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OVERVIEW OF CARRIAGE OF GOODS BY SEA IN NIGERIA

The sea plays a vital role in global trade and commerce, particularly in transporting goods between countries through international shipping. This specialized type of contract falls under shipping law and differs from regular contracts, which can be formed verbally or implied through actions. Contracts for the carriage of goods by sea must be documented in writing.

In Nigeria, the carriage of goods by sea is regulated by the Carriage of Goods by Sea Act (COGSA) 2004, which is based on the principles of the Hague Rules. This article provides a comprehensive overview of the regulatory and practical framework governing the transportation of goods by sea in Nigeria.

Overview of the Legal Framework Governing the Carriage of Goods by Sea

In Nigeria, the maritime industry is regulated by a variety of laws and regulations designed to ensure safety, security, and operational efficiency. They include the following:

1. Nigerian Maritime Administration and Safety Agency Act (NIMASA Act), 2007

The NIMASA Act established the Nigerian Maritime Administration and Safety Agency (NIMASA), which is responsible for regulating maritime safety, security, and pollution control. NIMASA plays a key role in ensuring compliance with international standards in the carriage of goods by sea.

2.Merchant Shipping Act, 2007

The Merchant Shipping Act of 2007 is the principal law regulating shipping activities in Nigeria. It governs issues related to the registration of vessels, the rights and liabilities of shipowners, and the regulation of seafarers. It also incorporates key provisions of international conventions, such as the International Maritime Organization’s (IMO) safety regulations, into Nigerian law.

3. Carriage of Goods by Sea Act (COGSA), 2004

The Carriage of Goods by Sea Act (COGSA) 2004 incorporates the Hague-Visby Rules into Nigerian law. These rules, which form part of international maritime law, regulate the rights and responsibilities of shippers and carriers concerning the carriage of goods by sea. The Act provides a framework for determining liability in cases of loss or damage to goods during transit.

4. Bills of Lading Act

The Bills of Lading Act governs the issuance and use of bills of lading, which serve as evidence of the contract of carriage and the condition of the goods being transported. It establishes the rights of the consignee to claim the goods and addresses issues such as transferability and negotiability.

5. Admiralty Jurisdiction Act

The act establishes a comprehensive legal framework for resolving maritime contract disputes in Nigeria. Section 1 of the Act grants the Federal High Court exclusive jurisdiction over maritime contracts and related matters in Nigeria. This Act empowers the court to address property interests in ships or aircraft and disputes arising from maritime contracts. 

6. The Nigerian Ports Authority Act

The Nigerian Ports Authority (NPA) Act establishes the Nigerian Ports Authority, which is responsible for the management, operation, and development of ports across Nigeria. The NPA’s primary mandate is to ensure the efficient functioning and competitiveness of Nigeria’s ports, overseeing activities such as port infrastructure development, cargo handling, and maritime safety. It plays an important role in promoting trade and maintaining the smooth operation of Nigeria’s maritime gateways.

Nigeria is a signatory to various international conventions that influence its maritime laws. Some of these include:

7. Hague-Visby Rules

The Hague-Visby Rules provide a balance between the interests of the shipper and the carrier. They establish that the carrier must exercise due diligence to make the ship seaworthy, supply the vessel, and ensure the cargo is properly loaded, handled, and discharged. Carriers are however given a wide range of defenses against claims for loss or damage, including acts of war, natural disasters, and errors in navigation.

8. The Hamburg Rules (1978) 

The Hamburg Rules are a set of international legal guidelines established by the United Nations Convention on the Carriage of Goods by Sea. They were designed to modernize and balance the rights and obligations between shippers and carriers. Although the rules intended to improve fairness in maritime trade, the Hamburg Rules have not been widely adopted, as many countries continue to use the Hague-Visby Rules. 

Contract of Carriage of Goods by Sea

A contract of carriage applies only to agreements covered by a bill of lading or a similar document of title, as long as the document relates to the transport of goods by sea. This document governs the relationship between the carrier and the document holder with the terms clearly outlined.

Also, in this context, “goods” refers to all kinds of merchandise, wares, and items, except live animals and cargo expressly stated to be carried on deck. In a contract for the carriage of goods by sea, there are four key parties involved:

  • The Shipper

The shipper is the person or entity that sends the goods. The shipper is responsible for preparing the goods for transport, providing necessary documentation, and ensuring that the cargo is suitable for carriage.

  • The Carrier

Article 1 of the Carriage of Goods by Sea Act defines a carrier to “include the owner or the charterer who enters into a contract of carriage with a shipper”.  The carrier has a duty to ensure the vessel is seaworthy and must deliver the goods in the same condition they were received. Once the shipper shows that a loss has occurred, the burden of proof shifts to the carrier, who must then explain how the loss happened.

  • The Consignee

The recipient of the goods. Once the goods arrive at the port of destination, the consignee is responsible for clearing and taking delivery of them.

  • Freight Forwarders

These are intermediaries who assist in the logistics of moving goods from one point to another. They handle the documentation, customs clearance, and other logistics involved in the carriage of goods by sea.

Overview of Bill of Lading

A Bill of Lading is a document signed by the shipowner, the ship’s master, or an agent of the shipowner, confirming that specific goods have been loaded onto a particular ship. It outlines the terms under which the goods have been delivered to and received by the shipowner. 

The bill serves as a certificate, issued by the shipowner or the ship’s master, to the consignor as proof that the goods described in the document have been delivered into the ship for carriage to the consignee or their designated recipient. This document is widely used in international shipping and is issued in three copies for the ship master, the consignor, and the consignee. 

Upon the good’s arrival, the consignee claims them by presenting the bill of lading to the ship’s master. The bill of lading serves as a receipt for shipped goods, a contract outlining the terms of carriage and delivery, and a binding agreement between the shipowner/carrier, the shipper/consignor, and the consignee/endorsee.

Responsibilities and Liabilities in Contracts of Carriage of Goods by Sea

In a contract for the carriage of goods by sea, each party has specific responsibilities, and failure to meet these obligations can result in liability for any breach. 

Let’s examine them below.

Carrier’s Responsibilities

Article 3 of the Carriage of Goods by Sea Act outlines the responsibilities and liabilities of the Carrier. They include the following:

  • Ensuring Seaworthiness: The carrier must provide a seaworthy vessel, fit for the intended voyage and capable of safely carrying the cargo.
  • Proper Handling and Care of Cargo: The carrier is responsible for the safe handling, storage, and transportation of the goods, ensuring they are protected from damage during the voyage.
  • Timely Delivery of Goods: The carrier must deliver the cargo to the agreed destination within the time specified in the contract or bill of lading.
  • Delivering to the Right Consignee: The carrier must ensure that the goods are delivered to the correct consignee or authorized recipient.
  • Compliance with Applicable Laws and Regulations: The carrier is required to follow all applicable maritime laws, regulations, and safety protocols.
  • Issuance of Bill of Lading: The carrier must issue a bill of lading as a receipt of the goods and a contract for their carriage.
  • Protecting Cargo from Risks: The carrier must protect the cargo from perils such as water ingress, theft, and other risks during the voyage.

Carrier’s Liability

The carrier’s liabilities are primarily centered around the loss, damage, or delay of goods. The extent of the carrier’s liability is often determined by both the terms of the contract and applicable international conventions and they include:

  • Liability for Loss or Damage: The carrier is responsible for any loss or damage to the goods during transit unless they can prove it was caused by an exempted event like acts of God, public enemy, war, or shipper’s fault.
  • Liability for Delay: The carrier is liable for delays in delivery if the goods are not delivered within the agreed time frame, especially if the delay results in financial loss for the shipper or consignee.
  • Failure to Provide Seaworthy Vessel: If the carrier does not ensure the ship is seaworthy and fit for the journey, they may be held liable for any damage or loss caused by the vessel’s deficiencies.
  • Incorrect Delivery: The carrier is liable for delivering goods to the wrong consignee or at the wrong destination.
  • Breach of Contract Terms: Any failure to fulfill obligations outlined in the contract of carriage or bill of lading, such as improper handling or stowage of cargo, can result in liability for the carrier.

Shipper’s Responsibilities and Liabilities

The shipper, who is usually the owner or consignor of the goods, also has important obligations under the contract of carriage. These responsibilities include:

  • Accurate Description of Goods

The shipper must provide an accurate description of the goods, including their nature, quantity, weight, and packaging. This information is crucial for the carrier to properly stow and transport the goods. Any misrepresentation or incorrect information provided by the shipper can lead to liability for damages or delays.

  • Proper Packaging

The shipper is responsible for ensuring that the goods are properly packed and labeled to withstand the rigors of sea transport. Improper packaging can result in damage to the goods, for which the shipper may be held liable.

  • Payment of Freight

The shipper must pay the agreed freight or shipping charges to the carrier. Failure to pay these charges can result in a lien being placed on the goods, allowing the carrier to retain possession of the cargo until payment is made.

  • Liability for Dangerous Goods

If the shipper is transporting dangerous goods, they must inform the carrier of the nature of the cargo and comply with any applicable safety regulations. If the shipper fails to disclose that the goods are hazardous, they may be liable for any resulting damage to the ship, crew, or other cargo.

Conclusion

In summary, the carriage of goods by sea in Nigeria is an important aspect of the country’s trade and commerce. As discussed, it is governed primarily by the Carriage of Goods by Sea Act, which is rooted in the Hague Rules. This legal framework establishes clear guidelines for the responsibilities and rights of the parties involved, including shippers, carriers, insurers, and buyers. 

While the act provides a comprehensive structure, the influence of common law principles and English case law remains significant to ensure that international standards are upheld. As Nigeria continues to engage in global trade, understanding the technicalities of maritime law and its application is essential to ensure smooth and efficient shipping operations.