Mv “nozomi” & Anor V. Seabridge Bunkering Pte Limited (2016)

LawGlobal-Hub Lead Judgment Report

UZO I. NDUKWE-ANYANWU, J.C.A.

 This is an appeal against the decision of the Federal High Court sitting at Lagos Division delivered on the 25th September, 2014 by Hon. Justice O.E. Abang.
The facts briefly stated are as follows:
By a writ of summons together with a statement of claim filed on 28th August, 2014, the 1st respondent as Plaintiff claimed against the Appellants as follows:
“(a) The sum of US$208,098.26 being the sum owed the Plaintiff by the Defendants arising from the supply of marine fuel oil and marine gas oil to the MV Nozomi for its operation and maintenance.
?(b) The sum of US$41,758.38 being the accrued interests as at August 21, 2014 for the late payment of the principal Sum arising from the supply of marine fuel oil and marine gas oil to the MV Nozomi for its operation and maintenance.
(c) The sum of US$1,000,000 as general damages.
(d) Interest on (a) thereon at the rate of 2 per cent per month from the date of filing this action until judgment is delivered and 10% from the date of judgment until the judgment sum is entirely liquidated; and
(e) The costs of this

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action.”

The 1st respondent simultaneously with the issuance of the writ applied for and obtained an order ex-parte dated 28th August, 2014 arresting the 1st Appellant’s vessel to secure their claim, which was subsequently served on the Appellants.

Parties began negotiations about the appropriate security for the release of the 1st Appellant’s vessel but were unable to agree as to the form and quantum of security for the vessel’s release. It is the case of the Appellants that the 1st respondent insisted that it will only consent to the release of the vessel by a cash settlement of the claim despite the provision of a letter of Undertaking by the Appellants’ Protection and Indemnity Club as security for the claim.

The Appellants filed an application for the vessel’s release upon provision of the North of England Protection and Indemnity Club’s Letter of Undertaking in the sum of US$249, 854,64 (Two Hundred and Forty-Nine Thousand, Eight Hundred and Fifty-Four United States Dollars, Sixty-Four Cents only), inclusive of interest and costs.
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In opposition to the Appellants’ application, the 1st Respondent filed a Counter-affidavit to the

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application on 11th September, 2014.
The trial judge in a considered Ruling granted the Appellants’ application in part, rejected the Letter of Undertaking provided by the Appellants and ordered that the vessel be released upon the provision of a bank guarantee on the grounds that the said Letter of Undertaking did not protect the interests of the 1st Respondent even after agreeing that the North of England protection and Indemnity Club Letter of Undertaking is good security universally recognized.

The Appellants being dissatisfied with the ruling filed a Notice of Appeal dated 3rd October, 2014 consisting of five (5) grounds. The appeal was heard on the Appellants’ brief alone filed on 14th October, 2015 but deemed properly filed on 15th October, 2015 by order of this Court, due to the failure of the Respondents to file any brief within the specified time.

The Appellants in their brief formulated three issues for determination of this Court viz:
?1. Whether the learned trial Judge was right or wrong to have rejected the North of England P & I (No E) Letter of Undertaking (LoU) admitted to be an acceptable form of security by the

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learned trial Judge under the Admiralty jurisdiction Procedure Rules, which was offered for the release of the 1st Appellant vessel simply because the Plaintiff/1st Respondent rejected same on the ground that the proposed security contained the wordings “final unappealable judgment of a competent Court” and was to be governed by Nigeria law?” (Grounds 1, 2 & 4)
2. Whether the lower Court was right to have unilaterally imposed the sum of additional US$40,000 by way of accruing interest to the Plaintiffs claim for the purpose of the Appellant providing security for the claim when no figure was suggested to him by the Respondent at the hearing, and particularly when it was not requested for by the Plaintiff/Respondent? (Ground 3).
3. Whether the lower Court was right when, in constraining the terms of the NoELoU, it held that the LoU was inadequate to cover the Plaintiffs claim after holding that it was sufficient and acceptable form of scarcity?
(Ground 5)”

ISSUE 1
It is the contention of learned counsel for the Appellant that there are three forms of security generally acceptable for the release of a vessel. This includes a bank