The Time Within Which To Commence A Marine Insurance Claim

The Time Within Which To Commence A Marine Insurance Claim.



A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses, that is to say, the losses incidental to marine adventure.[1]Marine insurance refers to that branch of insurance concerned with the insurance of ships as well as their freight and cargo against maritime risks or perils of the sea. Marine insurance therefore enables shipowners and the owners and buyers of goods to operate their respective businesses while relieving themselves of the burdensome financial consequences of their properties being lost or damaged as a result of perils of the sea.

Where a dispute arises between an insurance company and a shipowner or cargo owner in respect of a marine insurance policy, the aggrieved party needs to commence an action in court within the time prescribed by law, otherwise the aggrieved party may lose the right to sue. The case under review examines the dispute as to the time within which to institute a marine insurance claim in Nigeria. It also highlights the implication of the decision for the maritime industry.



In Liverpool and London Steamship Protection and Indemnity Association Limited V. M/T. Tuma & Ors,[1]the Appellant instituted an action against the Respondents at the Federal High Court, Lagos in 2006 claiming the sum of US$517,808.56 as the total outstanding amount and interest owed by the Respondents to the Appellant as insurance premium under various marine insurance policies in respect of the 1stRespondent’s vessel, MT Tuma. The Appellant alleged that the amount represented the total outstanding amount and interest due from the Respondents as a result of unpaid premium calls on the various insurance covers provided for the vessel. The insurance covers were terminated in October 2001.

The Respondents filed Notice of Preliminary Objection seeking to dismiss the Appellant’s suit on the ground that the action was statute-barred as the action was not brought within three (3) years as required by section 18 of the Admiralty Jurisdiction Act, 1991. The Federal High Court in its ruling upheld the preliminary objection and dismissed the Appellant’s action. The Appellant, being dissatisfied with the ruling of the trial court, appealed to the Court of Appeal. The Court of Appeal dismissed the appeal and affirmed the decision of the Federal High Court. The Appellant further appealed to the Supreme Court and the issue presented for determination of the Supreme Court was whether, having regard to the provisions of section 18 of the Admiralty Jurisdiction Act, 1991, the Appellant’s action was incompetent having been filed after the three (3) years period prescribed by law. The marine insurance was terminated in 2001, whilst the action was brought in 2006.

The Appellant argued that the nature of the claim presented before the trial court was a simple contract of insurance. Even though the subject matter of the insurance was a vessel, both the State High Court and the Federal High Court have jurisdiction to determine the suit and the Appellant contended that the Appellant’s claim could have been initiated at the State High Court where the Limitation Laws of Lagos State would have governed the time within which the claim is to be brought. Under the Limitation Laws of Lagos State, a claim for breach of a simple contract must be instituted within a period of six