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Oil rig is a vessel under Cabotage Act, court rules

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Federal High Court, Lagos has in a landmark judgment held that drilling operations fall within the definition of ‘coastal trade’

A Federal High Court, Lagos has in a landmark judgment 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.
  
Trial judge, Babs Keuwumi gave the verdict June 14, 2019 in a suit filed by Seadrill Mobile Units Nigeria Limited against the Honourable Minister for Transportation & 2 Ors in suit No:FHC/L/CS/607/2016.
  
The Plaintiff had 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.
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Pursuant to the suit, the Plaintiff in seeking the release of its vessel from detention asked the court to determine whether drilling operations fall within the definition of ‘coastal trade’ and ‘cabotage’ under section 2 of the Coastal and Inland Shipping (Cabotage) Act.
  
It also prayed the court to say whether on a proper interpretation of the Cabotage Act – particularly sections 2, 5 and 22(5) – drilling rigs fall within the definition of vessel under the Coastal and Inland Shipping (Cabotage) Act.
  
Counsel for the Plaintiff argued that drilling operations were 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 2 of the Act.
  
The Plaintiff further argued that s 22 (5) 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 s 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.
   
In opposition, the 1st and 3rd Defendants’ counsel, Dr. Oluwole 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 2 of the Act.
  
Dr. Akinyeye further argued that the nature and functions of The West Capella satisfied the three elements required to be fulfilled under s 2 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.
 
But the court considered the provisions of the Admiralty Jurisdiction Act and Interpretation Act and found that an oil rig was defined as a ship and so hold.

 


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