MONDINVEST LIMITED v. DREDGING ENVIRONMENTAL AND MARINE NV (2018)

MONDINVEST LIMITED v. DREDGING ENVIRONMENTAL AND MARINE NV

(2018)LCN/11763(CA)

In The Court of Appeal of Nigeria

On Monday, the 25th day of June, 2018

CA/L/531/2016

RATIO

CONCEPT OF LIMITATION OF LIABILITY

The concept of limitation of liability is simple. It is that a ship owner or some other person connected to the operation of a ship is entitled to limit his liability in respect of certain maritime claims arising out of an occurrence to a particular amount, irrespective of the total amount of such claims. The rationale usually cited in English case law and commentaries for the right to limit liability is the public policy in encouraging shipping trade. This is said to override the competing public policy in compensating the victims of wrongdoing in full.
The issue of limiting liability is not just a common law or custom of maritime claims, our jurisprudence has also provided for it by the Merchant Shipping Act, 2007. Section 351 provides for persons entitled to limitation of liability, it provides thus:
351 (1) In this part of this Act, the Ship owners and salvors, as defined in Subsection (2) of this section may limit their liability as provided in this part of this act.
(3) If any claims set out in Section 353 of this Act are made against any person for whose act neglect or default the ship owner or salvor is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this part of this Act.
It is therefore statutorily provided for a ship owner against whom there is a certain claim to limit his liability. per YARGATA BYENCHIT NIMPAR, J.C.A

CLAIMS OF LIMITATION OF LIABILITY AS PROVIDED BY THE MERCHANT SHIPPING ACT

Not all maritime claims can enjoy limitation of liability, the claims subject to limitation of liability are listed in Section 352 of the Merchant Shipping Act and it provides thus:
Subject to Sections 354 and 355 of this Act, the following claims, whatever the basis of liability may be, shall be subject to limitation of liability-
(a) Claims in respect of loss of life or personal injury or loss or damage to property (including damage to harbor works, basis and waterways and aids to navigation), occurring on board or in direct connection with the operation of the ship or with salvage operations, and consequential loss resulting therefrom;
(b) Claims in respect of loss resulting from delay in the carriage by sea of cargo, passengers of their luggage;
(c) Claims in respect of other loss resulting from infringement of rights other than contractual rights, occurring in direct connection with the operation of the ship or salvage operations;
(d) Claims in respect of removal, destruction or rendering harmless of the cargo of the ship;
(e) Claims of a person other than the person liable in respect of measures taken in order to avert or minimize loss for which the person may limit his liability in accordance with this part of the act, and further loss caused by such measures; claims in respect of floating platforms constructed for the purpose of exploring or exploiting the natural resources of the sea-bed or the subsoil thereof;
(f) Claims in respect of the raising, removal, destruction or the rendering of a ship which sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship. per YARGATA BYENCHIT NIMPAR, J.C.A

JUSTICES

MOHAMMED LAWAL GARBA Justice of The Court of Appeal of Nigeria

JOSEPH SHAGBAOR IKYEGH Justice of The Court of Appeal of Nigeria

YARGATA BYENCHIT NIMPAR Justice of The Court of Appeal of Nigeria

Between

MONDINVEST LIMITED Appellant(s)

AND

DREGING ENVIRONMENTAL AND MARINE NV (OWNERS OF THE MV “BREUGHEL”, SISTER VESSEL TO THE MV “Congo River”) Respondent(s)

YARGATA BYENCHIT NIMPAR, J.C.A. (Delivering the Leading Judgment):

This appeal is predicated on a judgment of the Federal High Court delivered on the 16th day of February, 2016 by HON. JUSTICE BUBA in suit No: FHC/L/CS/1611/2015 wherein the Court limited the liability of the Respondent. Dissatisfied with the decision of the Court, the Appellant filed an amended Notice of Appeal on the 15th June, 2016 setting out 5 grounds of appeal.

The Appellant commenced an admiralty action in rem against the vessel M.V BREUGHEL and sister vessel, the M.V CONGO RIVER before the Federal High Court, Lagos seeking various reliefs which are principally damages for the damage done to its property including the sum of N700million and N3 billion general damages.

By the nature of the action, the vessel was arrested and detained until a bank guarantee in the sum of N3.7 billion was posted for her release while the matter was set down for determining the liability of the vessel on the merit in SUIT NO: FHC/L/CS/1329/2015. The Respondents immediately by an originating summons commenced Suit No. FHC/L/CS/1611/2015 seeking to limit its liability as owners of the offending vessels under Section 351 of the Nigerian Merchant Shipping Act 2007. The originating summons was opposed and upon determination, the Court below granted the relief sought by the Respondents and limited the liability of the Respondent and ordered the creation of a limitation fund in favour of the Respondent for alleged damage caused the Appellant s property and parties unknown to the Court for the project and capped the amount to $5,251,926.23 (Five Million Two Hundred and Fifty one Thousand, Nine Hundred and Twenty six Dollars and Twenty Three cents) or its naira equivalent. The Appellant felt aggrieved thus this appeal.

The Appellant s brief settled by Anthony Nkadi dated and filed on the 23rd May, 2017 set out 5 issues for determination as follows:
i. Whether the learned Judge erred in law by ordering the limitation of liability for the Respondent who did not provide any evidence of the sea worthiness of one of the two offending vessels The MV Congo River having regards to the facts and circumstances of this case.
ii. Whether the learned trial judge erred in law by ordering the limitation of liability for the Respondent who was engaged in unlawful, and illegal activities which caused and continue to cause damage to the Appellant s property.
iii. Whether the learned trial judge erred in holding that the Appellant had failed to prove/show the link of causation of the damage to its property from the unlawful acts and commissions of the respondent (by not having any lawful authorization to operate) or that the Respondent and its agents acted negligently with the intent or recklessly with knowledge that such loss would probably result to the Appellant s property as required under Section 355 of the Merchant Shipping Act 2007
iv. Whether the learned trial judge was correct in handling a carte blanche limitation of liability cover to the Respondent by extending the limitation of liability of the Respondent to all present and future negligent acts or omissions of the Respondent for the entire duration of the Eko Atlantic project
v. Whether the learned trial Judge erred in law when he held that the MV BREGHEL being a Dredger was exempted from the requirements of compulsory pilotage (notwithstanding that it was not operating within the ports precincts) contrary to the provisions of the Section 42 (3) (f) of the Nigerian Ports Authority Act

The Respondent on its part formulated 3 issues for determination thus:
a. Whether the learned trial judge was right in holding that the Respondents was entitled to limit its liability as the Appellant had failed to prove existence of the conditions specified in Section 354 of the Merchant Shipping Act 2007
b. Whether the learned trial judge was correct in its decision that the Respondent was entitled to limit its liability for losses or damage arising from the Respondent s dredging works in furtherance of the Eko Atlantic City which is still ongoing
c. Whether the learned trial judge was correct in holding that the M.V. Breughel being a dredger from the requirements

I have considered the Notice of Appeal, the Record of appeal and the briefs of parties in this appeal and I have resolved to adopt the 3 issues formulated by the Respondent which cover all the 5 issues distilled by the Appellant for a complete resolution of all areas of complaint in the said judgment.

They shall be considered all at once to avoid repetition because the issues are inter related.

ARGUMENTS
It was submitted on behalf of the Appellant that the learned trial Judge was wrong in ordering the limitation of liability of the Respondent because it did not provide any evidence of the sea worthiness of The MV Congo River required before the Respondent can be entitled to limit the liability of the vessel, referred to Sections 352 358 of the Merchant Shipping Act 2007. The Appellant submitted that under the extant Merchant Shipping Act, the limit of liability will be broken where the ship owner fails to discharge the burden that the damage was not as a result of his act or omission, it referred to Channell J in McFadden v Blue Star Line (1905) 1 KB 697 and The Derby (1985) 2 Lloyds Rep 325. Further, the Appellant submitted that the Respondent herein did not seek and or obtain the relevant permits and authorizations from the Nigerian governmental departments and agencies prior to and or before the commencement of phases 2, 3, 4, 5 and 6 in the dredging and reclamation works in relation to the Eko Atlantic project, which it was contracted to undertake and consequently, it will not be allowed to limit its liability as the fault will be directly attributable to it, referred to SHIPCARE NIG. LTD. V. OWNERS OF THE MV FORTUNATO (2011) 7 NWLR 205 and THE DERBY (1985) 2 LLOYDS. REP 325. Also, the Appellant submitted that upon failure of the Respondent to provide the Court with any documentation for the primary offending vessel, i.e. the CONGO RIVER , the onus then shifted to the Respondent to rebut such evidence which it failed to do and as such its application must also fail, cited INSURANCE BROKERS OF NIGERIA V. ATLANTIC ILES MANUFACTURING COMPANY LTD. (1996) 8 NWLR (PT. 466) 316 AT 318 AND VULCAN GASES LTD. V. GESELLSCHAFT F. INDUSTRIES (2001) 9 NWLR (PT. 719) 610 AT 667.

On issue two, it was submitted that the trial judge erred in ordering the limitation of liability for the Respondent who admitted that it was engaged in illegal and unlawful activities in Nigeria. It contended that a Court of law cannot be seen to be condoning illegality and rewarding criminal activities. Further, the Appellant submitted that the above findings of the trial Court are perverse because it took into account matters which he ought not to have, referred to ATOLAGBE V. SHORUN (1985) NWLR (PT. 2) 360; UKATTA V. NDUNAZE (1997) 4 NWLR (PT. 499) 257 AT 276; NDILI V. AKINSUMADE (2000) 8 NWLR (PT. 668) 39; EGBA V. APPAH (2005) 20 NWLR (PT. 934) 464 as well as Section 122(2) of the Evidence Act 2011. In addition to the above, the Appellant submitted that the Respondent herein misrepresented on oath to the trial Court by stating that it had procured all the permits and licences required for its activities in Nigeria in a bid to hoodwink and deceive the trial Court into coming to an unmerited finding. It further argued that the Court ought not to have permitted the Respondent (in the middle of the proceedings) to turn around and admit that it does not have any permit but that however these permits were supposed to be procured by its contracting partner.

The Appellant argued that the reasoning of the trial Court is perverse and is not in line with the law because it failed to take cognizance of the laws or enactments of the country including subsidiary legislation and that the decision be set aside. According to the Appellant, there was thus no basis for the Court to come to a finding that the permits complained about could be obtained at any time. It therefore argued that where a party does not seek for such approvals or conduct such mandatory environmental impact assessment of its proposed task, it literally undertakes such a task in total disregard of limits imposed by laws and regulations and operates without provision for the impact of its activities on the public and as such, the Courts cannot grant such a party a discretionary or equitable relief, cited the case of ABIMBOLA GEORGE AND ORS V. DOMINION FLOUR MILLS LTD (1963) 1 ALL N.L.R 71 in support. The Appellant submitted that the Respondent failed to seek and obtain a cabotage or ministerial waiver certificate prior to the commencement of the dredging activities of the MV CONGO RIVER for phase 2 of the Eko Atlantic project in 2012, it urged this Court to draw necessary inferences from the facts and evidence before the Court to find that the Appellant at the trial court established the link between the Respondent s illegality and damage done to Appellant s property, referred to OKPIRI V. JONAH (1961) 1 SCNLR 174; (1961) ALL NLR 102 AT 104, 105; LAWAL V. DAWODU (1972) 8-9 SC 83 @ 114 – 151; BALOGUN V. AGBOOLA (1974) 10 SC 111-112 AND FELIX OKOLI EZEONWU V. CHARLES ONYECHI & ORS. (1996) 3 NWLR (PT. 438) 499 @ 526.

On issue three, the Appellant s argument under this issue is that the Respondent acted negligently with intent to cause damage or recklessly with knowledge that their unlawful and illegal activities could probably (or likely) cause damage to the Appellant s property, it referred to Section 355 of the Merchant Shipping Act 2007 and the following cases;AGBONMAGBE BANK LTD V. C. F. A. O (1966) 1 ALL NLR 140; OYIDIOBU V. OKECHUKWU (1972) 5 SC 191, ORHUE V. NEPA (1998) 9 NWLR (PT. 557) 187, KALLA V. JARMAKANS TRANSPORT LTD (1961) ALL NLR 747; NGILARI V. MOTHERCART LTD (1999) 13 NWLR (PT. 636) 626, KOYA V. U.B.A (1997) 1 NWLR (PT 481) 251. The Appellant argued that there was statutory evidence of a duty of care on the part of the Respondent and there was also documentary proof and admission of the breach of the said duty as the Respondent was at the very least negligent or careless in dredging without lawful permits and licences. It urged that the lower Court s finding to the contrary be overturned, referred to ANYAH V. IMO CONCORDE HOTELS LTD. (2002) 18 NWLR (PT.799) 377. In addition, the Appellant submitted that there was ample evidence by the facts before the Court that the Respondent at the very least was reckless and that from their conduct there was no way they should not have known that their actions could probably (possibly) or likely cause damage to another.

The Appellant further argued that the Respondent cannot run away from its liability in obtaining permits and pass the buck to its contracting party and partner because as an independent contractor, it is personally liable for its own actions even though the work was for the benefit of a third party, referred to A.C.B. LIMITED V APUGO (1995) 6 NWLR (399) 65 AT 83, ALBERT E REED & CO. V. LONDON & ROCHESTER TRADING CO. LTD. [1954] 2 LLOYD’S REP. 463, ROLLS-ROYCE PLC V HEAVYLIFT-VOLGA DNEPER LTD [2000] 1 ALL E.R. (COMM) 796, SHAWINIGAN LTD V VOKINS & CO LTD [1961] 3 ALL ER 396. The Appellant also relied on The London Convention on Limitation of Liability for Maritime Claims, 1976 (as amended by Protocol of 1996 to back up its arguments and called on this Court to decide issue in its favour in view of the dearth of Nigerian case law on this point.

Under issue 4, the Appellant submitted that the learned trial judge was wrong to have extended the limitation of liability of the Respondent to all present and future negligent acts or omissions of the Respondent for the entire duration of the Eko Atlantic project because limitation of liability does not apply to future or anticipated damage that the Applicant may be involved in. It referred to Sections 352 (1) (a-g) and Sections 253 of the Merchant Shipping Act in arguing that the words or provisions of the statute are clear and unambiguous and should be given their literal interpretation, also referred to the cases of OMOIJAHE V. UMORU & ORS. (1999) 5 SCNJ 280, IBRAHIM V. OJOMO & 3 ORS (2004) 4 NWLR (PT. 862) 89, CITY ENGINEERING (NIG.) LTD V. NIGERIAN AIRPORT AUTHORITY (1999) 9 SCNJ 263, HON. JUSTICE E.Q. ARAKA V. HON. JUSTICE DON EGBUE (2003) 7 SCNJ. 114, VICTOR NDOMA-EGBA V. CHUKWUOGOR & 3 ORS (2004) 6 NWLR (PT.869) 382 and NDIC V. OKEM ENTERPRISES LTD. & ANOR. (2004)10 NWLR (PT. 880) 107 @ 196 in support.

Finally, with respect to issue 5, the Appellant submitted that there was uncontroverted evidence and admissions before the Court that the dredger vessel MV BRUGHEL was conducting its activities at Kuramo Waters in furtherance of the Eko Atlantic project and not at the port and that since a dredger operating outside the limits of a port is not exempt from compulsory pilotage, the trial Court came to a wrong decision. The Appellant submitted that the intention of the legislature in the statute was not clearly interpreted by the trial Court, referred to AGRO ALLIED ENT. LTD. V. MV NORTHERN REEFER & 2 OTHERS (2009) 5-6 S.C. (PT 1)110 @ 122 and that the provisions of Section 42(3) of the NPA Act must be interpreted as a whole section in order to achieve harmony of the entire section, referred to AKAIGHE V. IDAMA (1964) ALL NLR (REPRINT) 317 @ 322 and MBANI V BOSI (2006) 11 NWLR (PART 991) 400 @ P. 21. It urged the Court to set aside the judgment of the trial Court and find in its place, a refusal of the Respondent s right to limit liability.

It was submitted on behalf of the Respondent that from a community reading of Sections 351(2)(a),352(1) and 354 of the MSA, an application for limitation of liability is automatic if no conduct(s) barring limitation are proved. According to the Respondent, Section 354 of the Merchant Shipping Act, 2007 which is basically a reproduction of Article 4 of the 1976 Convention on Limitation of Liability for Maritime Claims (the 1976 Limitation Convention), provides for the instances where an Applicant will not be entitled to a decree of limitation of liability and none of these conditions were met. It urged this Court to interpret the use of the word shall in Section 352(1) of the MSA in a mandatory sense, citing the cases of TUKUR V. GOVT OF GONGOLA STATE (1989) 4 NWLR (PT.117) 517 AT 579, AGIP NIG. LTD V. AGIP INT. & ORS. (2010) 5 NWLR (PT. 1187) 348 AT 386-387, NIGERIA L.N.G. LTD. V. AFRICAN DEV. INS. CO. LTD. (1995) 8 NWLR (PT. 416) 677 and KALIEL V. ALIERO (1999) 4 NWLR (PT. 597) 139 in support.

The Respondent further argued that since the Appellant s claim in Suit Number FHC/L/1329/2015 is in direct connection with operation of the Respondent s ships, it falls within Section 352(1)(a) of the MSA and is therefore subject to limitation of liability. With respect to proof, the Respondent argued that where there is no proof of conduct barring limitation as in this case, the shipowner s liability must be limited, referred to Section 63 of the Companies and Allied Matters Act (CAMA) as well as the cases of AVOP PLC V. A.-G., ENUGU STATE (2000) 7 NWLR (PT. 664) 260 AT 275, YALAJU AMAYE V A.R.E.C LIMITED (1990) 4 NWLR (PT. 145) 422 AT 451, LENNARD S CARRYING CO. V. ASIATIC PETROLEUM CO. (1914 -15) ALL ER REP 280 AT 283, BOLTON HL(ENGINEERING) CO LTD V. GRAHAM TJ & SONS LTD (1957) 1 QB 159, ISHOLA V. S.G.B (NIG.) LIMITED (1997) 2 NWLR (PT.488) 405 and ANYAEBOSI V. R.T BRISCOE (NIG.) LTD (1987) 3 NWLR (PT. 59) 84.

It argued that contrary to the submissions of the Appellant, the burden of proof lies with the opposing party who is the party seeking to strip the shipowner of the right to limit and claim full damages for the alleged loss or damage, referred to Section 131 (2) and 132 of the Evidence Act relying on the cases of BUHARI V. OBASANJO (2005) 50 WRN 1; KALU V. FRN (2014) 1 NWLR (PT. 1389) 479; AD V. FAYOSE (2005) 10 NWLR (PT.932) 151; OKUNDAYE V. OYEGUN (1999) 4 NWLR (PT. 598) 207, MOTANYA V. ELINWA (1994) 7 NWLR (PT. 356) 252, MSC ROSA M (2000) 2 LLOYD S REP 399 AT 403, BOWBELLE (1990) 1 LLOYD S REP. 532, CAPITAN SAN LUIS (1993) 2 LLOYD S REP. 573, BREYDON MERCHANT (1992) 1 LLOYD S REP. 373. The Respondent argued that the onus of proof under Section 354 of the MSA requires that the Appellant not only identifies the person who committed the act or omission but also specify whether the person is the alter ego of the Respondent or its servant or agent but this condition was not met, referred to NBCI V. INT. GAS (NIG.) LTD (1999) 8 NWLR (PT. 613) 119 CA AT 129 D E; DELTA STEEL (NIG.) LTD. V. A.C T INCORPORATED (1999) 4 NWLR (PT. 597) 53 AT 66, PHARMACEUTICAL CO LTD V QUANTAS AIRWAYS LTD. (1991) 1 LLOYD S REP. 288 AT 291, MSC ROSA M (2000) 2 LLOYD S REP. 399 AT 401, NUGENT V. MICHAEL GOSS AVIATION LTD. (2000) 2 LLOYD S REP. 222.

The Respondent submitted that the Congo River was seaworthy in all respects, that the Appellant failed to prove otherwise and that in any case, the unseaworthiness of a vessel is not ipso facto conclusive proof of conduct barring limitation, referred to NARUMAL & SONS LIMITED V. N.B.T.C LIMITED (1989) 2 NWLR (PT.106) 730 @ 758. With respect to permit and approval, the Respondent argued that an alleged failure to obtain permits and approvals cannot be the personal act or omission of a person who had no duty to obtain them in the first place. The Respondent therefore submitted on this issue that the learned trial judge was right in holding that the Respondent was entitled to limit its liability as the Appellant had failed to prove existence of the conditions specified in Section 354 of the Merchant Shipping Act 2007.

With respect to issue two, the Respondent submitted that the dredging works being undertaken by the Respondent in furtherance of the Eko Atlantic City project and is a continuing act spanning a number of years and as such the learned trial judge was right in determining that the Respondent was entitled to limit its liability for losses or damage arising from the Respondent s dredging works in furtherance of the Eko Atlantic City which is still ongoing. It argued that damages may arise as a result of singular acts as well as continuing acts and that it would be unjust and unreasonable for the limitation of liability to relate only to alleged damages. It also submitted that in determining the scope of application of limitation of liability, the nature of the act or omission which caused the alleged damage must be taken into consideration and where the act is a continuing one like dredging, the determination must apply to the whole process, referred to Section 9(1) of the Admiralty Jurisdiction Act (AJA) and the case of TUKUR V. GOVT OF GONGOLA STATE (1989) 4 NWLR (PT.117) 517. The Respondent thereafter submitted that the Appellant is indulging in needless speculation as no other claim for damages has been brought against it, and therefore urged this Court not to be engaged in speculative claims or arguments. It referred to the following cases in support; INTRA MOTORS (NIG.) PLC V. AKINLOYE (2001) 6 NWLR (PT. 708) 61, CHINWEZE V. MASI (1989) 1 NWLR (PT. 97) 254 @ 267; OVERSEAS CONSTRUCTION CO. (NIG.) LTD. V. CREEK ENTERPRISES (NIG) LTD. (1985) 3 NWLR (PT. 13) 407; IHEWUEZI V. EKEANYA (1989) 1 NWLR (PT. 96) 239, NNPC V. IDONIBOYE-OBU (1996) 1 NWLR (PT. 427) 655 AT 672, IKENTA BEST (NIG.) LIMITED V. A.-G., RIVERS STATE (2008) 6 NWLR (PT. 1084) 612 @ 653 and BAMGBEGBIN V. ORIARE (2009) 13 NWLR (PT. 1158) 370 @396.

With respect to the Respondent s issue 3, the Respondent submitted that based on Section 42(3)(f) of the Nigeria Ports Authority Act, the learned trial Judge was correct when he held that the M.V Breughel was exempted from compulsory pilotage. It also referred to Order 2 of the Ports (Declaration of Port Limits) Order and went on to submit that based on the definition of ports limits therein, the Congo River and the Breughel area of operation falls within the limits of a port and are therefore exempted ships within the meaning of Section 42(3)(f) the NPA Act. The Respondent also referred this Court to Section 2 of the Nigeria Ports Authority (Pilotage Districts) Order (Legal Notice 252 of 1959) and submitted that assuming the Respondent s vessels are not exempted under Section 42(3)(f) of the NPA Act, the Appellant did not prove before the trial Court that the vessels were operating within the compulsory pilotage area in the Lagos port limits without a licensed pilot. The Respondent therefore urged the Court to resolve the appeal in its favour and dismiss the appeal in its entirety.

RESOLUTION
The Court below reviewed extensively statutory provisions and treatise by different authors on background reasons as to why and how a ship owner can limit liability in a claim against it. Limiting liability is simply explained by Nigel Meeson and John Kimbell, Admiralty Jurisdiction and Practice, 4th Edition, Informa, London, 2011 at pages 283 in the following words:
The concept of limitation of liability is simple. It is that a ship owner or some other person connected to the operation of a ship is entitled to limit his liability in respect of certain maritime claims arising out of an occurrence to a particular amount, irrespective of the total amount of such claims. The rationale usually cited in English case law and commentaries for the right to limit liability is the public policy in encouraging shipping trade. This is said to override the competing public policy in compensating the victims of wrongdoing in full.
The issue of limiting liability is not just a common law or custom of maritime claims, our jurisprudence has also provided for it by the Merchant Shipping Act, 2007. Section 351 provides for persons entitled to limitation of liability, it provides thus:
351 (1) In this part of this Act, the Ship owners and salvors, as defined in Subsection (2) of this section may limit their liability as provided in this part of this act.
(3) If any claims set out in Section 353 of this Act are made against any person for whose act neglect or default the ship owner or salvor is responsible, such person shall be entitled to avail himself of the limitation of liability provided for in this part of this Act.
It is therefore statutorily provided for a ship owner against whom there is a certain claim to limit his liability.

Obviously the claim filed by the Appellant in Suit Number FHC/L/1329/2015 comes under claims that liability can be limited. The Respondent in its suit sought for the following orders:
i. A declaration that the Plaintiff is entitled to limit its liability (if any) in respect of any and all loss or damage whatsoever, including but not limited to property or any loss arising from the dredging of the Lagos Shoreline in furtherance of the Eko Atlantic project (the Dredging ).
ii. A declaration that the tonnage of M.V. BRUEGHEL for the purpose of this limitation Action is 11,136 tonnes and a decree that the liability in respect of any and all claims arising out of or in relation to the Dreedging of the Plaintiff is limited to USD5,251,926.23(Five Million, Two Hundred and Fifty one Thousand, nine hundred and twenty six dollars and twenty three cents) or its Naira equivalent and no more.
iii. An order that upon the Plaintiff providing a bank guarantee in the said sum of USD5,251,926.23 (Five Million, two hundred and fifty one thousand, nine hundred and twenty six dollars and twenty three cents) or its naira equivalent, all further proceedings in any action or arbitration arising out of the said dredging of the Lagos Shoreline in furtherance of the Eko Atlantic City Project be stayed except for the purpose of taxation and payment of costs and that the above named defendants, and all or any other persons whatsoever interested in the vessel M.V. BRUEGHEL or other things on board, or any of its sister ships or having any right, title, or interest whatsoever with reference to , or arising out of, the said Dredging, be restrained from bringing any action or actions against the Plaintiff or the vessel M.V. BRUEGHEL or any of its sister Ships in respect of same, in any other Court other than the Federal High Court of Nigeria which shall be subject always to limitation of liability as set out herein.
iv. That all proper directions may be given by the Court for ascertaining the persons who have any just claim for loss or damage arising out of or caused by the Dredging.
v. That the above sum may be ratably distributed among the several person who may take out their claims thereto and that the proper directions may be given for the extension of such claimants as shall fall in their claims within a certain time to be fixed for such purpose.

The Court below granted the reliefs and made certain orders namely-
a. That the Plaintiff shall advertise within 3 months which any person who claims to have a maritime claim against the applicant in respect of which the applicant s liability is determined may be Pursuant to Order 15 Rule 3(a) and (b) (i) and (ii) of the Admiralty Procedure Rules.
b. An order is hereby made for the limitation fund aforesaid to be constituted from the amount determined above (ii).
c. That the above sum may be ratably distributed among the several person (sic) who may take out their claims thereto and that the proper directions may be given for the extension of such claimants as shall fail in their claims within a certain time to be fixed for such purpose.

The contention of the Appellant is that though the law allows for limitation of liability, the Respondent herein did not qualify to enjoy the legal window allowed to limit its liability to claims against it.

The main reason advanced is that the vessels lack relevant and up to date papers to operate in Nigerian waters. The Appellant dwelt so much on the alleged lack of papers and documents. The Court below over ruled that objection.

The Act has provided for when a claimant can be disqualified from limiting his liability, see Section 354 of the Merchant Shipping Act, 2007 and it provides as follows:
A person liable shall not be entitled to limitation of liability if it is proved that the loss or damage resulted from his personal act or omission of his servants or agents acting within the scope of their employments committed with the intent to cause such loss or damage or recklessly and with their knowledge that such loss or damage or recklessly and with knowledge that such loss would probably result.
It is obvious that it is only the party challenging the limitation action taken by a ship owner that has the burden of proving that one of the conditions stipulated in Section 354 exists to bar the ship owner from getting a limitation of liability order. The Appellant listed several infractions that should have worked against the Respondent, these are:
i. That the loss did not arise from the Ship owner s personal act or omission.
ii. That the loss or damage did not result from the acts or omission of the ship owners servants or agents acting within the scope of their employment committed with the intent to cause such loss or damage; or recklessly and with knowledge that such loss would probably result.

It is the opinion of the Appellant in the summarized arguments that the burden placed on the ship owner is more stringent in view of the 2 conditions listed above. I disagree with the Appellant that the ship owner must establish that it is not caught by the 2 conditions in its claim and agree with the Court below that since the Appellant opines that the 2 conditions exist, it is duty bound to establish them in order to convince the Court that the ship owner is not entitled to the indulgence of limiting his liability, more so the claim of the Appellant in the main action before another Court is not that the damage was caused due to lack of relevant papers for the vessels called relevant papers or has expired papers. The Court below was therefore right in its findings when it held thus:
Perhaps more importantly, the Defendant has not established any causal link between failure to secure permits, licenses and approvals and the alleged loss. It remains in clear how a failure to obtain permits licenses and approvals would have caused the loss in any event. There is no evidence before the Court that the permits would not have been given as a matter of course and/or retrospectively if required, or therefore that these particular failures caused the loss. On this basis, this unwarranted attempt to bar the right of the Plaintiff must fail.
The suit by the Respondent leading to this appeal was premised on the claim instituted by the Appellant and the law says it can limit its liability. With a clear stipulation on when limitation shall not be available to a party, any party contending another party cannot limit liability must establish the existence of either of the two conditions listed above. More so, the Appellant s suit in the sister case was not hinged or connected to the alleged infractions or situations named in Section 354 of the Act.

The Appellant submitted that the findings of the Court below were perverse because it did not take cognizance of the inability of the Respondent to exhibit their licenses and permits including Environmental Impact Assessment Certificate. In as much as I agree that the Respondent should possess valid licences and permits, the excuse given that it is an agent of a disclosed principal is a lame excuse and untenable. To possess valid permits and licenses would mean the vessel is fit for the purpose and in that sense, the point being made by the Appellant is valid but for its failure to provide the nexus and evidence between valid licenses and the causal of the damage. The Court below found that loss or damage did not result from the ship owner s personal act or omission. Secondly, that the loss or damage did not result from acts of his servants acting within the scope of their employment committed with intent to cause such loss or damage or recklessly and with knowledge that such loss would probably result. To prove either of the two conditions requires evidence which is lacking in this instance. Failure to provide certificates and permits alone cannot prove the onerous duty imposed by the law to deny a ship owner limiting his liability.

There is need for evidence to prove that the vessels are not sea worthy. The examples of unseaworthiness of a vessel given by the Appellant are stated thus:
i. An incompetent crew
ii. A crew which is insufficiently instructed or insufficient in numbers
iii. Out of date charts
iv. Insufficient bunkers for the voyage (depends on type of charter party)
v. Stowage which affects safety of the ship
vi. Deficient systems ashore or on board
vii. The absence of documentation required by law (including local laws for the satisfactory prosecution of the contemplated voyage e.g. a derating certificate.

Appellant s reliance on the case of SHIPCARE NIG LTD V OWNERS OF THE MV FORTUNATO supra is inappropriate because of the nature of damage and how it arose is quite different and in that case the competence of the crew was in issue unlike in the claim of the appellant which the alleged damage arose out of dredging activities in which had resultant effect on the coastline and damage to his property.

On Appellant s issue two, the contention is that the Respondent was on illegal operations for want of relevant licenses, permit and an Environmental Impact Assessment Report. It was made out even in the judgment appealed against that licenses, permit were to be procured by the employer since the Respondent was engaged to dredge for Eko Atlantic Project which has Lagos State government partnership. The Court below explained it away in the con of agent of a disclosed principal and therefore, the Respondent is not liable. Here I disagree with the Court below and align partially with the Appellant. The relationship between the Respondent is purely contractual and not a mere or simple agent of a disclosed principal case. Nigerian laws are flouted and it cannot be excused by their claim of being agents of a disclosed principal. It is the duty of the Respondents to be in possession of all relevant permits before commencing the project. Respondents were engaged pursuant to a contract, it is a contractual relationship for profit. It is not a servant master relationship but engaged to carry out the job without instructions on day to day duties from the Appellant so there is no agency in this situation, see A.C.B. LIMITED V APUGO (1995) 6 NWLR (Pt. 399) 65 at 83 which held thus:

An independent contractor is one who undertakes to produce a given result, but so that in the actual execution of the work he is not under the order or control of the person from whom he does it and may use him own discretion in things not specified before hand. The test of the distinction between an agent and an independent contractor is the existence of a right of control over an agent in respect of the manner in which his duty is to be done. A servant is an agent who works under the supervision and direction of his employer but independent contractor is one who is his own master.
It is also settled that an agent can be liable even when there is a disclosed principal, see BRONWEN ENERGY TRADING LIMITED V OAN OVERSEAS AGENECY NIGERIA (2014) LPELR-24111(CA) and THE M.V. CAROLINE MAERSK & ORS V NOKOY INVESTMENT LTD (2002) LPELR- 3182 (SC).

Furthermore, the approval the Respondent attached to its affidavit was for project one while they are engaged to dredge for project 2 and 3. So the approval was spent, the project having gone to stage 2 and 3. The M.V Congo River was handling Phase 2 while M.V. Brueghel was for Phase 3, 4, 5 and 6 going by Exhibit NA2 (the copy of the master plan for Eko Atlantic Project). In no way should the Court stamp and give legitimacy to illegal activities in the name of a profitable project. I therefore agree with the Appellant that this aspect of the judgment is perverse since there was evidence that the Respondent should have in its possession valid permits, licenses and Environmental Impact assessment report before going into the dredging, more so, no scope of work has disclosed, no methodology for the dredging was presented. This is contrary to the position of the Respondent in presenting the action for limitation of liability, wherein it averred that all relevant permits were secured when in fact they had none (see paragraph 8 of the affidavit supporting the Originating summons). It is on record that the Respondent later admitted that the necessary permits were not obtained. An Environmental Impact assessment report before commencement of dredging is a requirement of law, see the Environmental Impact Assessment Act, 1992 and National Environmental (Coastal and Marine Area Protection) Regulations No.18 of 2011. This is clear impunity on the part of the Respondent to neglect or refused to procure valid permits, licences and approvals before commencing dredging close to the coastline which would definitely affect the natural shoreline in that area with far reaching effects. To say because Lagos State government is involved, therefore the Respondent did no wrong is perverse. The Respondent couldn’t have done that in other climes. They are bound to have valid permits, licenses and reports in the course of the dredging.
Part of the requirements for the dredgers as contended by the Appellant is that M.V. Brueghel should have pilotage or an exemption under Section 42(3) of the Nigeria Ports Authority (NPA) Act. The said section requires that certain ships operating within the ports district must be under pilotage except those exempted and as listed therein. The Court found that the Respondent was operating within a port district but was exempted and therefore not required to be under pilotage. The dredgers exempted under Section 42(3)(f) of the NPA Act are:
(3) for the purposes of Subsection (1) of this section, the following ships are excepted ships

(f) tugs, dredgers, barges, or similar vessels, the ordinary course of navigation of which does not extend beyond the limits of a port.
The Court rightly found that M.V. Breughel is operating within the precincts of a port and being a dredger and its ordinary course of navigation is by Kuramo waters, it is not beyond the limits of the port, it is exempted from under pilotage. That is the essence of the statutory provision, the vessel is undisputedly a dredger and is within a port district and therefore does not have to be under pilotage. And if the vessel was operating outside a port district, then the limits of the port district must be established by evidence. There is no such evidence in the record that Kuramo water is outside the Port district. The ordinary course of a dredger is for the dredger to be within the area of its operation so M.V. Breughel was in the ordinary course of its navigation at Kuramo waters. That finding is not perverse.

The Court below cannot be faulted on its interpretation of Section 354 of the Merchant Shipping Act that the burden to prove that the ship owner is not entitled to limit his liability based on the two grounds is on the person alleging the existence of the two grounds. Section 136 of the Evidence Act also places the burden of proof on he who asserts the positive. The requirement here is proof that the damage was from his personal act or omission or that of his staff intent. The Appellant asserts that the omission of the ship owner with regards to omissions to get relevant permits and licenses and renewed papers are proof of intent and that should disentitle him to the limitation of liability.
By making the application, the Respondent was saying I am not caught by the two conditions listed in Section 354 of the Merchant Shipping Act. Since the Appellant was the one saying the Respondent was in breach, then the burden falls on him to so establish and that is what the trial Court meant by saying that the two grounds were not established by the Appellant. And if that is the requirement, did the Appellant supply evidence of negligence or recklessness with intent and knowledge that such acts or omissions would probably result in the destruction of the Appellant s property There was no such evidence.
In any case, the said Section 354 states that limitation of liability cannot be allowed if it is proved that damage arose from the ship owner s personal act or omission. Proof of causation of damage must precede and form part of the objection to the limitation. The person to prove the damage and what caused it is the Appellant. I would want to opine the other suit is fundamentally on the damage and how it was caused. It is therefore not practicable for the Appellant to effectively achieve that in an originating summons which is determined on affidavit evidence.

I think that is reserved for the suit against the Respondent. It s relevant there and not in this appeal.

It is obvious that the Appellant who is not complaining about the quantum of the limitation fund is crying wolf where there is no need. The Court is statutorily empowered to make the order with all the nuances accompanying it. The Appellant should be concerned about its claim and how it will be established and not fight the battle of other claimants who have not showed up. Part of the order made was that the Respondent should make a publication alerting any party who has a claim to show up.

Though I agreed with the Appellant that the Respondent has flouted statutory provisions requiring it to possess permits, licenses and reports and that it should not operate without those relevant permits, the appeal is still lacking in merit since the foundation of the claim herein and in the other suit is not the absence of such permits but physical damage caused to the property of the Appellant.

On the whole therefore, the appeal is unmeritorious and is hereby dismissed. The decision of the Federal High Court delivered on the 16th day of February, 2016 by HON. JUSTICE BUBA is hereby affirmed.
N50,000 costs in favour of the Respondent.

MOHAMMED LAWAL GARBA, J.C.A.: I have read a draft of the lead judgement written by my learned brother, Yargata Byenchit Nimpar, JCA in this appeal wherein the crucial questions of the Appellant s burden of proof of the conditions for denying the limitation of liability on the part of the Respondent and causation of damages and losses allegedly done to and suffered by the Appellant were adequately considered. As demonstrated in the lead judgement, the Appellant bears the burden of proving that the conditions stipulated in Section 354 of the Merchant Shipping Act (MSA) 2007, exist to disqualify the Respondent from limiting its liability, which it failed to discharge.

I agree that the appeal is devoid of merit and join in dismissing it in terms of the lead judgement.

JOSEPH SHAGBAOR IKYEGH, J.C.A.: I agree with the exhaustive judgment prepared by my learned brother, Yargata Byenchit Nimpar, J.C.A., which I had the privilege of reading in advance.

Appearances

DOLAPO AKINRELE, SAN WITH HIM, ANTHONY NKADI, JACINTA OBINUGWU and KEMI OLUWAFor Appellant

AND

FUNKE AGBOR, SAN with him, K. K. OKWUJIAKOFor Respondent