Shipping 2026

NIGERIA Law and Practice Contributed by: Adedoyin Afun and Michael Abiiba, Bloomfield LP

9. Implications of Non-Performance, IMO 2020, Trade Sanctions and International Conflict 9.1 Force Majeure and Frustration For the non-performance of a shipping contract to amount to force majeure, the operative maritime con - tract must expressly/impliedly provide that the cause of any such non-performance would constitute force majeure. The party alleging force majeure must show that: • there has been a force majeure event that falls within the meaning of the clause in the charter - party; • the non-performance is traceable to the force majeure event; and • notice requirement in the charterparty, if any, has been satisfied. Furthermore, for non-performance to amount to frus - tration, the cause of the non-performance must have been a supervening event (such as statutory impos - sibility, an outbreak of war or government acquisition of the subject matter of the contract) destroying a fun - damental assumption on which the shipping contract is predicated on. Where the supervening event is one which, by the terms of the contract, the parties contemplated the possibility of such an intervening circumstance aris - ing, or one of the parties had deliberately brought the supervening event, or the intervening circumstance is one not so fundamental as to destroy the basis of the shipping contract, the non-performance arising from such supervening event cannot amount to frustration of the shipping contract. 9.2 Enforcement of the IMO 2020 Rule Limiting the Sulphur Content of Fuel Oil By Section 335 (1)(a) of the MSA, provisions of the International Convention for the Prevention of Pollu - tion from Ships 1973/1978, of which the IMO 2020 is a product, apply in Nigeria. Furthermore, the NIMASA and the Nigerian Ports Authority (NPA) have made commitments towards ensuring the implementation and enforcement of the IMO 2020.

including maritime, include the Chartered Institute of Arbitrators UK (Nigeria branch), the Lagos Multi-Door Courthouse, and the Lagos Court of Arbitration. 7.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses In relation to a foreign jurisdiction clause, the defend - ant may file an anti-suit injunction in the relevant for - eign court. This approach is aimed at ensuring that the party in breach terminates the Nigerian proceedings in favour of proceedings in the foreign court, as pre - scribed by the foreign jurisdiction clause. The defendant may apply for a stay of the proceed - ings before the Nigerian FHC in accordance with the relevant foreign arbitration clause that has been breached and pursuant to the provisions of the AJA and the AMA. If the FHC sees merit in the defendant’s application, it will grant the stay. Where a vessel is under arrest, the FHC may order that the proceedings be stayed on condition that the arrest and detention of the vessel shall stay or be satisfactory security for the release of the vessel for the satisfaction of any award that may be made in the foreign arbitration. 8. Ship-Owners’ Income Tax Relief 8.1 Exemptions or Tax Reliefs on the Income of Ship-Owners’ Companies Nigerian law does not have a special tax exemption or tax reliefs applicable to the income earned by vessels. The recent tax demands by the Federal Inland Rev - enue Service (FIRS) on international shipping com - panies in Nigerian territorial waters are more about enforcing compliance with existing tax laws rather than introducing new tax reliefs or exemptions. These actions are aligned with the amendments made in the Finance Act, 2023, which require foreign companies, including shipping companies, to provide evidence of income tax filings and Tax Clearance Certificates to operate in Nigeria.

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