Maritime Charter Party (Nigeria)

A Maritime Charter Party in Nigeria documents the maritime charter party in a form the parties and authorities can rely on.

The Coastal and Inland Shipping (Cabotage) Act 2003 is one of the most significant statutes affecting charter parties in Nigerian waters. The Cabotage Act restricts coastal trade — defined as the carriage of goods or passengers between two Nigerian ports — to Nigerian-owned, Nigerian-crewed, and Nigerian-built (or Nigerian-flagged with a waiver) vessels. A charter party for vessels operating in Nigerian coastal trade must comply with Cabotage Act requirements, and NIMASA maintains a Cabotage Vessel Financing Fund (CVFF) to support Nigerian shipowners. Violations of the Cabotage Act attract vessel seizure and substantial fines under Section 33 of the Cabotage Act 2003.

For offshore oil and gas support vessels operating in Nigerian waters under petroleum licences granted by the Department of Petroleum Resources (DPR) — now the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) under the Petroleum Industry Act 2021 — the Nigerian Oil and Gas Industry Content Development Act 2010 (NOGICD Act) imposes mandatory Nigerian content requirements. Section 33 of the NOGICD Act requires that vessels used in Nigerian oil and gas operations be Nigerian-flagged where available, with foreign vessels requiring a certificate of no objection from NIMASA before engagement.

The Federal High Court of Nigeria has exclusive jurisdiction over admiralty matters, including disputes arising from charter parties, under Section 251(1)(g) of the Constitution of the Federal Republic of Nigeria 1999 (as amended). The Federal High Court (Admiralty Jurisdiction) Procedure Rules 2011 govern admiralty proceedings. Arbitration under the Arbitration and Mediation Act 2023 at the Lagos Court of Arbitration is a popular alternative for charter party disputes.

The legal framework governing the Maritime Charter Party (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Maritime Charter Party (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies and Allied Matters Act (CAMA) 2020 sets the foundational requirements.

A Maritime Charter Party in Nigeria is required whenever a shipowner and charterer agree on the hire of a vessel or cargo space for maritime operations in Nigerian waters or on Nigerian trade routes.

A Maritime Charter Party (voyage charter) is needed when a trader or commodity exporter — such as a crude oil trader operating under an NUPRC-issued export licence — wants to hire a vessel for a single voyage from a Nigerian port (e.g., Bonny Export Terminal, Brass Terminal) to an overseas destination. The voyage charter party defines the freight rate, laytime, demurrage, and dispatch terms.

A Maritime Charter Party (time charter) is required when an oil and gas operator — holding a Production Sharing Contract (PSC) or Marginal Field licence under the Petroleum Industry Act 2021 — needs to hire a supply vessel, anchor-handling tug, or platform supply vessel (PSV) for a period of months or years to support offshore operations in the Niger Delta or deep-water blocks.

A Maritime Charter Party (bareboat charter) is needed when a Nigerian company under the Cabotage Act 2003 wants to operate a foreign-flagged vessel under the Nigerian flag by demise chartering it for the duration of a NIMASA cabotage waiver. The bareboat charter must be registered with NIMASA and the vessel placed on the Nigerian Ship Register.

A Maritime Charter Party is required when a bulk cargo shipper — such as a cement, fertiliser, or grain importer — engages a vessel owner to carry large quantities of cargo from overseas to Nigerian ports under a standard form charter (e.g., GENCON, NYPE) adapted for Nigerian legal requirements and NIMASA regulations.

Parties in Nigeria should prepare a Maritime Charter Party (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A valid Nigeria Maritime Charter Party must contain the following essential elements.

Parties: Full legal names, CAMA 2020 RC numbers, and addresses of the shipowner and charterer. For Nigerian cabotage operations, confirmation of Nigerian ownership or NIMASA waiver status under the Cabotage Act 2003.

Vessel Description: IMO number, vessel name, flag state, class (e.g., Bureau Veritas, Lloyd's Register), gross tonnage, deadweight tonnage, and NIMASA vessel registration number for Nigerian-flagged vessels.

Charter Type: Specification of whether the charter is a voyage charter, time charter, or bareboat (demise) charter, as each type has different liability and operational implications under the Merchant Shipping Act 2007.

Freight / Hire Rate: The agreed freight rate (for voyage charters, per tonne or lump sum) or time charter hire rate (per day in USD or NGN), payment schedule, and currency. For NGN payments, reference to CBN exchange rate policy under the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act (Cap F34, LFN 2004).

Laytime and Demurrage: For voyage charters, the allowed laytime for loading and discharging at Nigerian ports (e.g., Lagos Port, Onne Port), the demurrage rate per day for excess time used, and any dispatch money for time saved. Nigerian port congestion at NPA-managed terminals makes laytime and demurrage provisions especially important.

Cabotage Compliance: For coastal operations, confirmation of compliance with the Coastal and Inland Shipping (Cabotage) Act 2003, including vessel registration status, crew nationality requirements, and NIMASA approvals.

Insurance: Requirement for the shipowner to maintain P&I (Protection and Indemnity) Club insurance and Hull and Machinery insurance. Cargo insurance obligations are addressed separately in the Marine Insurance Certificate.

Dispute Resolution: Arbitration clause specifying the Lagos Court of Arbitration or London Maritime Arbitrators Association (LMAA) arbitration (for international charters), with the Federal High Court as supervisory court for Nigerian-seated arbitrations under the Arbitration and Mediation Act 2023.

Additional compliance elements for a Maritime Charter Party (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.