rigs be classified as vessels, under the Cabotage Act 2003, supporting the position
of the Nigerian Maritime Administration and Safety Agency (NIMASA).
Honourable Justice Babs Keuwumi of
the Federal High Court, Lagos, in a landmark judgment delivered Friday, June
14, 2019 in a matter instituted by Seadrill Mobile Units Nigeria Limited
against the Honourable Minister for Transportation and two others with suit No:
FHC/L/CS/607/2016, initiated through an Originating Summons, held that drilling
operations fall within the definition of ‘coastal trade’ under the Coastal and
Inland Shipping (Cabotage) Act and that oil rigs fall within the definition of
vessels under the Act.
initiated the suit in reaction to the detention of its oil rig, The West
Capella, by the Nigerian Maritime Administration and Safety Agency NIMASA,
which had been detained upon the Plaintiff’s failure to register it as a vessel
at the Ship Registry for cabotage operations.
vessel from detention had raised two questions for determination as to whether
drilling operations fall within the definition of ‘coastal trade’ and
‘Cabotage’ under section two of the Coastal and Inland Shipping Cabotage
the Cabotage Act; particularly sections two, five and 22(5); drilling rigs fall
within the definition of vessel under the Coastal and Inland Shipping Cabotage
simply limited to oil production and this had no relation to the carriage of
goods and passengers within Nigerian waters, which had been defined as coastal
trade and Cabotage under s two of the Act.
expressly included certain vessels that were eligible for Cabotage registration
under the Act. It was argued that it was immaterial that the word ‘include’ was
used in section 22 (5) and that the express mention of the specific vessels in
the section meant the exclusion of an oil rig, which was not mentioned.
Akinyeye of Olisa Agbakoba Legal, argued that the plaintiff’s drilling
operations, which involved oil production encompassed the exploration and
exploitation of minerals or non-living natural resources in Nigeria and that
the nature and functions of The West Capella compulsorily required it to carry
persons and goods in relation to its oil drilling operations, which fell within
the definition of coastal trade or cabotage under section two of the acts.
West Capella satisfied the three elements required to be fulfilled under
section two of the Act for the purpose of classifying an oil rig as a vessel.
It was also argued that The West Capella was a type of oil rig known as a
drillship and that this fact ought to be taken into joint consideration with
the provisions of the Admiralty Jurisdiction Act, NIMASA Act, and Merchant
Shipping Act, which all contained provisions defining an oil rig as a ship.
affirmative, the Honourable Court found that the plaintiff’s drilling
operations, which were conducted offshore; fell within the ambit of the
definition of coastal trade and Cabotage in section two of the Cabotage Act.
Capella reflected that its drilling operations encompassed the carriage of
goods and persons for the purpose of being classified as coastal trade or
Cabotage under section two of the Act.
the affirmative, the court considered the provisions of the Admiralty
Jurisdiction Act and Interpretation Act and found that an oil rig was defined
as a ship.
The court also held that the word – ‘include’ as utilised in section
22 (5) of the Cabotage Act was to broaden the scope of the Act’s application to
encompass vessels not specifically mentioned in the Act.
Jurisdiction Act, Interpretation Act and Cabotage Act meant that drilling rigs
fell under the definition of vessel under the Act.
settled the age-long controversy regarding whether the oil rigs employed by oil
and gas companies in the maritime industry can be regarded as vessels for the
purpose of the Cabotage Act.
can now charge and demand statutory levies on the oil rigs for Cabotage
activities, which had hitherto been contested by the oil and gas companies.
significant revenue from these levies thereby improving the economic fortunes