How ADR Will Engage Importers And Exporters In Nigeria

By Valentino-Buoro

A fortnight ago, we discussed the place of alternative dispute resolution in the enforcement of regulatory powers. In today’s piece, our focus is on the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) which was established by an Act of the National Assembly in 2007. The Act set out to professionalise a strategic group of maritime practitioners hitherto known as clearing agents. It is of historical importance to note that the Governing Council of this agency was birthed by the Nigerian Shippers Council which had the mandate of the Federal Government to conduct the council’s maiden election in the year 2012

Up until the enactment of the Act, reference to clearing agents evoked different emotions and perspectives in the minds of the international trading community in the country. While some port users will see them as ubiquitous and independent minded, others will swear that the arduous nature of their jobs tended to make many short tempered and clamorous when processing import and export documentations.

For those who are familiar with the dynamics of dealing with officials positioned to give clearance to cargo coming in or exiting Nigerian sea and airports, the freight forwarder at work must be seen as some kind of advocate or broker regularly at pains to protect the business and financial interests of their principals from some unscrupulous officials determine to exploit their offices for corrupt personal gains.

Many a freight forwarder has also suffered physical and emotional abuse when they are caught in the web of clearing prohibited cargo imported into the country. Since they are the face of their principals, they get arrested, manhandled and put in custody for imports a number of them know nothing about. This is not to discountenance the fact that a handful may truly be accomplices to such illegal transactions.

What this piece is all about is to state that with the professionalization of the cargo clearing business and the introduction of the new nomenclature of freight forwarder for its practitioners, a new transactional order has also now been put in place which importers and exporters must abide with in order to be able to instruct freight forwarders to render services.

FREIGHT FORWARDERS STANDARD TRADING CONDITIONS

The Freight Forwarders Standard Trading Conditions (FFSTC) is a 74 Clause standard contract that is now binding between all Nigerian registered freight forwarders and their clients. If you do business at the ports as an importer or exporter and are not yet familiar with the uniform Standard Trading Conditions (STC) under which freight forwarders are now expected to carry on business, you may be courting some commercial trouble and consequential dispute. Under a new Regulation which the CRFFN unveiled at its recent empowerment seminar for practitioners, the freight forwarder will not be liable for a number of possible transactional challenges which the importer or exporter is deemed to have indemnified the freight forwarder against.

The Standard Trading Conditions (STC) protects the rights of the freight forwarder and streamlines what he or his company will account for in the case of any damages or loss to the cargo of the importer or exporter. It details the nature of services the freight forwarder is empowered to provide and the legal assurances importers and exporters must provide the forwarder in the course of carrying out their biddings. There are strict instructions on how the freight forwarder must also provide for the protection of his client. These include that the Forwarder shall hold a general insurance policy covering liability for damage, loss, theft or burglary of the goods under its control. The insurance policy shall cover the misappropriation by the freight forwarder or its employee of any money advanced by the customer for the clearing or forwarding of the goods. The drafters of the regulation which is henceforth mandatory upon all contracts of clearing and forwarding were not unaware that disputes are bound to arise on the interpretation or practical implications of carrying on business under its terms. To this end a robust alternative dispute resolution process has been provided in the regulation for the use of both the practitioners and their clients.

The STC dispute resolution clause provides that in the event of any dispute in connection with the agreement, the parties shall meet in good faith, within one month of the knowledge of the dispute, for negotiations in an effort to resolve the dispute amicably. If the dispute is not settled by negotiation within 14 days, the dispute, difference or claim shall be referred to a Multi-Door Courthouse mutually agreed by the parties, for mediation. If mediation fails to resolve the dispute or differences within 14 days, the matter shall be settled by Arbitration in accordance with the Arbitration and Conciliation Act, Laws of the Federation of Nigeria (LFN) 1990.

The import of the STC dispute resolution clause is the entrenchment of the ADR culture in Nigeria’s maritime industry. More and more businesses will be expected in the coming months to update their knowledge of amicable dispute resolution of business challenges and to promote a seamless flow of international trade across our borders.