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BACKGROUND

The jurisdiction of a court to entertain a matter is conferred on the court by the Constitution of the Federal Republic of Nigeria 1999 (as amended) or by the statute that created the court. Section 251(1)(g) of the Constitution confers on the Federal High Court the competence to entertain any admiralty matters in Nigeria to the exclusion of all other courts in the country. It is interesting to note that the scope of this admiralty jurisdiction of the Federal High Court has become less clear following a number of recent court decisions. Prior to the promulgation of the 1999 Constitution, there existed a jurisdictional tussle on admiralty matters between the Federal High Court and the State High Courts. The Supreme Court resolved this jurisdictional wrangling in SAVANNAH BANK LIMITED V. PAN ATLANTIC SHIPPING & TRANSPORT AGENCIES1where the Court held that the Federal High Court and the State High Courts had concurrent jurisdiction over admiralty matters. The 1999 Constitution further settled the issue in section 251(1) which provides that the jurisdiction of the State High Courts is subject to the exclusive jurisdictional competence of the Federal High Court on specific subject matters listed in section 251, which includes “any admiralty jurisdiction.”

The application of the concept of simple contracts within the context of the subject matter jurisdiction of the Federal High Court has unsettled and rendered less defined the admiralty jurisdiction of the Federal High Court. The Supreme Court has endorsed the position that the Federal High Court does not possess jurisdiction in respect of simple contracts. Instead, it is the State High Courts that can exercise jurisdiction in respect of simple contractual claims.2 This has created uncertainty regarding the admiralty jurisdiction of the Federal High Court as most admiralty matters are based on simple contracts.

The case under review examines the application of the concept of simple contracts by the Supreme Court in determining the admiralty jurisdiction of the Federal High Court. It also highlights the implication of the decisions for the maritime industry.

BRIEF FACTS

The Respondent commenced this action at the

Rivers State High Court claiming, among other

reliefs, the sum of N14,800,000.00 (Fourteen

Million, Eight Hundred Thousand Naira only), (the

equivalence of 38,845 US Dollars)3 representing

hire rentals of the houseboat Prince III. It was the

Respondent’s case that it delivered the

houseboat to the Appellant for the temporary

use of the Appellant’s staff. After the delivery of

the houseboat to the Appellant, the Appellant

requested that the houseboat be upgraded to

European executive standard. Pursuant to this

1 (1987) 1 NWLR (Pt. 49) 212; (1987) LPELR-SC 139/1985. 2 ONUORAH Vs. KADUNA REFINING & PETROCHEMICAL CO. LTD (2005) LPELR-2707 (SC). 3 At the exchange rate of 381 Naira to 1 US Dollar

request, the Respondent claimed to have carried

out further modification of the houseboat while

the houseboat was in possession of the

Appellant. Upon the completion of the

modification, the Respondent alleged that the

Appellant refused and or neglected to make

payment for the hire of the houseboat. The

Appellant denied the Respondent’s claims and

contended that it did not take delivery of the

houseboat because the Respondent failed to

meet the delivery deadline and also because the

boat did not meet the required standard.

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At the conclusion of the trial, the High Court

found as a fact that there was a contract between

the parties involving the hire of the houseboat.

The Court, among other reliefs, awarded in

favour of the Respondent the sum of

N8,800,000.00 (Eight Million Eight Hundred

Thousand Naira), (the equivalence of 23,097 US

Dollars) being the hire rentals of the houseboat.

On appeal, the Court of Appeal upheld the

decision of the High Court. The Appellant further

appealed to the Supreme Court. One of the issues

submitted for the consideration of the Supreme

Court was whether the Respondent’s claim fell

within the admiralty jurisdiction of the Federal

High Court as to rob the High Court of Rivers State

the jurisdiction to entertain the suit. The

Appellant referred to sections 251 and 272 of the

Constitution and argued that the High Court of

Rivers State did not have the requisite jurisdiction

to entertain the suit. On its part, the Respondent

argued that the High Court of Rivers State had the

jurisdiction to hear and determine the suit as the

suit was based on a simple case of debt owed by

the Appellant to the Respondent which arose

from breach of contract of hire of a houseboat

and that the claim did not arise in the main nor

touch on anything admiralty to oust the

jurisdiction of the High Court of Rivers State. The

Supreme Court held that the Rivers State High

Court had the jurisdiction to hear the case.

BASIS OF THE COURT’S DECISION

In arriving at its decision, the Supreme Court

considered the provisions of section 251(1)(g)

and 272(1) of the Constitution. Section 251(1)(g)

of the Constitution provides as follows:

“Notwithstanding anything to the

contained in this Constitution and in

addition to such other jurisdiction as

may be conferred upon it by an Act of

the National Assembly, the Federal High

Court shall have and exercise

jurisdiction to the exclusion of any other

court in civil causes and matters –

g. any admiralty jurisdiction,

including shipping and

navigation on the River Niger or

River Benue and their affluents

and on such other inland

waterway as may be designated

by any enactment to be an

international waterway, all

Federal ports, (including the

constitution and powers of the

ports authorities for Federal

ports) and carriage by sea.”

Section 272 of the Constitution provides that:

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“Subject to the provisions of section

251 and other provisions of this

Constitution, the High Court of a State

shall have jurisdiction to hear and

determine any civil proceedings in which

the existence or extent of a legal right,

power, duty, liability, privilege, interest,

obligation or claim is in issue.”

The Court also considered 26 of the Admiralty

Jurisdiction Act, 1991 which defines a ship as “a

vessel of any kind used or constructed for use in

navigation by water, however it is propelled or

moved.…”

The Supreme Court affirmed the finding of the

High Court that the transaction between the

parties was a hire of the houseboat. Muhammed

J.S.C who delivered the lead judgment regarded

the transaction as “a simple contract and not an

admiralty or maritime matter. This is

because…the action filed before the trial court is

for the recovery of accrued and unpaid hire

rentals for a houseboat let to the appellant by

the respondent and damages for breach of the

contract.” The Court held further that the fact

that a houseboat comes within the meaning of a

ship under section 26 of the Admiralty

Jurisdiction Act cannot convert an agreement for

hire of houseboat into an admiralty agreement.

The mere fact that a ship is involved in a simple

contract does not automatically make that simple

contract a subject for jurisdiction in admiralty

matters. The Court concluded finally that “This

case of a simple contract of debt recovery is

within the civil jurisdiction of the Rivers State

High Court and it properly assumed jurisdiction

on the matter.”

COMMENTARY

With all due respect to the Supreme Court, the decision under review is contrary to the express

provisions of the Admiralty Jurisdiction Act which defines in detail the admiralty jurisdiction of the

Federal High Court. Section 1(1)(a) of the Admiralty Jurisdiction Act specifies that the admiralty

jurisdiction of the Federal High Court includes the jurisdiction “to hear and determine any question

relating to a proprietary interest in a ship or aircraft or any maritime claim specified in section 2 of

this Act.” Section 2 of the Admiralty Jurisdiction Act enumerates several claims that fall within the

admiralty jurisdiction of the Federal High Court. In particular, section 2(3)(f) of the Act provides for “a

claim arising out of an agreement relating to the carriage of goods and persons by a ship or to the

use or hire of a ship, whether by charter-party or otherwise.”4 These provisions of the Admiralty

Jurisdiction Act are very clear and unambiguous. It is settled law that where the words used in a statute

are plain and unambiguous, the courts are enjoined to give the words their ordinary and natural

meaning without embarking on a voyage of discovery.5

The Respondent’s claim in the decision under review, being a claim relating to the hire of a houseboat,

falls squarely within the purview of section 2(3)(f) of the Admiralty Jurisdiction Act, and as such falls

within the admiralty jurisdiction of the Federal High Court. Surprisingly, the Supreme Court did not

consider the provisions of sections 1(1)(a) and 2(3)(f) of the Admiralty Jurisdiction Act in arriving at its

decision, even though the Appellant relied on these sections in its argument.

The Admiralty Jurisdiction Act which defines the scope of the admiralty jurisdiction of the Federal High

Court provides for different types of agreements and transactions that are within the admiralty

jurisdiction. Some of these agreements and transactions are mortgage of a ship, carriage of goods,

supply of goods or materials to a ship for its use or maintenance, provision of services to a ship,

shipbuilding, repair of ship, and so on.6 All these are based on contracts. The decision that the Federal

4 Underlining for emphasis 5 See Aromolaran v.Agoro (2014) 18 NWLR (pt. 1438) 153

6 See section 2 of the Admiralty Jurisdiction Act

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High Court lacks the jurisdiction to hear and determine any claim based on simple contracts has the

effect of stripping the Federal High Court of its admiralty jurisdiction as most of the items of claims

enumerated in section 2 of the Admiralty Jurisdiction Act can only be actualized by means of contracts.

It is particularly worrisome that in June 2020, the Supreme Court in CRESTAR INTEGRATED NATURAL

RESOURCES LIMITED V. SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED7 held

that “There is no aspect of breach of contract, be it a simple or complex contract, that the

Constitution in Section 251(1) thereof, confers jurisdiction on the Federal High Court to adjudicate

on.”

The law is clear that a court is competent to exercise jurisdiction whenever the subject matter of the

claim is within the jurisdiction of the court. It is the subject matter of a contract and not the existence

of the contract that determines the jurisdiction of a court. Using the existence of a contract as a test

for determining jurisdiction, instead of the subject matter of the contract, has the effect of stripping

the Federal High Court of the admiralty jurisdiction duly conferred on it by the Constitution.

The obvious implication of the decision under review is that ship owners, charterers, seafarers and

consignees have lost the opportunity to commence admiralty actions at the Federal High Court where

the action is based on contract.

For further enquiries, please contact:

7 SC/765/2017 delivered by the Supreme Court on 5th day of June 2020

JACOB FAMODIMU jacob.famodimu@advocaat-law.com

LAZARUS KALU Lazarus.Kalu@advocaat-law.com

GLORY OGUNGBAMIGBE glory.ogungbamigbe@advocaat-law.com