Law News
Court rules on Cabotage deal jurisdiction May 26

FOLLOWING the arguments canvassed by counsel to the parties before Justice Okon Abang of the Federal High, Lagos, the court has fixed May 26, 2015 to deliver ruling in the suit filed by PhoenixTide Offshore Nigeria Limited. PhoenixTide filed the action against Tidewater Marine International Incorporated, its local agent, Tidex Nigeria Limited, Total E & P Nigeria Limited and two others. ‎

The suit is in relation to the operations of PhoenixTidex (created in 2005 by a company owned by former Commerce and Tourism Minister, Mrs Bola Kuforiji-Olubi – Phoenix Ocean Line Limited – and a foreign company, Tidewater Marine International Incorporated, as a wholly Nigeria company to provide support services to international oil companies).

It was created in compliance with then legal regime, which required that vessels on bareboat charter for cabotage trade in the country must be hired by Nigerian citizens. At the resumed hearing on Friday, Dr Babatunde Ajibade (SAN) counsel to the first and second defendants informed the court of his application before the court. He said he had an application for stay of proceedings pending determination of his appeal against the court’ s ruling, assuming jurisdiction. ‎  He‎ argued that the principles guiding stay of proceedings pending appeal are recondite.

“When an appeal is based on the challenge to the jurisdiction of the court, that in itself constitutes a special circumstance justifying a stay of proceedings pending the determination of the appeal”, he stated. Opposing the application, the plaintiff counsel, Ade Adedeji in his counter-affidavit stated that the Preliminary Objection which Justice Abang earlier dismissed was frivolous, noting that the principle would not apply in the circumstance.

He therefore prayed the court to refuse the application.  ‎ The judge after listening to argument of counsel raised three issues and asked parties to address him on them. The first issue was whether the notice of appeal was valid, since only an uncertified photocopy was before him; whether Ajibade can file a further affidavit without the court’s leave; and whether or not the grounds of appeal are of mixed law and facts.

After he addressed them on the issues, ‎Justice Abang then asked parties to file and serve written arguments on the issues he raised within 21 days.   He stated that if the application for stay of proceedings succeeds, further proceedings would be suspended pending appeal. But if the application fails, the court would take any application that is ripe for hearing on the next date.

He subsequently adjourned till May 26, 2015 for ruling.‎ ‎ In the documents filed by parties, PhoenixTide, upon its creation entered into “blanket bareboat charter (BBC), technical services agreement (TSA) and marketing agreement (MA) with Tidewater Marine. By the agreements, Tidewater Marine was engaged to run PhoenixTide, including handling the management and operations of all vessels bareboat hired by the plaintiff, except for some other local issues.

In the course of its operations, PhoenixTidex provided services for some international oil companies (IOCs), which included Total E &P Nigeria Limited, Total Upstream Nigeria Limited, Total E & P Nigeria Deepwater Limited.

In the affidavit filed by PhoenixTide, in support of the suit delineated FHC/L/CS/609/2013, the company claimed that parties had no problem until some years later, when Nigerian investors in the plaintiff began to notice some alleged sharp practices on the part of Tidewater Marine in the operations of PhoenixTide.

Some of the identified sharp practices, it said, included making false tax claims and misrepresenting facts about its revenues with the aim of deceiving Nigerian regulatory agencies.

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