full Judgment
Counsel:
N.K. ORAGWU, ESQ.
with him
G. Ogwu and A. Liman.
For 1st Respondent
2nd and 3rd Respondents absent though served on 16/11/2021.
For Appellant(s)
For 1St Respondent(s)
Counsel’s Photograph(s) Needed.