INTRODUCTION:
The Coastal and Inland Shipping (Cabotage)
Act No 5 of 2003 Laws of the Federation of
Nigeria (Hereinafter referred to as “Cabotage Act”), is a
federal Legislation that seeks amongst others to restrict the use
of Foreign Vessels in Domestic Coastal Trade to promote the
development of Indigenous Tonnage and to establish a Cabotage
Vessel Financing Fund and for Related Matters amongst other
things.
The Act amongst other Legislations is enforced by the Nigerian
Maritime Administration and Safety Agency (Hereafter, “NIMASA” or
“The Agency”). Amongst the numerous powers granted via the
Cabotage Act is the power register a vessel and
detain same where there are reasonable grounds that a vessel has
contravened the provisions of the Act— ss.22 and 31
respectively.
In line with the above provisions and powers of the agency,
there have been series of Arguments and Counter Argument as to
whether a drilling rig is in fact a vessel capable of Registration
and by extension detention where such a Drilling may have been said
to have contravened the provisions of the law. It is therefore the
intention of the writer to analyze the Arguments whilst considering
the relevant provisions of our Legislations and relevant case laws
on this issue.
ANALYSIS OF RELEVANT AUTHORITIES AND
ARGUMENTS.
In accordance with ss.3-6, 21 of the Cabotage
Act, there exist a mandate on all proposed foreign vessels
or bodies and (drilling) authorities/bodies to comply with the
necessary registration and/or grant of license before carrying out
any form of Domestic Coastal Trade within the territorial and
contiguous boundaries/zones of Nigeria, including our inland
waters, Exclusive Economic Zones and Continental shelf. For the
sake of clarity, the writer considers it necessary to reproduce the
aforementioned provisions of the Cabotage Act;
“…3. A vessel other than a vessel wholly owned and manned by
a Nigerian citizens, built and registered in Nigeria shall not
engage in the domestic coastal carriage of cargo and passengers
within the coastal territorial inland waters, or any point within
the waters of the exclusive economic zone of Nigeria.
- (1) A tug or vessel not wholly owned by a person who is a
Nigerian citizen shall not tow any vessel from or to any port or
point in Nigeria n waters, or tow any vessel carrying any substance
whatsoever whether of value or not or any dredge material whether
or not it has commercial value from a point within Nigerian
waters.
(2) Nothing in this section shall preclude a foreign vessel
from rendering assistance to persons, vessel or aircraft in danger
or distress in Nigerian waters.
- A vessel tug or barge of whatever type other than a vessel,
tug and barge whose beneficial ownership resides wholly in a
Nigerian citizen shall not engage in the carriage of materials or
supply services to and from oil rig, platforms and
installationswhether offshore or onshore or within any ports or
points in Nigerian waters. - A vessel of whatever type or size shall not engage in
domestic
Furthermore, section 21 provides that;
- A foreign owned and foreign crewed vessels shall not
participate in the domestic coastal trade without the license and
authorization required by the provisions of this Act.”
It follows by implication from the above provisions, that there
exist only but two ways by which foreign vessels may be registered
in Nigeria;
1) By a grant of license by the (relevant)
Minister—ss.15-21 of the Cabotage Act.
2) By the formal Registration of the vessel in accordance with
the Act—s.23 of the Cabotage Act.
It’s Noteworthy that further analysis of the Cabotage
Act in s.22(5)(a-m) reveals the type of vessel that are
capable of being registered.
However, there have been numerous arguments that this provisions
or List [s.22(5) of the Cabotage Act] is not in
itself exhaustive especially given the use of the phrase that
“Vessels eligible for registration under this Act
include…”. The Argument spring from the fact that the use of
the Word ‘Include’ in that phrase means that the list is and can be
expanded. Furthermore, proponents of this argument hold the view
that the omnibus provision of para m, of subsection 5, of
section 22 of the Cabotage Act should be read using the
Ejusdem generis rule of interpretation.
In line with the Arguments above as to the inexhaustive nature
of the provisions of s.22(5) of the Cabotage Act,
there have been suggestions that a (foreign) drilling rig may
infact fall under this section, hence would be required to be
registered in line with the Cabotage Act before commencing its
activities within Nigeria. It is necessary to state that in the
Guidelines for the implementation of the Cabotage Act(The
Cabotage Guideline) in Para 9.1.1.(c), the word ‘Drilling
Rig’ was included to be a vessel, under the schedule fees for
waiver. The Guidelines, first issued in 2003 and subsequently
revised in 2007, was issued by the Minister of Transport pursuant
to his powers under Section 46 of the Cabotage
Act.
The writer contends that by implication, this insertion has
amended the provisions of s.22(5) of the Cabotage
Act. The writer further contends that the use of Ejudem
Generis rule of interpretation isn’t the best rule of
interpretation to adopt, as it allows for a wide vacuum of
elements, including those not intended by the Law makers.
It is the opinion of the writer that the Expresio Unius Est
Exclusio Alterius rule of interpretation, which holds that the
Express mention of a thing is the very Exclusion of every other
thing; is the best rule of interpretation. This rule of
interpretation would help checkmate any form of unreasonable
amendment and by Extension, addition of other elements or items as
a vessel so as to bring it under the Act.
Furthermore,”Vessel” according to the interpretation section of
the Cabotage Act—s.2; includes any description
of vessel, ship, boat, hovercraft or craft, including air cushion
vehicles and dynamically supported craft, designed, used or capable
of being used solely or partly for marine navigation and used for
the carriage on through or under water of persons or property
without regard to method or lack of propulsion;
It follows from the above that a drilling rig may not qualify In
line with the above in the interpretation section of the Cabotage
Act, this view was what gave rise to the decision in the unreported
case of Noble Drilling (Nig) Ltd v NIMASA &
Minister of Transport unreported—FHC/L/CS/78/2008;
wherein the learned Judge found for the Plaintiff in that suit that
a Drilling rig does not come with the interpretation of a vessel
and as such cannot be capable of Registration or detention. It was
further held that the drilling rig was incapable of marine
navigation as required in the definition of a vessel under the
Cabotage Act. However, this ruling was upturned on appeal basically
on technicalities with regards to Jurisdiction. The substantive
matter was not pronounced upon by the Appeal court.
Similar issues in the Noble Drilling
Case were considered in Seadrill Mobile
Units Nigeria Limited v The Honourable Minister for Transportation
& 2 Others Suit No. FHC/L/CS/607/2016. (Judgment
in this matter was delivered on June 14, 2019.) where the learned
Judge essentially determined the following issues:
- Whether drilling operations fall within the definition of
‘coastal trade’ and ‘cabotage’ under Section 2 of the Cabotage Act;
and - Whether on a proper interpretation of the Cabotage Act,
particularly Sections 2, 5, 22(5), drilling rigs fall within the
definition of ‘vessel’ under the Cabotage Act.
On the first issue, the Court held that where drilling
operations are carried out offshore, such activities will fall
within the definition of ‘coastal trade’ and ‘cabotage’ under
paragraph (d) of section 2 of the Cabotage
Act.
Regarding whether Drilling Rigs fall within the definition of a
Vessel under the Cabotage Act, the Court held that the use of the
word ‘include’ in the list of vessels eligible for cabotage
registration, as contained in Section 22(5) of the Cabotage
Act, implies that “similar crafts within the category
listed can be allowed in” and therefore Rigs can be included
in the list of Vessels under the Cabotage Act. The Court was
particularly swayed by the fact that one of the vessels of the
Plaintiff is a drill ship which it regarded as “a vessel with a
drilling rig” and which is “capable of navigating in and within the
waters of Nigeria carrying out drilling operations”. The
implication of this latest judgment seems that oil rigs operating
on Nigerian waters will now be subject to the provisions of the
Cabotage Act.
It’s important to reconsider these two issues again(without
prejudice to the fact that the court has decided), on the first;
regard is made to the definition of “Coastal Trade” or/and
“Cabotage” as seen in s.2(a) of the Cabotage Act;
it states;
“Coastal Trade” or “Cabotage” means-
(a) The carriage of goods by vessel, or any other mode of
transport, from one place in Nigeria or above Nigeria waters to any
other place in Nigeria or above Nigeria waters, either directly or
via a place outside Nigeria and includes the carriage of goods in
relation to the exploration, exploitation or transportation of the
mineral or non-living natural resources of Nigeria whether in or
under Nigerian waters;
The reasoning of the learned Judge here was that where drilling
rigs are involved in exploration and exploitation of minerals and
nonliving natural resources in the coastal area of Nigeria, then
such a drilling rig is equal to a vessel and ought to be
registered. The writer does not share this reasoning and view. The
writer considers that a contextual understanding of the provision
would lead to a better and more logical conclusion unlike a word by
word interpretation of the provision. The contextual revelation is
to the end that Cabotage or coastal trade must at all time involve
a locomotive process and not be static.
Does it mean that a drilling rig which isn’t capable of marine
navigation would fall under the definition as given by my Lord in
the Seadrill case? I wit not. The mere
fact that drilling operation are carried out offshore, may not
necessarily equate that it comes under the coastal trade,
especially when considered with the fact that not all drilling rigs
are locomotive in nature. The provisions and interpretation of
coastal trade is quite clear that at every point it must involve
the carriage of goods, without this germane
condition, it goes without saying that a drilling rig with is not
locomotive or capable of any marine navigation cannot infact come
under Cabotage or coastal trade.
On the second issue, the writer believes this has earlier been
addressed in this work hence, not needful to repeat same, however,
the writer considers the fact that the circumstances of each case
differs, in this SeaDrill case, the writer isn’t oblivious that a
major reason for the Court’s holding was due to the fact that one
of the vessels of the Plaintiff is a drill ship which it regarded
as “a vessel with a drilling rig” and which is “capable of
navigating in and within the waters of Nigeria carrying out
drilling operations”. The fact when considered properly is
sufficient to sway anyone including the writer to posit that the
drilling rig was in that case a vessel and capable of Registration
under the Cabotage Act. The mere fact that the rig is capable of
marine navigation solely brings the drilling rig within the
interpretation of a vessel as can be seen from s.2 of the
Cabotage Act.
The court of Appeal has however had the opportunity to pronounce
on this issue, in the unreported appeal of Transoceanic
Support Service Limited v NIMASA & Minister of Transport
unreported CA/L/503/2016, the court inter Alia gave two
conditions as to when a drilling rig would be a vessel;
The first condition is that in order for a drilling rig
to be deemed as a vessel eligible for registration under the
Cabotage Act, it was crucial to show that the rig was designed,
used or capable of being used solely or partly for marine
navigation and used for the carriage on, through or underwater of
persons or property without regard to method or lack of
propulsion.
The second condition is that a drilling rig could be classified
as a vessel under the Cabotage Act, if it is shown that the rig was
listed among the machinery expressly identified as vessels in the
Act. According to the three wise men at the appeal court, either
both or one of these two conditions are necessary to make a
drilling rig a vessel under the Cabotage Act.
The respondent in the Transoceanic case failed
to show how the drilling rig satisfied any of the above conditions,
the court further had very strong words about that the subtle
amendment of the Cabotage Act by the Ministry of transportation via
the inclusion and listing of drilling rig under the
Guideline for the implementation of the Coastal and inland
shipping(Cabotage) Act 2003 and revised in 2007. The Court
held that the minister acted ultra vires and that subsidiary
Legislation cannot be used to amend a principal Legislation.
The writer aligns with the reasoning and decisions of the law
Lords in this appeal and believe same to be correct. The other
Argument of whether the decision of My Lord in the SeaDrill
case is in conflict with that of their Lordships in the
Transoceanic case can be settled via two means;
1) The writer believes that both decisions are not totally in
conflict as have been argued in sundry occasions. A cursory look at
the decision in SeaDrill, especially on issue two, shows that one
of the conditions as opined by the Court of Appeal was infact
followed in reaching its decision.
In seadrill, it was held that the
drilling rig in contention was a vessel under the Cabotage
Act because it satisfied one of the conditions identified
by the Court of Appeal in Transoceanic case, which
is that the rig must be capable of being used for marine navigation
and for the carriage of property and persons. This clearly shows
that the both cases are distinguishable. Whilst
in Transoceanic, the Respondents failed to establish that a
drilling rig satisfied any of the two conditions laid down by the
Court of Appeal for the purpose of classifying the rig as a vessel
under the Cabotage Act. In SeaDrill the defendants’ were able
to do so.
2) The doctrine of Stare Decisis holds that decisions of higher
courts binds all other courts below them. Assuming but not
conceding that the both Decisions are somewhat in conflict,
recourse ought reasonably to be made to the doctrine of Stare
Decisis to settle the said conflict. This recourse will
automatically show that the present law as at today is in fact the
decision of the Court of Appeal as given in Transoceanic
Support Service Limited v NIMASA & Minister of Transport
(Supra).
Conclusively, Save where the two or either one of the conditions
is met, a drilling rig cannot be termed a vessel for the purpose of
Registration and liability of 2% surcharge as stipulated in the
Cabotage Act. Furthermore, the essence of subsidiary Legislations
is so as to give a better and Pragmatic approach to the principal
statute, those entitled and given such power must never seek to use
it to undermine, amend, or expand the principal Legislations as
this would be Ultra vires and would go to a nullity.
JOHN, Ovundah W.; is a 300 level law student,
of the faculty of Law, University of Nigeria, Nsukka. He writes
from Enugu State, Nigeria.