Disputes are inevitable in every human setting and dealing. In a bid to protect individuals’ interests, agreements are reached either formally or informally. However, situations do arise that parties to an agreement may flout the agreement necessitating resolution of disputes to enforce the rights of the respective parties.
Resolution of the disputes can be done traditionally (i.e by instituting an action in a court of law) or by way of alternative means of resolving disputes different from the traditional method, such as arbitration, mediation, among others. Maritime or freight disputes, like many other commercial disputes, are majorly resolved through adversarial method of disputes resolution.
This traditional or adversarial method of disputes resolution in freight disputes have not, to a large extent, put into consideration the business interests of the parties who brought their case to court. Therefore, it is imperative to look into how maritime disputes especially in respect to freight issues are resolved in the past and the challenges encountered. Also , it is important to discuss the various alternative ways of resolving freight disputes through which effective maritime regime can be attainable in Nigeria.
Freight is related to goods transported by cargo through sea. Freight dispute on the other hand, arises in the course of transporting cargo by sea either due to loss, damage to the goods sought or being transported or an overcharge as to the transportation of the said goods. Freight dispute is one of areas covered by maritime or admiralty law and as such, discussion will be made as it relates to admiralty generally and freight disputes specially in the light of Nigerian laws.
In Nigeria, when freight disputes or maritime cases arise, the federal high court has the exclusive jurisdiction to hear and determine them. By the provision of Section 2 of the Admiralty Jurisdiction Act, maritime claim can be proprietary or general and a careful perusal of the section indicates that freight disputes fall under the category of general maritime claims. However, litigation which has been the most common as well as formal method of disputes resolution, including freight disputes, has proven not to be a suitable mechanism of resolving the said disputes due to some setbacks.
One, litigation is full of procedures that make it too technical to utilize in disputes resolution. Litigation severe business relationships as court decisions result in a win-lose situations. Above all, litigation is time consuming as this is evident in the case of Maersk & Anor v Adidide Investment Limited & Anor where an interlocutory appeal, not even on the substantial suit, lasted up to seven years before the interlocutory appeal was finally decided at the Supreme Court after the commencement of the substantial suit since January, 1996. The future of freight disputes may not be secured if litigation is the only method of disputes resolution. This birthed the need for alternatives to disputes resolution. Hence, the call for ADR in freight disputes resolution.
The commonly known Alternatives Disputes Resolution (ADR) are negotiations, conciliation, mediation and arbitration. The old Act, Arbitration and Conciliation Act of 2004 has now been repealed by Arbitration and Mediation Act 2023 with significance development in ADR mechanisms which will in the same vein promote quick dispensation of justice in dispute resolution.
By Section 5 of Arbitration and Mediation Act 2023, whenever there is an agreement between parties, for instance in freight matters, so as to make any dispute that may ensued between the parties to be resolved through arbitration, the court proceedings will be stayed pending the determination of the freight disputes through arbitration.
This does not in anyway, contradict the provision of Section 20 of the Admiralty Jurisdiction Act. The court of appeal has held to the effect in the case of Onward Enterprises Limited v MV Matrix that the combined reading of Section 10 of the Admiralty Jurisdiction Act and the decision of the court in Owners of MV Lupex v Nigerian Overseas and Chartering and Shipping Limited shows that arbitration clause in an agreement is valid and must be enforceable in appropriate cases by an order of stay of proceedings in lieu of determination of a dispute through arbitration.
Another applaudable rationale supporting the fact that ADR mechanisms will guarantee a effective and efficient resolution of freight disputes is the provision of Section 71 of Arbitration and Mediation Act 2023. Claims in respect to maritime disputes, including freight issues, have limitation periods. However, once the parties agree to resolve through mediation, the limitation period will not run throughout the mediation proceedings giving the parties ample opportunity to express their grievances and ensure that their disputes are resolved amicably.
Without any prejudice, it is an undisputable fact that litigation remains the major method of disputes resolution, freight disputes inclusive. However, there are now emerging inclinations towards Alternatives Disputes Resolution (ADR) mechanisms as alternatives to litigation. It should be noted that it is only when adequate awareness programmes are initiated to educate shippers as well as vessel owners on the benefits of employing ADR mechanisms for the quick resolution of their disputes and for the promotion of shipping activities that a well – secured future of effective resolution of freight disputes can be guaranteed.
Essay written by Ismail Khadijat Moromoke, a 300 level Common and Islamic law student, University of Ilorin, Ilorin, Nigeria. Reachable via email- moromokekhadijat@gmail.com and phone call – 07014015871
Diar Ramadani, ‘The Effectiveness of Solving Commercial Disputes: Alternative Dispute Resolution vs Commercial Litigation in Kosovo’ Rochester Institute of Technology (RIT Scholars Work) available at < https://scholarworks.rit.edu/cgi/viewcontent.cgi?article=12084&context=theses> accessed June 16th 2023
ibid Ie litigation Op.cit (1).
The business interests include; time, cost and satisfaction with the entire process which are the three indicators of the effectiveness of any dispute resolution mechanism Offline Advanced English Dictionary Application available at Google Play Store
Freight claim ensued from freight dispute and has been defined by Merriam-webster available at https://www.merriam-webster.com/dictionary/freight%20claim accessed June 16th 2023
Established by Section 249(1) of the Constitution of Federal Republic of Nigeria, 1999 As Amended
Section 1 of the Admiralty Jurisdiction Act 1991; Ikenga, KE.O ‘Problems of Litigation in Settlement of Maritime Disputes for Nigeria Today: Preference for Arbitration’ NAUJILJ 2013 available at https://www.ajol.info/index.php/naujilj/article/view/136289 accessed June 16th 2023
1991 Particularly Section 2(3)(e) & (f) of the Admiralty Jurisdiction Act 1991
Op.cit (9) Ed Abiola Sanni, ‘Introduction to Nigerian Legal Method’ Obafemi Awolowo University Press Limited, 2006 (2002)1 SC Voll II 157
Op.cit (9) Alternative Dispute Resolution (2010)2 NWLR(1179)530 (1993-1995)NSC 182 Abimbola Akeredolu & 3 ors,
‘Litigation and Dispute Resolution 2017’ 6th Edition, Global Legal Insights available at https://www.banwo-ighodalo.com/assets/resources/ec15e0778a06f779b846a141805c66ac.pdf accessed June 16th 2023 Section 18 of Admiralty Jurisdiction Act 1991
Ibid section 71
A very good example is this essay competition whose topic is centered on the need to result to ADR mechanisms in freight disputes resolution
