SHIPPING AND ADMIRALTY – ARREST OF A SHIP – Condition(s) that must be established to succeed in an action for wrongful arrest of a ship

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“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)

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