The Impact of the Covid-19 Pandemic on Demurrage Provisions in Charter-Parties in Nigeria

Introduction

In the wake of the coronavirus pandemic (“COVID-19” or “the pandemic”), both governmental and private agencies as well as regulators of various sectors - from manufacturing to professional services – have responded by amending or creating specific statutory provisions to tackle the ripple effects of the pandemic on the economy. In particular, the impact of the virus on shipping and trade is now becoming increasingly clear. As a result of this ongoing disruption, the rights and obligations of individuals and businesses under contracts are coming under increased scrutiny.

In addition to grounding local and international flights, commercial hubs in Nigeria such as Lagos, Kano, and Ogun States as well as the Federal Capital Territory, Abuja were also locked-down to curb the spread of this scourge. This has given rise to a number of questions regarding the implications of the pandemic on various aspects of the Nigerian economy including the shipping or maritime sector. A recurring question is whether a force majeure clause can excuse parties in charter-party agreements from performing their obligations or from doing so on time. Against the backdrop of Lagos State as the center of shipping activities in Nigeria, this article seeks to examine the effect of the pandemic on the Nigerian maritime space especially as it relates to charter-party agreements and the demurrage provisions therein.