...as parties seek out of court settlement

A Federal High Court in Lagos has adjourned till March 4, 2023, the suit over the arrest of an oil tanker vessel, MT Ostria alleged to have diverted 12, 681, 960 (Twelve Million, six hundred and eighty one, and nine hundred and sixty) liters of Premium Motor Spirit(PMS), and filled the tank with ocean water. Already the vessel has spent 36 days under arrest and will increase to 46 days on the adjourned date.

Justine Akintayo granted the adjournment sequel to a plea by the lawyers to the defendants that plead for an opportunity to reach an out of court settlement with the plaintiff, NNPC Retail Limited. The defendants are Orion Marine Limited, its bareboat charterer and Taurus Oil and Gas Limited, the owners of the petrol storage called Taurus Storage, Koko, Delta State.

When the matter came up on February 18, the lawyers had a brief conversation together before the court began the activities of the day. When the court started sitting, lawyer to the plaintiff, Mr. Mike Igbokwe SAN informed the court that the defendants did not fulfill their promise to settle out of court, which they made on January 30.

He said: “After the proceedings of January 30, the parties came to my office for a short meeting over how to release the vessel from arrest. We agreed that they will go back to their clients for a proposed agreement. When on Sunday morning I waited and did not receive their proposal, I had to skip church (which I hardly do) to come to the office and prepare our counter affidavit, a reply to their application, which I filed on Monday February 17. I was only able to serve them their copies this morning”.

The lawyer for the first and second defendants, Mr J.J Usman SAN confirmed Mr Igbokwe’s position but pleaded for more time. “There is a little gap in communication which we have just settled before your lordship came in. We cannot move our application because of the counter affidavit that the plaintiff filed. It will be suicidal to do so. I apologize to my senior brother. We are desirous of settling this matter so that we can live in peace and still do business together again”.

Igbokwe replied that it is good to settle conflicts as enunciated in court rules but there must be seriousness. “I need to have the terms of their proposal in writing so that I can discuss them with my clients. Otherwise we will have to proceed with the case.

Justice Aluko thereafter adjourned for the report of settlement or proceeding with the case.

The tanker, her owners and the storage providers were alleged to have been negligent or in breach of contract of carriage or bailment and discharged the missing petrol to another tanker, out of the consignment it was to deliver to a tank farm at Koko Port, Delta State and refilled the tank with sea water on the ship’s course to Koko Federal port.

Justice Aluko gave the order of arrest sequel to an “Admiralty Action in Rem” proceedings filed before him by the plaintiff’s lawyer, Mr Igbokwe, who asked for the arrest of the vessel, and other reliefs over the loss of the PMS.

In a 39 paragraph statement of claim filed before the court, the plaintiff averred that the first defendant (MT Ostria) a Liberian ship had been registered to work in Nigeria since March 25, 2022 by the 2nd defendant (Orion Marine Ltd) while the 3rd defendant (Taurus Oil and Gas Ltd) operates a tank farm at Koko Port, Delta State. It was Orion Marine that bareboat-chartered MT Ostria from its owners in Liberia, Silverwind Navigation Inc. for five years. The bareboat charter agreement is expected to expire on April 12, 2026.

MT Ostria was chartered by NNPC Shipping and Logistics for three months to carry petroleum products belonging to the plaintiff from Lagos offshore, that is from a mother vessel named The Northern Light, to the 3rd defendant’s Taurus Storage facility at Koko, Delta State. Due to this prior contract, the plaintiff and the 3rd defendant executed a Throughput Agreement dated March 18, 2022, and extended by an addendum dated July 1,2023 “for the purpose of handling, throughput, and holding certain plaintiff’s petroleum products at the Taurus Storage Terminal at Koko”.

On January 15, 2024, NNPC Trading Ltd entered into a contract with the plaintiff to sell 20,347,750 litres of Petrol to the plaintiff on credit. Upon NNPC Shipping and Logistics chartering MT Ostria,MT Ostria’s Master issued a bill of lading to the plaintiff undertaking to carry its petrol as specified, from the mother vessel to Taurus Storage Facility Koko.

The claim stated: “By the shipped bill of lading number NSL/LAG23/000018 dated at Atlas Cove, 15 January 2024, signed by the 1st defendant’s Master or Agent on behalf of the 2nd defendant, both acknowledged their receipt and shipment of about 21 million litres of the plaintiff’s PMS in apparent good order and condition, clean on board of MT Ostria for carriage as common carrier from Port of Lagos Offshore ex-MT Northern Light(the mother vessel) to, and delivery at the Taurus Storage facility at Koko Federal Port unto the account of the plaintiff or to its assigns or order”.

On January 14, at about 4.22 pm, the first defendant started the ship to ship loading of the PMS from the mother vessel, MT Northern Light. It completed loading on January 15, 2024. As required by law, the Nigerian Navy must give permission for any Ship to Ship loading to take place in Nigerian territorial waters. This particular loading was approved by the Nigerian Navy. All pre-loading operational procedures such as sampling, quality analysis, Ullaging or calculation were carried out by appointed chemist, and surveyor, General Marine and Services Ltd. The inspection and analysis results certified the cargo as meeting the required standards and all parties signed the cargo documents before the vessel was given the green light to sail to Koko Federal Port.

By the time the vessel arrived at the Taurus Storage facility at Koko Federal Port on January 17, 2024, at 16:48 hours, it was discovered that the first defendant and her crew had discharged a part of the consignment of PMS into another vessel and replaced it with sea water. The plaintiff presented the Bill of lading to the 1st and 2nd defendant at the Taurus Storage Facility but soon after discharge operations started, the defendants suspended the discharge on January 19 2024 due to the discovery of a huge ship to shore variance.

Investigations revealed how the 1st defendant and its crew managed to transfer part of the consignment into another vessel while an illegal and unapproved transshipment was carried out after the approved one.

The statement of claim averred: “Immediately after the Ship to Ship(STS) transfer from the MT Northern Light to the 1st defendant, at about 11.52 hours on 15 January 2024 and whilst the pumps and other equipment it used to make the STS from the MT Northern Light were still connected to the 1st defendant, the 1st defendant made another STS transfer (not permitted by the Nigerian Navy) of the plaintiff’s PMS from its tanks into another motor tanker(falsely and purporting to be a passenger vessel) known as Orion Atlantic but whose MSSI number is 657645000 and Synthetic Aperture Radar(SAR) report showed was called Garroch, a tanker”.

Investigations according to the statement of claim also revealed other startling things in the course of the first defendant’s sailing to Koko.

It stated further: “After the second STS, the 1st defendant stayed within Apapa Anchorage,went to hotspots where illegal shipping activities take place on 16 January en route Koko making an area of interest visit whereas viewed coordinates showed that after the second STS, the Orion Atlantic anchored closer to storage facility. Immediately after the second STS, the 1st defendant reported a reduction from 7.0 Meyers to 6.0 Meyers draught;

Available data shows that the Orion Atlantic (also related to the 2nd defendant), had committed a lot of infractions including identity theft and false name changes within Nigerian territorial waters in the past and was used to wrongly remove a part of the plaintiff PMS from the 1st defendant during the voyage from Offshore Lagos Anchorage to Taurus Storage facility, Koko”.

After getting a hint that the MT Ostria may leave Nigeria and outside the jurisdiction of the court, Igbokwe filed an Admiralty in Rem action seeking a court warrant for her arrest pending when an adequate bank guarantee has been provided to cover the plaintiff’s claims.

Justice Aluko, granted the following orders:

That AN ORDER for a warrant of arrest in respect of and to arrest and detain the 1st Defendant now at Tin Can Island Five Star Logistics Terminal, or wheresoever she may be located within the limits of the territorial waters of Nigeria, subject to or until such a time as the Defendants shall provide a sufficient, unconditional and acceptable bank guarantee issued by Access Bank Plc or Zenith Bank Plc to secure and satisfy the reliefs sought against them in this suit by the Plaintiff/Applicant is hereby granted.

AN ORDER directing the Harbour Master, Nigerian Ports Authority, Lagos, to collect and deliver to the Admiralty Marshal to, or retain, all the 1st Defendant’s trading and other certificates for safekeeping until the 1st and 2nd Defendants have complied with the conditions attached to the order of arrest and detention made by this Honourable Court herein is hereby granted.

AN ORDER directing or allowing the Chief of Naval Staff to either retain the Nigerian Naval personnel already onboard the 1st Defendant that is under detention or to put 4 (four) of their men onboard the 1st Defendant for the purpose of securing the 1st Defendant and take other steps including the provision of regular patrols and surveillance around her location in order to prevent the 1st Defendant from escaping from judicial arrest and detention in her location until the 1st and 2nd Defendants have complied with the conditions attached to the order of this Honourable Court in respect of her arrest and detention is hereby granted.

That the Plaintiff/Applicant shall file an undertaking as to damages to indemnify the Defendants/Respondents in the event that this Order ought not to have been made.

The judge thereafter adjourned the suit till January 30, 2025 for the report of the arrest execution.

On the adjourned date, though the parties were absent, they were all represented by their lawyers. The President of the Nigerian Bar Association (NBA), Mazi Afam Osigwe SAN and Mr J.J Usman represented the second defendants while the third defendant was not represented.

Igbokwe informed the Court that the matter was adjourned for a report on the execution of the warrant of arrest/order dated January 16, 2025. He further explained that the 1st Defendant was arrested by the Admiralty Marshal of this Honourable Court on January 17, 2025, and that the 2nd and 3rd Defendants had been duly served with the necessary originating processes filed in this case.

Additionally, Igbokwe drew the Court’s attention to the fact that the Learned Counsel for the 1st and 2nd Defendants had before the Court sat today, approached him regarding the possibility of engaging in settlement discussions, a proposition which was confirmed by Mr. JJ. Usman SAN. (During the discussions, Mr. Osigwe SAN asked Mr. Igbokwe,SAN to allow the 1st and 2nd Defendants to provide an undertaking instead of a bank guarantee for its release because they had been bleeding. Mr. Igbokwe,SAN told him that the bank guarantee was the order made by the Court for the release but whatever proposed terms they put to him would require the Plaintiff’s consideration and instructions. So, they agreed to discuss after the court’s proceedings).

Osigwe sought the permission of the Court for Mr. Usman to conduct the case of the 1st and 2nd Defendants. Usman then informed the Court that on January 17, 2025, the 1st and 2nd Defendants were served with the Warrant of Arrest and the Court’s Order of arrest of the 1st Defendant. The Learned Silk further stated that a Motion on Notice to set aside the arrest order, along with a memorandum of conditional appearance, had been filed by the 1st and 2nd Defendants on January 25. However, on January 28, the 1st and 2nd Defendants had filed another Motion similar to the one filed on January 25.

Usman’s request to withdraw the 25 January application met no objection and the court granted the request. He also said that there were two Memorandum of conditional appearances one filed by Bloomfield and the other filed by Osigwe,SAN and applied to withdraw the former, which not being opposed was granted.

Usman confirmed the pre-sitting discussions had with Igbokwe,and then indicated an intention to move the Motion on Notice to set aside the Court’s Order. At this point, Mr. Mike Igbokwe SAN interjected, noting that the application was not yet ripe for hearing, as per Order 10 Rule 1 of the Admiralty Jurisdiction Procedure Rules 2023 (AJPR), and that the application had not yet been regularized, given that the 1st prayer on the Motion paper was for an extension of time to apply to set aside the order/warrant of arrest of the 1st Defendant, which must first be moved and be granted before the 2nd prayer for setting aside the arrest can be ripe for hearing and that your company intended to file a counter-affidavit to oppose the application.

Considering these circumstances, the matter was adjourned to February 18 2025 for a report on settlement or the hearing of application to set aside the arrest order.

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