The commercial maritime law in the United Arab Emirates is
regulated and enforced by Federal Law No. 26 of 1981 (Maritime
Code).
A brief snapshot of some key features of the Maritime Code are
set out below, which have implications for maritime trade and
commerce.
Registration of Vessels
Vessels having UAE nationality are required to be registered
with the Maritime Inspection Department under Article 18. There are
exceptions to this requirement, with fishing boats, pleasure boats,
or boats used in commerce, having tonnage less than 10 tons, not
required to register with the authority.
Operating a vessel which flies the UAE flag but is not
registered under the Maritime Code is punishable with imprisonment
of up to 1 year or fine of up to AED 50,000 or both. The vessel may
also be confiscated under Article 44.
Cargo Contracts & Losses
The Maritime Code regulates the contract of goods over maritime
transport. Article 256 /1 defines a contract of maritime transport
as follows.
A contract of maritime transport is a contract whereby the
carrier undertakes to carry goods from one port to another in
consideration of a freight that the shipper is obliged to
pay.
This contract is proved by a bill of lading which must contain
details of the carrier, shipper and consignee, the goods being
shipped, port of departure and arrival, name and nationality of the
ship, freight charges and method of calculation, place and date of
issuance of the bill, number of copies and signatures of the
captain and shipper.
The carrier is liable for losses or damages incurred to the
goods from the time of receipt of goods till delivery (with
exceptions set out under Article 275). That said, the liability of
carrier is limited to AED 10,000 for each package or AED 30 for
each kilogram of the weight of goods, whichever is higher, unless
the parties have agreed on a higher limit of liability under
Article 276/4 of the Maritime Code.
Collision of Vessels
Default by one of the vessels leading to a collision would
result in the defaulting vessel compensating the non-defaulting
vessel for the damage caused under Article 320 of the Maritime
Code.
However, Article 321/1 clarifies that in case the default is of
more than one party, the liability of each vessel would be
estimated based on the proportion of default of the defaulting
vessels.
Arrest of the Vessel
A vessel could be arrested by an order of the civil court having
jurisdiction solely on the ground of satisfaction of maritime
debt.
A maritime debt has been defined under Article 115 of the
Maritime Code as a claim in respect of a right arising out of any
the following causes:
(a) Damage caused by the vessel by reason of a collision or
otherwise
(b) Loss of life or personal injuries occasioned by the vessel
and arising out of the use thereof.
(c) Assistance and salvage.
(d) Contracts relating to the use or exploitation of the vessel
under a charter party or otherwise
(e) Contracts relating to the carriage of goods under a charter
party, bill of lading, or other documents.
(f) Loss of or damage to goods or chattels being carried on
board the vessel
(g) General average.
(h) Towage or pilotage of the vessel.
(i) Supplies of products or equipment necessary for the
utilization or maintenance of the vessel, in whichever place the
supply ismade.
(j) Construction, repair or fitting out of the vessel, and costs
of it being in dock.
(k) Sums expended by the master, shippers, charterers or agents
on account of the vessel or on account of the owner thereof.
(l) Wages of the master, officers and crew, and other persons
working on board the vessel under a contract of maritime
employment.
(m) A dispute as to the ownership of the vessel
(n) A dispute in connection with the co-ownership of the vessel,
or with the possession or use thereof, or with the right to the
profits arising out of the use thereof.
(o) A maritime mortgage
The order of arrest can be set aside by the civil court if a
guarantee or any other security which is sufficient to satisfy the
debt is presented before the court under Article 118/2 of the
Maritime Code. That said, where the maritime debts relate to the
dispute as to ownership, co-ownership, possession, use or right to
profits arising out of the use of the vessel, the order of arrest
may not be set aside. An arrested vessel is forbidden to sail.
Conclusion
Maritime jurisprudence is constantly evolving as the UAE grows
into one of the biggest locations for maritime operations and
follows international best practices and standards for governing
maritime matters.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
