Where a Ship or Vessel is Protected from Arrest

1.      THE VESSEL “MV SIRIUS –B”

2.     SHALLSEIS LIMITED U.K

             (Owners of the Vessel “MV Sirius – B”)

                                         V

1.      MARINE SERVICE AND SUPPLY COMPANY INTERNATIONAL LIMITED

2.     SHALLSEIS MARINE SERVICE LIMITED

Facts:

The respondent commenced suit No: FHC/PH/CS/415/2012 against the appellant at the Federal High Court and sought US$500,000 as damages for breach of contract and general damages arising from two charter parties made in 2008 and 2012 respectively. They also sought interest at the rate of 15% per annum from date till judgment and at 5% thereafter till full settlement of judgment sum. The suit was consolidated with suit No: FHC/PH/CS/174/2012

The respondent filed a motionex partein suit No: FHC/PH/CS/415/2012 and sought an order of arrest of the vessel “Sirius-B” with official number 9474, call sign J8B3002 and IMO Number 8201260 lying at Kris Oil Integrated Services Jetty, Daddo Terminal Beach, Apapa, Lagos pending the provision by the appellant of an acceptable bank guarantee from a first class Nigerian bank in the sum of US$2,854,989.75 as security for the respondents’ claims in the suit.

On the 26th November 2012, after hearing the ex parte application, the trial court granted the relief sought by the respondents. The trial court went further and discharged an interim order it made in suit No: FHC/PH/CS/174/2012 though that suit was not listed and was not called before the trial court on that day.

The appellants were aggrieved and they appealed to the Court of Appeal. The respondent raised a preliminary objection and challenged the jurisdiction of the Court of Appeal to hear the appeal.

Judgment

When there is a valid caveat in operation, the ship or vessel in issue is protected from arrest by the court. In the instant case, if the trial court took into consideration the fact that there was a valid caveat against arrest, it would not have issued the arrest warrant. Consequently, the arrest of the vessel cannot be justified.

The fundamental objective of arresting a vessel or ship is to obtain satisfaction of a Judgment in an action in rem. Pre-judgment arrest in admiralty proceeding is either to prevent, pending the determination of the proceedings, the removal from the jurisdiction, a particular vessel which may be used in satisfaction of a possible judgment in the claimant’s favour, or to compel in lieu, the provision of security correspondent in value to the amount claimed or sometimes the value of the particular vessel

By Order 7 rule 1(1), (2) and (3) of the Admiralty Jurisdiction Procedure Rules 2011, a party to a proceeding commenced as an action in rem may by a motion ex parte apply for a warrant of arrest in respect of the ship or other property against which the proceeding was commenced, provided that at the time of the application, the ship or other property is within Nigerian territorial waters or is expected to arrive there within three days. Before a warrant to arrest any ship or other property is issued, the party applying shall procure a search to be made in the caveat book for the purpose of ascertaining whether there is a caveat against arrest in force with respect to that ship or other property. A warrant of arrest shall not be issued until party applying has filed an affidavit sworn to by him or his agent containing the particulars required by Order 7 Rule 1(6) of the Rules. 

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