GLENYORK NIGERIA LIMITED & ANOR. v. PANALPINA WORLD TRANSPORT NIG. LIMITED
SUPREME COURT OF NIGERIA
(OGUNWUMIJU; AGIM; TSAMMANI; OGBUINYA; IDRIS, JJ.S.C.)
FACTS
Glenyork Nigeria Limited (1st Appellant), imported a large 12RK Ruston diesel power engine (No. IH1001B) from the United Kingdom via sea to the Port Harcourt Seaport. In March of the same year, it engaged the Respondent, Panalpina World Transport (Nig.) Ltd, under a contract to handle customs clearance of the engine and transport it by road to its project site at the Export Processing Zone (EPZ), Calabar, Cross River State. To facilitate the contract, the 1st Appellant handed over all necessary shipping documents to the Respondent and paid the agreed fees for customs clearance and safe delivery of the engine to Calabar. Contrary to the terms of their agreement, however, the Respondent subcontracted the transportation of the engine to a third-party haulage company. With the Respondent’s knowledge, the engine was negligently handled in transit and arrived in Calabar severely damaged.
Following the incident, the 1st Appellant flew engineers from the engine’s UK manufacturer to inspect and assess the damage jointly with its own engineers, and a formal report of the damage was prepared. The 2nd Appellant, Royal Re-Insurance Co. Ltd. (suing through its attorney), as insurer of the 1st Appellant, paid £95,927.28 as full and final settlement for the damage, along with £3,734.50 for professional and adjustment fees.
The Appellants thereafter filed an action at the High Court of Lagos State against the Respondent, claiming £95,927.28 (or its naira equivalent at the prevailing autonomous exchange rate) as special damages for breach of contract, negligence, and breach of duty of care as a carrier, and an additional ₦5,000,000 as general damages. In its defence, the Respondent denied liability, relying on a police report which claimed the accident occurred because the trailer driver was being chased by suspected thieves. The Respondent also raised a preliminary objection, contending that the subject matter of the suit fell under the exclusive admiralty jurisdiction of the Federal High Court pursuant to the Admiralty Jurisdiction Act.
The trial court dismissed the preliminary objection, holding that the facts disclosed a claim based on a simple contract of bailment and negligence, which fell within its jurisdiction. The court then entered judgment for the Appellants. On appeal, the Court of Appeal overturned the trial court’s decision, holding that the claim was within the exclusive admiralty jurisdiction of the Federal High Court as it arose from the carriage of goods by sea and related activities.
Dissatisfied, the Appellants appealed to the Supreme Court. One of the key issues submitted for determination at the Supreme Court was: whether the Admiralty Jurisdiction Act, 1991, extended the admiralty jurisdiction beyond shipping and maritime disputes to include claims for loss or damage to goods that occurred after the goods had been discharged from the ship, specifically, during their subsequent carriage and delivery by land to the consignee’s premises.
ARGUMENTS
Learned counsel for the Appellants argued that the Court of Appeal erred in holding that, under the Admiralty Jurisdiction Act, 1991, maritime claims for the loss or damage to imported goods do not cease when the goods are discharged from the ship and taken to the customs warehouse but continue through customs clearance and their subsequent carriage and delivery by land to the consignee’s premises. Counsel argued that the admiralty jurisdiction of the Federal High Court is confined to ships and maritime claims arising from the carriage of goods by sea. According to the Appellants, the trial court correctly held that the contract of carriage by sea ended once the goods were unloaded from the ship and delivered into the customs warehouse. The Respondent, they asserted, was not involved in the sea carriage but was instead engaged solely to clear the goods from customs, transport them by road, and deliver them to Calabar.
They further argued that the contract of carriage by land was distinct and independent of the contract of carriage by sea, and that the Admiralty Jurisdiction Act applies only to claims arising from the carriage of goods by sea up until their discharge and delivery to the customs warehouse. Therefore, the Appellants maintained, the claim in this case, which is founded on breach of a contract of bailment and negligence during inland transportation, falls squarely within the jurisdiction of the State High Court and not the Federal High Court.
In response, the learned counsel for the Respondent contended that, by virtue of the 1999 Constitution and the Admiralty Jurisdiction Act, the Federal High Court has exclusive jurisdiction to entertain the Appellants’ claim. Counsel argued that admiralty jurisdiction is not confined to the carriage of goods solely by sea but extends to the entire process of transportation and delivery of goods from the initial loading onto a ship or other conveyance to their final delivery to the consignee or designated recipient.
The Respondent maintained that the trial court erred when it held otherwise and misdirected itself by relying on legal authorities that were not apposite to the facts and circumstances of this case. According to the Respondent, since the Appellants’ claim arose from damage to goods that were part of a continuous maritime and delivery operation, it fell within the exclusive purview of the Federal High Court, and therefore the trial court lacked jurisdiction to hear and determine the matter.
DECISION OF THE COURT
In resolving this issue, the Supreme Court held that:
The admiralty jurisdiction of the Federal High Court does not extend to contracts exclusively for the carriage of goods by land or to road transport disputes, except where it is shown that the land carriage forms an integral part of a single, unified contract for the delivery of goods to the consignee. Where the land leg is incidental to and inseparable from the sea carriage under one overall agreement, claims arising from loss or damage to goods during such land carriage fall within the admiralty jurisdiction. The Court noted that the Admiralty Jurisdiction Act, 1991, indeed broadened the scope of admiralty jurisdiction to cover the entire carriage and delivery of goods from an overseas location to the consignee, including land transport, but only where such carriage is governed by one indivisible contract. In such circumstances, the carrier’s obligation continues beyond discharge at the port until final delivery to the consignee.
However, the Court found that the Court of Appeal erred in holding that admiralty jurisdiction applies even where the sea carriage and land carriage are governed by separate contracts. In the present case, the maritime transaction concluded when the goods were unloaded from the ship and delivered to the customs warehouse at the port. The subsequent transportation by road to Calabar was arranged independently under a distinct agreement between the consignee and a different carrier. Since the inland carriage was not incidental to a single sea carriage contract, the claim for damages arising from it fell outside the scope of the Federal High Court’s admiralty jurisdiction and within the jurisdiction of the State High Court.
Issue resolved in favour of the Appellant.
Mbanefo Ikwegbue, Esq. – for the Appellants
Ayodeji Ademola, Esq. (with him, Austine Ogezi, Esq.) – for the Respondent
This summary is fully reported at (2025) 7 CLRN in association with ALP NG & Co.
See www.clrndirect.com ; www.alp.company.
