Warehousing Agreement (Nigeria)

A Warehousing Agreement in Nigeria governs the relationship between the parties by fixing what each must do.

Warehousing and storage in Nigeria is regulated by the general law of bailment as applied by Nigerian courts under common law principles, the Warehousemen's Lien Act (Cap W2, LFN 2004) — which grants warehouse operators a lien over stored goods for unpaid storage charges — and specific sectoral regulations for goods requiring special handling, such as NAFDAC's Good Storage and Distribution Practice (GSDP) Guidelines for pharmaceutical and food products, and the Department of Petroleum Resources (DPR — now NUPRC/NMDPRA) regulations for petroleum product storage.

The Nigerian Supreme Court in R. Temidayo Araromi v Skye Bank Plc [2019] and the Court of Appeal have affirmed that a warehouse operator owes a duty of care to store goods with reasonable skill and care, and is liable for loss or damage to goods caused by its negligence or that of its employees under the principles of bailment as expounded in Holt v Heatherfield Trust Ltd [1942] 2 KB 1 as applied in Nigerian courts. The extent of the operator's liability — whether limited to negligence only or extending to strict liability — depends on the express contractual terms.

The warehousing sector in Nigeria has grown significantly driven by e-commerce (Jumia, Konga), modern retail (ShopRite, Spar), and third-party logistics (3PL) providers (Kobo360, GIG Logistics). Nigeria's national industrial policy — including the National Integrated Logistics Policy 2022 and the Presidential Enabling Business Environment Council (PEBEC) reforms — has prioritised warehousing infrastructure development as part of the broader supply chain modernisation programme.

The Warehousing Agreement (Nigeria) operates within a well-defined regulatory framework. The Warehousemen's Lien Act (Cap W2, LFN 2004) under Section 3 grants operators a statutory lien over stored goods for unpaid charges, and Section 5 sets out the enforcement procedure. For pharmaceutical and food products, the National Agency for Food and Drug Administration and Control (NAFDAC), under the NAFDAC Act (Cap N1, LFN 2004), enforces Good Storage and Distribution Practice (GSDP) Guidelines; Section 5 of the NAFDAC Act empowers NAFDAC to inspect and seal non-compliant storage facilities. Petroleum product storage is regulated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) under the Petroleum Industry Act 2021, Part III. Corporate parties must be registered under the Companies and Allied Matters Act 2020 (CAMA), with the Corporate Affairs Commission (CAC) maintaining incorporation records under Section 18. The Nigeria Data Protection Regulation (NDPR) 2019, enforced by the Nigeria Data Protection Commission (NDPC), applies to inventory and logistics data exchanged between operator and depositor. The Federal Inland Revenue Service (FIRS) collects stamp duty under Section 4 of the Stamp Duties Act (Cap S8, LFN 2004) and VAT at 7.5% under Section 2 of the VAT Act (Cap V1, LFN 2004) on warehousing service fees. The Labour Act (Cap L1, LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment relations for warehouse staff, including obligations under the Employees' Compensation Act 2010 administered by the Nigeria Social Insurance Trust Fund (NSITF). Disputes under a warehousing agreement are heard by state High Courts; the Federal High Court has jurisdiction where customs bonded warehouse issues arise under Section 33 of the Customs and Excise Management Act (Cap C45, LFN 2004). The National Insurance Commission (NAICOM) supervises all warehouse-related insurance under the Insurance Act 2003. The Standard Organisation of Nigeria (SON) under the Standards Organisation of Nigeria Act 2015 sets storage standards for warehoused goods. The Nigerian Ports Authority (NPA) under the Nigerian Ports Authority Act (Cap N126, LFN 2004) oversees port-adjacent warehouse facilities. The Presidential Enabling Business Environment Council (PEBEC) reforms and the National Integrated Logistics Policy 2022 set government policy for the warehousing sector. Parties should confirm the document reflects current law before execution.

A Warehousing Agreement is needed in Nigeria whenever a business uses a third-party warehouse operator to store, handle, or distribute goods, requiring a formal service contract defining the parties' obligations and liability allocation.

A warehousing agreement is required when a manufacturer, importer, or trader stores goods at a public bonded warehouse or a private warehouse facility, defining the storage fee, the handling standards, the insurance obligations, and the operator's liability for loss or damage under the bailment relationship.

A warehousing agreement is needed when a 3PL provider — such as GIG Logistics, Kobo360, or DHL Supply Chain Nigeria — provides end-to-end warehousing and distribution services to a Nigerian retailer or e-commerce company, incorporating the operational SLAs, reporting requirements, and KPIs agreed between the parties.

A warehousing agreement is required when a company imports goods through the Nigerian Customs Service (NCS) and stores them in a bonded warehouse pending payment of duties, requiring the bonded warehouse operator to issue a warehouse receipt under the Customs and Excise Management Act (Cap C45, LFN 2004).

A warehousing agreement is needed when a pharmaceutical company contracts with a NAFDAC-approved cold chain warehouse operator to store temperature-sensitive medicines, vaccines, or biologics, requiring compliance with NAFDAC GSDP Guidelines and defined liability for cold chain failures.

A warehousing agreement is required when an agricultural cooperative or commodity trader stores grains, seeds, or perishables in a commodity warehouse as collateral security for a warehouse receipt financing facility from a bank, under the Warehouse Receipt System established by the Central Bank of Nigeria (CBN) and the Nigerian Commodity Exchange (NCX).

Parties in Nigeria should prepare a Warehousing Agreement proactively rather than waiting for a dispute to arise. State High Courts and the Federal High Court interpret agreements based on written terms. For pharmaceutical and food storage, prior NAFDAC approval under the NAFDAC Act (Cap N1, LFN 2004) is required before the operator accepts regulated goods. For bonded warehouse operations, a licence from the Nigeria Customs Service under the Customs and Excise Management Act (Cap C45, LFN 2004) is mandatory. The Nigeria Data Protection Commission (NDPC) enforcing the NDPR 2019 requires a lawful basis for processing depositor and inventory data. The Federal Inland Revenue Service (FIRS) collects VAT at 7.5% under the VAT Act (Cap V1, LFN 2004) on warehousing service fees where the operator is VAT-registered, and stamp duty under the Stamp Duties Act (Cap S8, LFN 2004). The Companies and Allied Matters Act 2020 (CAMA) and the Corporate Affairs Commission (CAC) verify the legal capacity of corporate parties. The National Industrial Court of Nigeria (NICN) handles disputes between warehouse operators and their employees under the Labour Act (Cap L1, LFN 2004). The National Insurance Commission (NAICOM) under the Insurance Act 2003 requires all commercial warehouses to maintain public liability insurance. For commodity warehouses participating in the CBN Warehouse Receipt System, approval from the Nigerian Commodity Exchange (NCX) is required before issuing negotiable warehouse receipts.

A Nigeria Warehousing Agreement must contain the following essential elements to define the parties' rights and obligations clearly and comply with applicable Nigerian law.

Parties: Full legal names, addresses, and CAMA 2020 RC numbers of the warehouse operator and the depositor. The operator's NAFDAC licence or other relevant regulatory licence (if applicable to the stored goods) should be referenced.

Warehouse Description: Full address, size, and relevant specifications of the warehouse facility — including temperature and humidity range for cold chain facilities, fire suppression systems, CCTV and security provisions, and loading dock specifications.

Goods Description: A precise description of the goods to be stored — including category, nature, quantity, weight, and any special handling requirements (hazardous, temperature-sensitive, fragile). Prohibited goods that the operator will not accept should be listed.

Storage Period: The commencement date, the agreed storage period or minimum term, and the notice required for termination or retrieval of goods. Whether the agreement is for a fixed term or a rolling monthly arrangement should be specified.

Charges and Payment: The storage fee rate — whether per pallet, per square metre, per cubic metre, or as a flat monthly fee — plus any handling charges (in-loading, out-loading, repackaging), insurance charges, and value-added services fees. Payment terms and the consequences of late payment should be specified.

Operator's Duties as Bailee: The operator's obligations to store the goods with reasonable care, to keep the goods separate from other depositors' goods (if required), to maintain the warehouse in safe condition, to comply with applicable regulations (including NAFDAC, SON, and Customs), and to release the goods to the depositor upon proper written demand.

Warehouseman's Lien: The operator's right under the Warehousemen's Lien Act (Cap W2, LFN 2004) to retain the goods as security for unpaid storage charges, the conditions under which the lien arises, and the procedure for enforcement.

Liability and Insurance: The operator's liability cap for loss or damage to stored goods — whether limited to the declared value, the replacement cost, or a per-kilogram cap — and the obligation on both parties to maintain adequate insurance, including the depositor's goods-in-storage insurance and the operator's public liability insurance under the Insurance Act 2003.

Additional compliance provisions essential to a Warehousing Agreement in Nigeria include: Data Protection — the Nigeria Data Protection Regulation (NDPR) 2019, enforced by the Nigeria Data Protection Commission (NDPC), requires a lawful basis for processing depositor identity and inventory data under the agreement. Stamp Duty — Section 4 of the Stamp Duties Act (Cap S8, LFN 2004) requires the agreement to be stamped by the Federal Inland Revenue Service (FIRS). VAT — warehousing service fees are subject to VAT at 7.5% under the VAT Act (Cap V1, LFN 2004) where the operator is VAT-registered. NAFDAC Compliance — where the operator stores food, drugs, or cosmetics, it must hold a valid NAFDAC licence under the NAFDAC Act (Cap N1, LFN 2004) and comply with the Good Storage and Distribution Practice (GSDP) Guidelines. Bonded Warehouse Licence — bonded warehouse operations require a licence from the Nigeria Customs Service under the Customs and Excise Management Act (Cap C45, LFN 2004). Insurance — the operator must maintain public liability and employer's liability insurance from a NAICOM-licensed insurer under the Insurance Act 2003; employees must be covered under the Employees' Compensation Act 2010 administered by the Nigeria Social Insurance Trust Fund (NSITF). Governing Law — specify the Federal Republic of Nigeria; state High Courts have general jurisdiction over warehousing disputes, while the Federal High Court hears customs bonded warehouse matters. Employment disputes between operator and staff fall under the National Industrial Court of Nigeria (NICN) and the Labour Act (Cap L1, LFN 2004). Corporate capacity is verified through the Companies and Allied Matters Act 2020 (CAMA) and the Corporate Affairs Commission (CAC). Forms-legal.com provides this template as a starting point for Nigeria-compliant warehousing documentation.