Whether the Filing of a Caveat Against the Release of a Ship Already Under Arrest Constitutes an Arrest and Can Be a Basis for Claiming Damages

CASE TITLE: MT. ORYX TRADER & ANOR v. WRIST SHIPPING SUPPLY (2025) LPELR-80570(SC)

JUDGMENT DATE:  21ST FEBRUARY, 2025

PRACTICE AREA: MARITIME AND SHIPPING LAW

LEAD JUDGMENT: HELEN MORONKEJI OGUNWUMIJU, J.S.C.

SUMMARY OF JUDGMENT:

INTRODUCTION:

This appeal borders on shipping and admiralty.

FACTS:

This is an appeal against the judgment of the Court of Appeal, Lagos.

The 1st Appellant is a shipping vessel owned by the 2nd Appellant. The Respondent is a Norwegian shipping company that provided supplies to the Appellants and had issued invoices thereunder to the 2nd Appellant for the payment of the sum of Sixty Thousand, Four Hundred and Seventeen euros, Twenty-Six cents (€60,417.26), being the sum due and payable to the Respondent for the services and interests accrued thereupon. Upon the Appellants refusal to pay the said sum, and upon discovering that the vessel had already been arrested under various orders of arrest issued by the Federal High Court, the Respondent, in an attempt to protect its interests, entered a caveat against the release of the vessel.

The Respondent also undertook to indemnify the Appellants should it be held that the caveat ought not to have been entered. The Respondent argued that the purpose of the caveat was that it would be given notice of the discharge and/or judicial sale of the vessel in the respective suits so as to enable it to decide on the best step to take to recover the debt sum.

The trial Court discharged the vessel from the seaport suit from the arrest and not the caveat, which had expired. However, Appellants applied to the Court to refer the parties therein to arbitration and to discharge the pending order of arrest issued in that suit. In that case, the trial Court adjourned the proceedings sine die and referred the parties to arbitration, but refused to discharge the vessel from arrest.

The case of the Appellants as applicants at trial was a demand for damages in the sum of USD 3,464,800.00 for the wrongful arrest of the Appellants’ vessel MT ORYX TRADER. The crux of the Appellants’ claim is that the caveat as filed by the Respondent against the release of the Appellants’ vessel is an arrest, which is wrongful as the Respondent is not a party to the suit. It is on this basis that the Appellants claim the sum of USD 3,464,800.00 for damages for the wrongful arrest of the Appellants’ vessel MT ORYX TRADER. The Appellants’ equally claimed that its vessel MT ORYX TRADER had earlier been released by the Court in a pending suit.

​The trial Court held that a natural or artificial person can file a caveat against the release of a vessel, and in this instance, the caveat was valid. The Court of Appeal also found for the Respondent and held that since the 1st Appellant was already under arrest prior to the caveat, the damages claimed had no nexus with the Respondent’s entry of a caveat, and the Court of Appeal refused to penalize the Respondent in damages for the unproved unlawful or wrongful detention.

The Court of Appeal affirmed the findings of the trial Court, hence this appeal.

ISSUE(S) FOR DETERMINATION:

The Court determined the appeal on this sole issues, thus:

“Whether the filing of a caveat by the Respondent against the release of the 1st Appellant vessel did not constitute wrongful arrest to warrant the payment of damages by the Respondent to the Appellants.”

DECISION/HELD:

In conclusion, the Court dismissed the appeal.

RATIOS:

• SHIPPING AND ADMIRALTY- RELEASE OF A SHIP: Position of law as regards filing a caveat against release in respect of a ship under arrest
• SHIPPING AND ADMIRALTY- SHIPPING: Meaning, nature, and types of caveats

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