SEC 20 of THE ADMIRALTY JURISDICTION ACT (AJA) of 1991: AN IMPEDIMENT TO MARITIME ARBITRATION IN NIGERIA

maritime
INTRODUCTION
The maritime industry is one that is inherently rewarding but also manifestly challenging. This is because of its cross-border nature and the enormous risk involved particularly as it relates to loss of goods, lives, contracts of maritime insurance, ship building, ship acquisition, vessel charter, negligence of the crew members and many others. Consequently, disputes are inevitable and mechanisms must be put in place to settle them. The crux of this legal opinion is whether or not maritime arbitration is effective especially in relation to sec 20 of the Admiralty Jurisdiction Act (AJA).
The 1999 Constitution which is the nation’s grundnorm has conferred on the Federal High Court an exclusive jurisdiction to adjudicate all maritime disputes [sec 251(g) of the 1999 constitution]. This is even reinforced in sec 19 of the AJA. A look at the foregoing will raise the presumption that maritime disputes should be left to litigation only. However, should this be the best international practice especially as arbitration has come to stay permanently in other climes of the world?
The biggest challenge of maritime arbitration in Nigeria is the brutal fact that most shipping contracts such as bills of lading and charter parties in which Nigerians are parties are usually drafted by the foreign counterparts by way of stand form contracts. The nature of these forms of contracts is that the foreign parties dictate the terms, conditions and penalties. All the Nigerian party does is to play by the rules.  In line with the foregoing the foreign party usually thread the route of arbitration in the event of dispute and these arbitrations are usually referred to established institutions such as the London, Newyork, Singapore International Arbitration Centres and it is very logical to deduce that arbitrating in these centres will be extremely expensive for the Nigerian party.
The Nigerian Legislature in an attempt to solve the above stated dilemma enacted the Admiralty Jurisdiction Act. Our major focus is with regards to sec 20. The provision of sec 20 seeks to confer a mandatory jurisdiction on the Nigerian courts as regards admiralty disputes. Consequently, any choice of jurisdiction clause or arbitration clause couched in a manner that ousts the jurisdiction of the court is ignored. In fact, in the case of owners of MV Lupex v. Nigerian overseas chartering and shipping ltd and Onward Enterprises v. MV Matrix ltd, the court held that foreign arbitral clauses do not oust the jurisdiction of the Nigerian court. The foregoing decisions are a violation of the principle of comity and thus, the development of maritime arbitration in Nigeria is threatened much to the detriment of the Nigerian party. Hence, a review of sec 20 is required in other to enhance international relations between Nigeria and other countries as well as the business relationships of Nigerians and foreigners. Furthermore, a review will also facilitate the growth of maritime arbitration in Nigeria and consequently serve as a catalyst for the growth of the Nigerian economy.
 Chinecherem Ubaka
Legal Practitioner.

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