STOAN vs. Shippers’ Council: Appeal Court releases details of ruling

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…Affirms NSC as Port Economic Regulator

The Court of Appeal presided over by Justice Chidi Nwaoma Uwa has finally released the details of the ruling it delivered on the 16th of January, 2018 between the APAPA BULK TERMINAL LTD &13ORS V. Nigeria Shippers Council and Registered Trustees of Shippers Association Lagos State.

It will be recalled that the Court on the said date, in a summary ruling dismissed an appeal brought before it by the terminal operators against the Nigerian Shippers’ Council (NSC) and the Shippers’ Association Lagos State (SALS) describing the questions raised by the Appellants for determination as hypothetical which would not be beneficial to them.

The Nigerian Shippers’ Council (NSC) had on Wednesday 29th October, 2014 published an advertisement announcing the reversal of progressive storage charges at the ports to that, which was in force as at May 1, 2009. NSC also ordered an increase in the free storage period at the port from three days to seven days.

The Council equally directed shipping companies to reduce their shipping line agency charges from N26, 500 to N23, 850 per TEU (20-foot containers) and from N48, 000 to N40, 000 per FEU (40-foot containers), even as it directed shipping agencies to refund container deposits to importers and agents within 10 working days after the return of the empty containers.

However, shortly after publishing the order which was to come into effect on 3rd November, 2014, the terminal operators under the aegis of the Seaport Terminal Operators Association of Nigeria (STOAN) and shipping line agencies under the umbrella of the Association of Shipping Line Agencies (ASLA), secured an interim injunction of the Federal High Court, Ikoyi, Lagos stopping the NSC and/or its agents from implementing the directive.

Ruling on the matter, the presiding judge, Justice Ibrahim Buba dismissed the originating summons filed by ASLA and STOAN describing them as hypothetical and an academic exercise while granting the counter-claims filed by the 1st and 2nd defendants in this case the NSC and the Shippers Association of Lagos State (SALS).

Not satisfied with the ruling, the terminal operators headed for the appeal court to appeal against the ruling.

Delivering judgment on the appeal, Justice Uwa upheld the judgment of the lower court and the counter claim of the second respondent, that is, Shippers’ Association of Lagos State (SALS) and consequently dismisses the appeal. She however ordered that parties were to bear their own cost of the appeal.

However, in a copy of the judgment obtained from the court by the Counsel to the 2nd respondent, Barr. Osuala Emmanuel Nwagbara and made available to Primetime Reporters in Lagos, the Appeal Court ruled that contrary to the argument by the appellants’ Counsel, that there is no statutory provision or agreement appointing the NPA an Economic Regulator of the Ports to curb excess charges rather section 7 (b) of the NPA Act confers on NPA power to maintain, improve and regulate the use of the ports.

It added that the major role of Nigeria Shippers Council is to protect the interest of port users and maritime services providers which would enhance economic growth for Nigeria. Its role is also advisory in nature as a statutory agency for the protection of the interest of Shippers.

It continued,” That in its status as Economic regulator of the Nigerian ports via the letter dated 20/2/2014, its functions include to regulate, monitor and enforce the standard for service delivery, provide guidelines on tariffs and to review/modify charges imposed to alter or disrupt the economic progress of the Ports amongst many other functions.

“That what the Nigerian Shippers Council did is not a “review or modification or increase of charges or introduction of new charges” as alleged but, it is a directive urging the appellants to revert to the approved rates contained in the Minister of Transport’s letter of 15th May, 2009.

“As rightly argued by the learned counsel to the 1st Respondent, it is not subject to the statutory requirement of prior negotiation and agreement with the Appellants within the context of Section 3(f) of the NSC Act and Regulation 1 and 2(1) of the 1997 Regulations. The Notice was not issued under the 1st Respondent’s power under the NSC Act and Regulations but, pursuant to its appointment as Economic Regulator. Therefore, there was no wrong exercise of statutory powers as alleged by the appellants.

“That the appellants in the appeal are challenging the Notice and its purpose. The Notice was not issued by NSC pursuant to its power under the Nigerian Shippers Council (Local Shipping Charges on Imports and Exports) Regulations, 1997 but, the 1st Respondent’s appointment as earlier held in this judgment was as the Port Economic Regulator which is not traceable to the 1997 Regulations.

“That the opening paragraph of the Notice made it clear that the Notice was issued pursuant to the appointment of Nigerian Shipper’s Council as the Economic Regulator for the Nigerian Ports and the Nigerian Shippers’ Council (Local Shipping Charges on Imports and Exports) Regulations 1997. The 1st Respondent therefore acted in dual capacity in that it made and published the Notice pursuant to the executive power conferred on the 1st Respondent by the President of Nigeria via Exhibit NSC -2 as the Economic Regulator of the Nigerian Ports while the Notice was published pursuant to the 1st Respondent’s exclusive power under Regulation 3 of the Nigerian Shippers Council.

“That with regards to the concession agreements which formed the bulk of the appellant’s case, the appellant’s did not show that the agreements are connected to or affected by the Notice. No doubt, the lease agreements determine the scope of the Appellant’s operations but, the 1st Respondent was not a party to the agreements, Exhibits FA2, FA5 –FA5K upon which the Appellants premised the declaratory reliefs and injunctive relief. No right or interest under the agreements can be enforced against the 1st Respondent.

“That the appellants not having established any legal right against the Respondents are not entitled to the perpetual injunction sought to restrain the 1st Respondent from enforcing the directive.

“That there is a deposition that with storage period reduced from 7 days to 3 days, the Nigerian Ports are unattractive in the West African sub-region leading to the diversion of cargo to other West African Ports which led to a yearly loss of about N 2 trillion potential revenue to the Federal Government and Nigerian Economy, that the depositions were not specifically denied, they are deemed admitted by the Appellants.

“The questions raised by the Appellants for determination were hypothetical which would not be beneficial to the Appellants.

“That there is a deposition that the 2nd Respondent had been paying the increased rates unhappily, this deposition was not controverted.

“That the action of the Appellants at the lower court touched on the interest of the 2nd Respondent and the trial court was right to have found in favour of the 2nd Respondent that there is merit in the counter claim.

“The issues as formulated by the court were resolved against the Appellants”.

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