MT. ORYX TRADER & ANOR V WRIST SHIPPING SUPPLY

Legalpedia Citation: (2025-02) Legalpedia 23285 (SC)

In the Supreme Court of Nigeria

Holden at Abuja

Fri Feb 21, 2025

Suit Number: SC.CV/733/2023

CORAM

Helen Moronkeji Ogunwumiju- Justice of the Supreme Court of Nigeria

Emmanuel Akomaye Agim- Justice of the Supreme Court of Nigeria

Haruna Simon Tsammani- Justice of the Supreme Court of Nigeria

Stephen Jonah Adah-Justice of the Supreme Court of Nigeria

Mohammed Baba Idris-Justice of the Supreme Court of Nigeria

PARTIES

MT. ORYX TRADER
ARIAL MARINE COMPANY APPELANT(S)

APPELLANTS

WRIST SHIPPING SUPPLY

RESPONDENTS

AREA(S) OF LAW

ADMIRALTY LAW, MARITIME LAW, SHIPPING LAW, PROCEDURAL LAW, ADMIRALTY JURISDICTION, CAVEAT, ARREST OF VESSELS, DAMAGES

SUMMARY OF FACTS

The Appellants (MT. Oryx Trader and Arial Marine Company) filed an originating summons at the Federal High Court seeking various reliefs, including an order that the arrest of their vessel, MT. Oryx Trader, by the Respondent’s caveat against the release of the vessel dated April 29, 2020, in suit FHC/L/CS/223/2020 was wrongful, as the Respondent was not a party to the action. The Appellants also sought payment of USD3,464,800 for damages for the wrongful arrest of the vessel by virtue of the undertaking to indemnify given by the Respondent in their caveat against release filed from April 29, 2020, to July 9, 2021. Additionally, they requested payment of interest at 21% of the judgment sum from April 29, 2020, until liquidation of the judgment debt.

The Respondent, a Norwegian shipping company, had provided supplies to the Appellants and issued invoices for the payment of €60,417.26 for services rendered and accrued interest. Upon the Appellants’ refusal to pay, and upon discovering that the vessel had already been arrested under various Orders of Arrest issued by the Federal High Court in different suits (the “KPI Suit,” the “PAK Suit,” and the “Seaport Suit”), the Respondent entered a caveat against the release of the vessel in two of these suits (FHC/L/CS/210/2020 and FHC/L/CS/223/2020) to protect its interests. The Respondent also undertook to indemnify the Appellants should it be held that the caveat ought not to have been entered.

Both the trial Federal High Court and the Court of Appeal dismissed the Appellants’ claims, finding that a natural or artificial person can file a caveat against the release of a vessel and that the caveat was valid. The Court of Appeal also found that since the 1st Appellant’s vessel was already under arrest prior to the caveat, the damages claimed had no nexus with the Respondent’s entry of a caveat, and refused to penalize the Respondent in damages for unproven unlawful or wrongful detention. The Appellants subsequently appealed to the Supreme Court.

HELD

1.The appeal was dismissed.

2.The Supreme Court held that the filing of a caveat by the Respondent against the release of the 1st Appellant’s vessel did not constitute wrongful arrest to warrant the payment of damages by the Respondent to the Appellants.

3.The Court affirmed that the Respondent could not have arrested a vessel which was already under arrest, as the 1st Appellant’s vessel was already arrested in other suits before the Respondent filed its caveat.

4.The Court distinguished between caveats against the release of vessels and the arrest of vessels, emphasizing that they are governed by different provisions of the Admiralty Jurisdiction Procedure Rules.

5.The Court ordered costs of N4,000,000.00 (Four Million Naira Only) against the Appellants in favor of the Respondent.

ISSUES

1.Whether Section 13 of the Admiralty Jurisdiction Act provided that for the Respondent to be liable for damages for the arrest of the Appellants’ vessel, there must be a finding of Court to the fact that the arrest was wrongful?

2.Whether by the arrest of the Appellants’ vessel by the Respondent’s Caveat against release of the Appellants’ vessel dated April 29, 2020, the Respondent is not bound to indemnify the Appellants for the arrest of the Appellants’ vessel?

3.Whether the caveat against release of the Appellants’ vessel MT. Oryx Trader did not expire after one year and the vessel was released from arrest after the expiration?

The Supreme Court crystallized these into a lone issue: “Whether the filing of a caveat by the Respondent against the release of the 1st Appellant vessel did not constitute wrongful arrest to warrant the payment of damages by the Respondent to the Appellants.”

RATIONES DECIDENDI

CAVEAT AGAINST RELEASE – PURPOSE AND LEGAL EFFECTS OF A CAVEAT:

“A caveat against release registered in the Courts serves to prevent a ship’s unconditional release after arrest, by committing to pay a bond for any sum claimed against the ship which is equal to or less than the amount stated in the caveat. The caveator must ensure that notice is served. Where the caveator fails to do so, the Courts have held that the caveat or cannot expect the parties to the relevant suit to provide a copy of the application for release. The actual purpose of a caveat is to enable the caveator be put on notice before the arrest or release of a vessel.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

CAVEAT – REQUIREMENTS FOR CAVEATOR TO OBTAIN RELIEF:

“In the event of the need for a
follow-up action in the matter of the caveat requiring the Court to grant a
relief or make an order in favour of the caveator, the caveator must take steps
to make himself a party to the suit and also claim against the adverse party.
It is the claim that would enable the Court determine whether or not it has
jurisdiction and whether the Claimant is entitled to the relief sought.” –
Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

CAVEAT AGAINST RELEASE – ENTITLEMENT TO SECURITY:

“Furthermore, entering a caveat against release does not automatically entitle the caveator to the security flowing from the ship in respect of which the caveat has been entered. A request for security can be made only when there is a subsisting claim against the ship in respect of which the caveat has been entered. This is because the provision of Order 8, Rule 6 of the Admiralty Jurisdiction Procedure Rules 2011 on a caveat against release is available in lieu of obtaining a further arrest of that ship or other property.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

ARREST WARRANT – WHO MAY APPLY FOR ARREST OF VESSEL

“An arrest warrant may be applied for only by a party to proceedings commenced as an action in rem which precedes an application for a ship’s arrest.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

DEFINITION OF ARREST – DISTINCTION FROM SEIZURE:

“‘Arrest’ as ‘the detention of ship by judicial process to secure a maritime claim, but does not include the seizure of a ship in execution or satisfaction of a judgment.'” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

DEFINITION OF CAVEAT – UNDERTAKING BY INTERESTED PARTY:

“‘Caveat’ is explicitly defined as: ‘an undertaking filed in the Registry by the owner of, or person interested in, a ship or other property to appear to any action in rem filed against that ship or other property and provide bail even though the ship or other property is not arrested.'” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

APPLICATION FOR ARREST – PARTIES WHO CAN APPLY:

“Order 7 of the AJPR, highlights that only a party to an action in rem against a vessel that can apply for, and procure, an order of the Court for the arrest and detention of said vessel.” –Per HELEN MORONKEJI OGUNWUMIJU, J.S.C

CAVEAT AGAINST RELEASE – RELATIONSHIP WITH ARREST:

“A caveat against the release of a vessel by virtue of Order 8 Rule 6 is made pursuant to an Arrest of the vessel and is expressly stated to be in lieu of a further arrest. This, undoubtedly indicates that, the intendment of the legislators was to clearly distinguish between arrests of vessels and caveats against the release of vessels.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

SECURITY FOR CLAIM – OPTIONS AVAILABLE TO CLAIMANTS:

“It is clear that under the above-cited provisions of the AJPR, though a party may (as security for a claim) procure the arrest of an already-arrested vessel, he/she/it may also merely file a caveat against the release of the arrested vessel so as to be kept abreast of the goings-on of his/her/its preferred security (the already-arrested vessel).” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

INDEMNITY FOR WRONGFUL CAVEAT – COMPLIANCE WITH RULES:

“The Respondent ab initio had fulfilled the conditions of Or. 8 R. 2 by providing for indemnity in the event of an unreasonable or wrongful caveat. The law allows the Respondent as a person who has a claim against the vessel to do so.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

VESSEL ALREADY UNDER ARREST – IMPOSSIBILITY OF FURTHER ARREST BY CAVEAT:

“Most importantly, the vessel was already under different orders of arrest in different suits before the Respondent procured an order of caveat against its release.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

CLAIM FOR DAMAGES – LACK OF NEXUS BETWEEN CAVEAT AND CLAIMED LOSS:

“The facts do not support the claims of the Appellants, more so, as the period of loss of custom on which the claim in this appeal is founded commenced long before the date of the entry of the KPI caveat and ended long after the expiry of the said caveat.” – Per HELEN MORONKEJI OGUNWUMIJU, J.S.C.

TYPES OF CAVEATS IN ADMIRALTY PRACTICE – CLASSIFICATION AND PURPOSE:

“In our admiralty practice, there are three basic types of caveat which are: (a) Caveat against arrest which has the aim of preventing the arrest of a vessel or maritime property, (b) Caveat against release which has the sole aim of preventing the release of a vessel that has been arrested to enable the parties take necessary legal action, (c) Caveat against payment which has the purpose of preventing the payment of money out of Court.” – Per STEPHEN JONAH ADAH, J.S.C.