NIGERIA Law and Practice Contributed by: Adedoyin Afun and Michael Abiiba, Bloomfield LP
The priority of claims against arrested ships or prop - erty are laid down in the AJPR as follows: • statutory/court charges and expenses, such as the Admiralty Marshall’s expenses in connection with the ship or property; • salvage, wreck removal and contribution in general average; • wages and other sums due to the master, officer, and other members of the ship’s complement in respect of their employment on the ship; • disbursements of the master on account of the ship; • loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship; • ports, canal and other waterways, dues and pilot - age dues; • possessory liens (repairer’s lien – where the ship is still in possession); • mortgages – priority of mortgages is determined by the date on which each mortgage is recorded in the register and registered mortgages have priority over unregistered mortgages; • in rem action for possession or ownership of a ship; • in rem action in relation to a dispute between co- owners regarding possession or use of a ship; • in rem action in relation to loss or damage to cargo carried on a ship; • lien in rem action in relation to damage received by a ship; • in rem action in relation to a dispute arising out of contracts for carriage of goods or use of a ship; and • in personam action. Pursuant to Section 67 of the MSA, maritime liens have priority over mortgages and any other claims, in the following order: • claims for salvage, wreck removal and contribution in general average; • wages and other sums due to the master, officers and other members of the ship’s complement in respect of their employment on the ship; • disbursements of the master on account of the ship;
• claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship; and • claims for ports, canal and other waterways, dues and pilotage dues. Also, pursuant to Section 56 of the MSA, the priority of mortgages is determined by the date on which each mortgage is recorded in the register and registered mortgages have priority over unregistered mortgages. 5.11 Insolvency Laws Applied by Maritime Courts Nigeria has a scheme of insolvency and restructuring laws, some of which are provided in the Companies and Allied Matters Act 2020 (CAMA) and the Bank - ruptcy Act, Cap. B2 LFN, 2004 (the “Bankruptcy Act”). These schemes include administration and compa - nies’ voluntary arrangements, which are analogous to Chapter 11 bankruptcy proceedings. The AJA, which governs the arrest and judicial sale of vessels, does not include these bankruptcy pro - ceedings as grounds for the arrest and judicial sale of a vessel. However, the CAMA and the Bankrupt - cy Act grant administrators, liquidators, and others wide powers with respect to the sale of a company’s assets, with or without an order of court. 5.12 Damages in the Event of Wrongful Arrest of a Vessel Section 13 of the AJA states that the arresting party will be liable for wrongful arrest where: • the arrest was obtained unreasonably and without good cause; or • the arresting party, unreasonably and without good cause, demands excessive security in the pro - ceeding, or fails to give a consent required for the release of a ship or other property. The AJPR also provides reparation for needless arrest where it is procured in bad faith, through gross neg - ligence, or unlawfully. Following the dismissal of the suit, on the aforementioned basis, the AJPR states that the arrestor would be liable for damages for any loss, injury or expenses that the defendant may have sustained by reason of the arrest, upon the application
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