Various Remedies for Breach of Maritime Contracts Under Nigerian Law

 Types of Maritime Contracts in Nigeria

Before examining the remedies available for breach of maritime contracts, it is important to understand the types of contracts commonly encountered in the maritime industry. These include:

• Charter-party Agreements:

Contracts between the shipowner and the charterer for the use of a vessel.

• Bills of Lading:

Documents that serve as receipts for goods and evidence of the contract of carriage.

• Freight Contracts:

 Agreements concerning the payment of freight charges for the transportation of goods.

• Marine Insurance Contracts:

Contracts covering the risks associated with the shipment of goods by sea.

Each of these contracts establishes distinct obligations, and their breach can give rise to different legal remedies.

 Legal Grounds for Breach of Maritime Contracts

A breach of a maritime contract occurs when one party fails to perform its contractual obligations or performs them inadequately. Common examples of breaches in the maritime sector include:

• Failure to deliver goods:

The shipper may fail to deliver the cargo at the agreed destination within the specified time.

• Unseaworthiness of vessels:

A shipowner may provide a vessel that is not fit for the intended voyage, leading to cargo damage.

• Non-payment of freight:

The charterer or shipper may fail to pay the agreed freight charges.

• Failure to insure goods:

 In cases where insurance is required, failure to secure adequate coverage can constitute a breach.

When such breaches occur, the injured party may seek remedies under Nigerian law.

Available Remedies for Breach of Maritime Contracts

The remedies available for breach of maritime contracts in Nigeria are generally similar to those in other areas of contract law but are shaped by the unique features of the maritime industry. These remedies include:

 (a) Damages

Damages are the most common remedy for breach of maritime contracts and are intended to compensate the injured party for losses suffered due to the breach. Under Nigerian law, damages can be categorized as:

• General Damages:

Awarded for losses that naturally flow from the breach of contract, such as the cost of repairing or replacing damaged goods.

• Special Damages:

Awarded for specific losses that are not automatic consequences of the breach but must be proven, such as lost profits due to delayed delivery.

• Consequential Damages:

These are awarded for indirect losses, such as loss of future business or reputation, that result from the breach.

To claim damages, the injured party must demonstrate that the breach directly caused the loss and that the loss was foreseeable at the time the contract was made.

(b) Specific Performance

Specific performance is an equitable remedy whereby a court orders the breaching party to fulfil its contractual obligations. This remedy is typically sought when monetary compensation would be inadequate, such as in cases where unique or irreplaceable goods are involved.

In Nigerian maritime law, specific performance may be ordered in cases where the shipowner is required to complete the voyage or where the charterer is required to pay outstanding freight. However, the courts are generally reluctant to grant this remedy in cases involving personal service contracts, such as crewing agreements.

(c) Injunctions

An injunction is a court order that either prohibits a party from doing something (prohibitory injunction) or compels a party to take a specific action (mandatory injunction). Injunctions may be granted in maritime contract disputes to prevent ongoing or future breaches.

For example, an injunction could be sought to prevent a shipowner from wrongfully selling or transferring ownership of a vessel subject to a charter-party agreement. Injunctions are discretionary remedies and are typically granted when there is a risk of irreparable harm that cannot be adequately compensated by damages.

 (d) Rescission

Rescission is the cancellation or annulment of a contract, returning the parties to their pre-contractual positions. In Nigerian maritime law, rescission may be granted if the breach is so fundamental that it goes to the root of the contract, such as where a vessel is found to be unseaworthy, or the cargo is not delivered at all.

Once the contract is rescinded, both parties are relieved of their contractual obligations, and any money paid under the contract must be refunded. It is important to note that rescission is not available if the contract has been substantially performed.

 (e) Repudiation

Repudiation occurs when one party demonstrates an intention to no longer be bound by the contract, either through words or actions. When repudiation occurs, the injured party can accept the repudiation and terminate the contract. This allows the injured party to claim damages for any losses suffered as a result of the breach.

In the maritime context, repudiation may occur if the shipowner refuses to continue with the voyage or the charterer refuses to load the cargo as agreed. By accepting the repudiation, the injured party is entitled to terminate the contract and seek compensation.

(f) Detention and Arrest of Ships

A unique remedy in maritime law is the right to detain or arrest a vessel in order to secure a claim for damages or unpaid freight. Under the Nigerian Admiralty Jurisdiction Act, a party to a maritime dispute can apply to a court for the arrest of a vessel as security for its claim. This remedy is particularly useful when the shipowner is a foreign party or there is a risk that the vessel will leave Nigerian waters before the dispute is resolved.

Once the vessel is arrested, it cannot leave port until the matter is settled or the owner provides adequate security for the claim.

Limitation of Liability

It is important to note that under Nigerian maritime law, the liability of shipowners and carriers may be limited by contractual terms, international conventions, and statutes such as the Carriage of Goods by Sea Act (COGSA). For example, many shipping contracts contain limitation clauses that cap the amount of damages payable in the event of a breach.

However, these limitation clauses may not be enforceable in cases of gross negligence, fraud, or wilful misconduct. Nigerian courts have also held that limitation clauses must be clearly worded and brought to the attention of the contracting party before they can be enforced.

Conclusion

The remedies for breach of maritime contracts under Nigerian law are designed to provide aggrieved parties with options to recover their losses and enforce their rights. Whether through damages, specific performance, or the arrest of a vessel, Nigerian courts provide a robust legal framework for addressing breaches in the maritime sector. However, parties must carefully navigate the complexities of maritime law and seek legal advice to ensure that they are adequately protected in the event of a breach.

Contact Us

For premier Understanding of Remedies of Breach of Maritime Contract, contact Chaman Law Firm today. Our offices are conveniently located in Lagos, FCT Abuja, Ogun State, and the UK. We are readily available to assist you with your legal needs. Whether you require consultation, representation, or ongoing legal support, Chaman Law Firm is your trusted partner in navigating Maritime law in Nigeria.

Call us at 08065553671 or email us at info@chamanlawfirm.com to schedule a consultation.

1. Charter Parties
2. Bill of Lading Contracts
3. Freight Agreements
4. Shipbuilding Contracts
5. Marine Insurance Contracts
6. Cargo Handling Contracts

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