The regulatory landscape of Nigeria’s competition and consumer protection regime was greatly improved from 1st January, 2019, when the federal competition and consumer protection act, 2018 (herein referred to as “FCCPA”), became operative. In this article we seek to evaluate the validity of limitation clauses in domestic carriage of goods in Nigeria otherwise known as courier services vis-à-vis the changes FCCPA introduced.
Prior to FCCPA, consumers in Nigeria endured very hurtful customer relationship with domestic carrier of goods (herein referred to as “courier companies”) that began to blossom after NIPOST (Nigerian postal services) started to fail – federal government’s attempt at revamping NIPOST is at its early stage and we hope for results that favour Nigerians.
Without intending to hurt itself, courier companies, that include international brands such as DHL and UPS and fully Nigerian owned companies such as IFEX (an early bird) together with latter brands began to limit liabilities for all losses arising from lost consignments, in all their standard form contracts.
In reaction to courier companies’ unfriendly and unsecured consumer relations, the business of untaxable courier of goods through commercial bus drivers emerged – perhaps, an instinctual business innovation and model.
Why patronize courier companies when security of their services is, more or less, equal to customer’s independent engagement of commercial drivers – who oftentimes do not record losses, discount courier cost even though it is unreceipted.
As Nigerians continued to endure this dehumanizing commercial experience, scholars sought to examine and recommend solutions yet, governments at all level nearly looked on with askance – even as it suffered tax leakages.
In a year 2007 work on unfair terms in consumer contract in Nigeria: the need for stricter statutory control, F.O. Ukwueze, noted that “standard form contracts often contain exclusion, exemption or limiting clauses which are unjust.”
Standard form contracts are pre-prepared agreements that are generally non-negotiable, a matter of take-it or leave-it.
FEDERAL COMPETITION AND CONSUMER PROTECTION REGIME
The objective of the FCCPA include to promote and maintain competitive markets in the Nigeria economy, promote and protect consumers’ interest and welfare by providing consumers with wider variety of quality products at competitive prices as well as to prohibit restrictive or unfair business practices which prevent, restrict or constitute an abuse of a dominant position or market power in Nigeria.
FCCPA applies to business entity or agency of government that provides commercial services, business entities in which governments have controlling interest that perform commercial activities and every commercial activity in Nigeria that aims to satisfy any public demand within Nigeria or to Nigerians or residents from outside Nigeria.
Under FCCPA regime, an undertaking is an entity that offer any commercial activities while a consumer includes a beneficiary of any commercial activities – a receiver of consignment that is to be delivered by a courier company is a consumer.
The federal competition and consumer protection commission is an independent consumer police while the consumer protection tribunal is a special judicial body with powers to hear and determine matters relating to competition and consumer protection in Nigeria. – We note that any objection to consumer protection tribunal’s decision goes to court of appeal and not the high court.
CUSTOMARY LIMITATION CLAUSE
We find clause 6 of DHL Nigeria’s “express terms and conditions of carriage (“terms and conditions”)” a fair example of customary limitation clauses in courier companies’ terms and conditions for domestic courier services in Nigeria.
“DHL’s liability in respect of any one Shipment transported by air (including ancillary road transport or stops en route) is limited by the Montreal Convention or the Warsaw Convention, as applicable, or in absence of such Convention, to the lower of (i) the current market or declared value, or (ii) 22 Special Drawing Rights per kilogram (approximately $US 30.00 per kilogram).”
Where domestic shipment is carried only by road, DHL, claims that in the absence of any mandatory or lower liability limits in the applicable national transport law, “DHL’s liability is or shall be deemed to be limited by the Convention for the International Carriage of Goods by Road (CMR) to the lower of (i) current market value or declared value, or (ii) 8.33 Special Drawing Rights per kilogram (approximately $US 11.00 per kilogram).
According to DHL, any customer who regards these limits as insufficient must make a special declaration of value and request insurance as described in Section 8 or make its own insurance arrangements. “DHL’s liability is strictly limited to direct loss and damage to a Shipment only and to the per kilogram limits in this Section 6. All other types of loss or damage are excluded (including but not limited to lost profits, income, interest, future business), whether such loss or damage is special or indirect, and even if the risk of such loss or damage was brought to DHL’s attention.”
FCCPA REGIME: NEW WINE OR OLD WINE IN NEW WINE SKIN
We note that Nigerian courts tended to enforce those customary clauses that limited liabilities of courier companies before FCCPA. DHL International Nigeria Limited v. Mr. Segun Apata, which was a sharp turn from the generalized judicial attitude in Nigeria suffered a technical knock-out on appeal.
Mr. Apata, an artist, had couriered his art works to his United States based customer through DHL who reported the consignment as lost. When Mr. Apata sued DHL at Oyo State High Court for damages for lost consignment, DHL invoked its customary limitation clause above and the Judge gave judgment to Mr. Apata.
DHL appealed and the court of appeal found that the Judge had denied DHL its rights to fair hearing when it did not hear DHL’s final address. The court of appeal validly ordered a new trial.
Any courier companies’ attempt to limit its liabilities in respect of lost or damaged domestic shipment, in our view, is unlawful and unsupportable in view of its duties and customers’ rights under FCCPA.
Duties of courier companies under the FCCPA are not subject to the will of any parties in a courier service agreement. These duties include the duties not to make a courier agreement subject to any term or condition if:
- its general purpose or effect is to defeat the purposes or policy of the FCCPA;
- it directly or indirectly purports to waive or deprive a consumer of any rights under the FCCPA;
- it is to avoid the courier companies’ obligation or duty under the FCCPA;
- it is to set aside or override the effect or any provision of the FCCPA;
- it is to authorize courier companies to do anything that is unlawful under the FCCPA or to fail to do anything that is required under FCCP; it purports to limit or exempt courier companies from liability for any loss directly or indirectly attributable to its gross negligence or any person acting for or controlled by it;
- it constitutes an assumption of risk or liability by the consumer for the said loss or liability and;
- it imposes an obligation on the consumer to pay for damage,”
FCCPA clearly provides that any courier services arrangement that contravenes any of the provision above is void and, unenforceable. We note that FCCPA prohibits exclusion or limitation of liabilities in respect of courier services.
Customers’ rights under the FCCPA include rights to receive from any courier companies’ timely performance and completion of the services, and timely notice of any unavoidable delay in the performance of the services as well as right to enjoy performance of the services in the manner and quality that reasonable persons are generally entitled to expect.
May we point out that the customary 30 days’ time limit (limitation of action) within which courier companies’ customer are to report lost or damaged shipment cannot be enforced in the face of FCCPA that allows customers up to 3 (three) months within which to make any claims or report a damaged or lost shipment.
Following the principle of latter in time, the FCCPA reasonably overrides and nullifies the IATA Conventions or any other Conventions that are earlier than FCCPA on which DHL and other courier companies founded their right to limit liabilities in respect of damaged or lost shipment in Nigeria.
The FCCPA is not a new wine in an old wine skin. In respect of courier companies’ limitation of liabilities for damaged or lost shipment, the FCCPA is entirely a new wine yet to be savoured by Nigerians or residents. Because its far-reaching benefits are yet to be utilized across all market segments.
Courier companies are liable for lost or damaged domestic shipments. Any attempt to exclude liabilities is unlawful and unenforceable to the extent that it contravenes customers’ established rights under the FCCPA regime.
Given that courier companies now require customers to bear cost of insurance of couriered goods where its value is declared – this practice constitutes an assumption of risk or liability by the consumer for loss or liability in respect of couriered items. A matter prohibited by FCCPA.
In view of high cost of dispute resolution and Nigerians’ level of consumer rights awareness, we recommend that the federal competition and consumer protection commission should issue a regulation or directives in respect of domestic transport of goods, denouncing the current practice and among other things allowing customers to undertake insurance of shipment when shipment exceeds a minimum threshold.
Customers and consumer rights advocates should force courier companies to revise their respective terms and conditions. Consumer rights advocate could as well organize consumer advocacy and awareness clinics on this matter, and subject to availability of funding, offer pro bono services to any affected consumers.