Trends in admiralty practice in Nigeria

The risk and resource borne in, and by factors in maritime trade are of such volume that either of due diligence or litigation on them necessarily has to pay the lawyer. Whether it has been worth the while of many a practitioner in recent time, is a question worthy of consideration. In the opinion of […]

The risk and resource borne in, and by factors in maritime trade are of such volume that either of due diligence or litigation on them necessarily has to pay the lawyer. Whether it has been worth the while of many a practitioner in recent time, is a question worthy of consideration.
In the opinion of this writer, maritime practice is not being fully exploited; as such, not as much as could possibly be derived from it is being enjoyed. More still, maritime practice has not made much progress since the seventies from the traditional vessel arrest-release gymnastics and occasional ancillary litigation. But is that all there is to maritime law? I daresay it isn’t. It often beats my reasoning why Nigerian lawyers are rarely involved in high-yielding international arbitrations in respect of transactions having to do with Nigeria.
First it must be pointed out that we have the right environment for lucrative practice of maritime law. We have an expansive coastline. More important is the sheer volume of vessels coming into these waters by virtue of our import-appetite. So it is not that the opportunity for the practice to thrive is not there. What then is it?
It is imperative that we have to start from the very fundamentals. Know-how is essential; specialization is therefore key to mastery of the field. Few lawyers undertake a deliberate study of maritime law. Such study widens the understanding of concepts which ordinarily may not be fully appreciated for their technicalities. It also gives more meaning to international conventions and local legislation which greater significance may be lost in the general context of legal issues. At the end of the day the practitioner is better enamoured and has greater confidence in both himself and practice. Once the factor of personal capacity is taken care of, then other factors are influencable by system synergy.
Time was when the minimum amount chargeable to effect the release of an arrested vessel was in the region of ten thousand pounds. These days, except for few exceptional cases, release of such vessels comes very cheap. This came largely from the obsequious industry of a few legal practitioners, which unwittingly, has lowered the otherwise perk rates of vessel-release services.
In addition to this has been the productive coalition of ship owners and charterers through P & I clubs. Upon arrest of their vessels, they are now more disposed to quick resolution through possible settlement of the claims, which often, may come to an amount far less than whatever the costs, direct or indirect, of litigation.  The results are of such options are laudable no doubt; indeed they belie the value of ADR as a method of quick dispensation of justice.
Cabotage enforcement
Since the coming into force of Cabotage Law in Nigeria on May 1, 2004, numerous challenges have bedeviled the effective implementation and enforcement of the law. The conditions prescribed for obtaining a waiver by foreign firms are less challenging, that it is likely that more foreign ships will be granted waivers to engage in cabotage in Nigeria.
Similarly, the exclusion of Indigenous Shipowners Association of Nigeria (ISAN) from ministerial consultation process is a big challenge. Same goes for the high cost of enforcement and monitoring. Piracy is another big challenge. There has been a report of armed gang terrorizing vessels and maiming crew members on the nation’s territorial waters.
Nigerian ports are termed to be below international standards and commercially unfriendly, charging high tariffs and delivering poor service. The challenges are myriad and include inadequate supply of crafts and plants, a cumbersome documentation system, dilapidated port infrastructure, low labour productivity and volatile dock labour, corruption, vandalism, criminal damage, multiplicity of government and security agencies, etc.
Limitation of liability rules
The liability system in maritime matters under the Merchant Shipping Act is a serious clog to the smooth flow of litigation under the admiralty jurisdiction. Often the value to which a claimant under The Hague rules is entitled to is hardly worth the paper on which the contract is written. This removes any motivation the claimant ordinarily would have to litigating the matter. Of course the backlash effect of this is felt by the lawyer, who is denied a brief. It renders the value of the lawyer’s skill low in the eyes of the client. More active effort therefore ought to be expended in seeing to the domestication of the Hague-Visby rules, which is more friendly to the claimant. But the extant rules on liability definitely cannot justify dwindling maritime practice. We have to be more creative.
Current realities
What the shipping sector sustains and generates is nothing near what it potentially can. Efficiency is low, reaction/response time, high. Government involvement is deep, its procedures long-winding and its pace, slow. Regulatory legislation are behind the times; no long-term goals are being pursued, policies are thought up and pursued without consideration of their multiplier implications, are then jettisoned even before they take off; the economy is slower for it because long-term planning is difficult
Way to go
A well-segmented, articulate, implementable and target-driven National Shipping Policy has to be formulated, but more importantly, consolidated and strenuously implemented. Government should withdraw and be involved only in regulation. Private sector stakeholders, based on their practical experience, should come together and devise a policy that will define the benchmarks to be achieved within the next decade, and how that is to be done.
A Policy Implementation Audit Body/Committee/Panel or whatever name it is called has to be in place, dedicated to audit of policy implementation. That said, it is now exactly two (2) years since the Presidential Committee on the Review of the Outcome of the Maritime Sector submitted its Report. Nigerians are still awaiting the outcome.
Policy
In this respect, policy throws up a potentially thriving area for maritime lawyers to engage in. This of course is within the context of current realities: the sector is in need of properly articulated and well-packaged policy blueprints, which are open to be developed by competent practitioners. The new democratic spirit conduces to this option, as both the legislature and executive are well disposed to such new and functional thinking.
What then does this involve? I think the first step here would be to identify maritime stakeholders. That enables one to more easily locate where particular interests would lie, and for whose favour. Of course, as stated earlier, a good knowledge of the industry is indispensable here. Then effective networking would be an added advantage. Once these are in place, it is easier for sub-sectoral needs to be identified and policy proposals put together. Such proposals are products with a market value corollary to their quality.
 ADR
It was earlier highlighted that ADR is of significant value in the quick dispensation of justice. It would be in the interest of practitioners and parties if ADR processes are more readily resorted to in Maritime claims. Because claimants are constrained by the extant limitation of liability rules, and because litigation can be so time consuming, and because often the claimant is often in a less than advantageous position in the contested transaction, litigation is usually a Hobbesian choice slapped upon him. For the ship owner, charterer insurer or other party in the advantage, the story is no different. Speed for them too, is of the essence, and they would not like to prejudice existing business relationships by less than fair practices. ADR therefore presents a perfect opportunity of compromise between the parties, of quick dispensation of justice, and of possible greater turnover for lawyers, who will have more briefs to deal with.
Looking through the usual suspects within the maritime industry, it is noteworthy that there exist a number of flashpoints which are perfect platforms for ADR. These include the issues from the SASBF and percentage levy between the NIMASA and shipping companies, issues arising from privatization involving NIGERDOCK, NPA and the federal government, issues arising from the relationship between NPA and port users, and the enduring question of cargo claims between cargo interests and shipping interests.
The essence of ADR in all these cases is underscored by the nature of relationships between the feuding parties: they are continuing relationships in which the parties need one another; win-win is needed, and this cannot be provided by litigation.
Coalition & capacity building, privatisation & globalisation
Coalition building amongst maritime lawyers is growing, and portends good for the sector. Groupings of maritime lawyers serve to promote common interests and enable practitioners exchange valuable ideas and information. It also presents a good forum for networking, and is recommended to all practitioners. The privatisation of critical maritime establishments like the ports, and NIGERDOCK, have thrown opportunities open for maritime lawyers in consortia involved in the process.
Regarding capacity building, the federal government, through the Ministry of Industry, Trade and Investment, on June 14, 2014 revealed that it plans to partner NigerDock,, in churning out skilled manpower for the industry.
Due diligence and compliance auditing of the numerous transactions effected in the process has been quite a handful, but at the same time, rewarding. For greater capacity, temporary alliances could be pursued between firms; this helps in efficiency and target attainment. Related to this is the continuing globalisation of the world economies. This has enhanced international networks. It has created jobs for many maritime lawyers locally, either as agents or attorneys in transactions with Nigerian flavour. It would therefore pay the practitioner who consciously makes efforts to cultivate necessary global linkages.
The era in which we find ourselves locates us with numerous brief-yielding possibilities.  As maritime lawyers we have to be ready to sponge useful ideas and practices from our environment. IT, globalisation, privatisation, democracy, NEPAD, AGOA and as many other emergent and relevant happenstances as come up, have to be exploited. They are worth it.

Olushola Abiloye is with Olisa Agbakoba & Associates