NIGERIA Law and Practice Contributed by: Adedoyin Afun and Michael Abiiba, Bloomfield LP
the form of a cash deposit into court, a letter of undertaking (LOU) from a member of the Interna - tional Group of Protection and Indemnity Clubs (IGP&I) or a guarantee from a Nigerian bank or insurance company. Where the ordered security for costs is not pro - vided within the set timeline, the vessel would be released from arrest. 4.6 Arresting Bunkers and Freight Claims for bunkers and freight are maritime claims under the AJA. It is therefore possible to arrest bunkers and freights in Nigeria. See 1.1 Domestic Laws Establishing the Authorities of the Maritime and Shipping Courts and 4.4 Unpaid Bunkers . 4.7 Sister-Ship Arrest Section 5(4) permits sister-ship arrests, provided that the Relevant Person is, at the time the action is filed, the owner, in respect of all the shares of the sister ship. 4.8 Other Ways of Obtaining Attachment Orders Apart from ship arrests, another possibility of obtaining attachments orders is through an application for a Mareva injunction, which is an interim attachment of assets equivalent to the value of the claimant’s claim. Nigerian courts will only grant the injunction where the claim - ant has a justifiable cause of action against the defendant and there is a real risk of the defend- ant removing their assets from jurisdiction. 4.9 Releasing an Arrested Vessel Pursuant to the AJPR, an arrested vessel may be released upon an application by a party under the following circumstances.
• An amount equal to the amount claimed or the value of the ship has been paid into court. • The defendant provides security in an amount equal to the amount claimed in the suit, or the value of the vessel, whichever is the lesser. However, where the claim relates to salvage, the release is subject to the value of the ves - sel being agreed upon by the parties or being determined by the court. • The arresting party consents to the release in writing. • The suit is discontinued or dismissed and there is no caveat against the release of the vessel. • The cargo on board the ship is under arrest, but the ship is not. An LOU from a member of the IGP&I would be acceptable for the release of an arrested vessel. A bank guarantee from a foreign bank would not be accepted by the FHC, as it is not one of the forms of security prescribed by the AJPR. Not - withstanding the foregoing, the FHC may accept a foreign bank guarantee for the release of an arrested vessel where the arresting party is will - ing to accept such a guarantee. 4.10 Procedure for the Judicial Sale of Arrested Ships Where a vessel has been under arrest, and her owners have failed to provide security for her release within 60 days from the date of arrest, the court may, on the application of the arrestor or any interested party, order that the vessel be valued and sold by the Admiralty Marshal and the proceeds of the sale placed in an interest- yielding fixed-deposit account in the name of the Admiralty Marshal, pending further orders from the court. The definition of an interested party includes any person that has a legal or an equi - table or a security interest in the ship or other property.
408 CHAMBERS.COM
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