UAE Shipping LawCargo Claims and Other Related Issues

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A. Introduction: The UAE Maritime Code ......................................................................................................................1

B. Cargo Claims in UAE Law .......................................................................................................................................4

C. Priority Claims, Arrest and Judicial Sale ..................................................................................................................16

TABLE OF CONTENTS

A. Introduction: The UAE Maritime Code

WHAT IS THE LAW AND REGULATION GOVERNING SHIPPING PRACTICE IN THE UAE?

The UAE Federal Law No. 26 of 1981 as amended in 1988 (known as the UAE “Maritime Code”)

governs and regulates all shipping practices in the UAE. The law has a number of sections, and deals with many

issues of UAE maritime law, including:

i. Registration of the vessel;

ii. The vessel’s documents;

iii. Ownership of the vessel;

iv. The right to lien on the vessel’s cargo;

v. Mortgage of vessels;

vi. Arrest of vessels;

vii. Identity of the carrier;

viii. The Master of the vessel;

ix. Crew;

x. Chartering of vessels;

xi. Contracts of affreightment and carriage of goods

xii. Carriage of people;

xiii. Towage and pilotage of vessels;

xiv. Collisions involving vessels;

xv. Salvage involving vessels;

xvi. General average;

xvii. Marine insurance; and

xviii. Time bar of marine claims.

The law is applicable to all the emirates of the United Arab Emirates. The law is based on modern

international ‘law and maritime principles set out in International Conventions. It is also very similar to the

maritime laws of the other Arabian Gulf Co-operation Council (“GCC”) States (other than Saudi Arabia).

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In addition to the Maritime Code, there are several relevant Ministerial Decrees or local laws regulating

registration of vessels, crewing, classification of vessels, restrictions with regards to activities undertaken by

foreign flag vessels and other activities in port according to the relevant Port Ordinances applicable in the

individual emirates.

IS THE UAE A MEMBER OF ANY INTERNATIONAL MARITIME TREATIES OR CONVENTIONS?

The UAE has not yet signed all the major International Maritime Conventions, although the UAE has adhered to

the following international Treaties and Conventions: -

i IMO Amendments 93

ii SOLAS Convention 74

iii SOLAS Protocol 78

iv LOAD LINES Convention 66

v TOMMAGE Convention 69

vi COLREG Convention 72

vii STCW Convention 78

viii SAR Convention 79

ix IMMARSAT Convention 76

x IMMARSAT OA 76

xi LC Convention 72

xii INTERVENTION Convention 69

xiii CLC Convention 69

xiv CLC Protocol 76

xv CLC Protocol 92

xvi FUND Convention 71

xvii FUND Protocol 92

xviii LLMC Convention 76

xix SALVAGE Convention 69

Approval of Kuwait Regional Agreement for cooperation and marine environment protection of pollution.

Ratification of the UAE joining Maritime Organisation of Universal Consultants.

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WOULD IT BE POSSIBLE FOR NON UAE NATIONALS TO OWN A UAE FLAGGED VESSEL?

It is not possible to register a vessel in the UAE unless it is 100% owned by a UAE national or a company at least

51% owned by UAE nationals, provided always that the manager of the company is a UAE national. The UAE

does not allow foreign owners of vessels to register their vessels in the UAE. If a UAE vessel is sold to a foreign

entity, the UAE registration must cancelled.

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WOULD THE UAE RECOGNISE THAT THE SHIPPER, THE CARRIER AND THE CONSIGNEE ARE CONTRACTING PARTIES TO THE

BILL OF LADING?

UAE law recognises the fact that the bill of lading is evidence of a contract of carriage and the parties to the same

are the shipper, the carrier and the consignee, all of whom are bound by the terms of the bill of lading.

However, UAE law states that whilst it may be possible to argue contrary to the contents of the bill of lading

between the shipper and the carrier, the carrier may not argue contrary to the terms and conditions of the bill of

lading vis-à-vis the consignee or endorsee who may be an innocent, bonafide third party and was not a party to

the negotiation of the original contract of carriage. The UAE Courts are, for the same reason, reluctant to hold

consignees bound by terms on the reverse of a bill of lading, arguing that the consignee as a third party to the

original contract did not have an opportunity to agree or disagree with the terms of the contract.

WOULD THE UAE COURTS UPHOLD A FOREIGN JURISDICTION CLAUSE OR FOREIGN ARBITRATION CLAUSE ON

THE BILL OF LADING?

The UAE Courts will not uphold a foreign jurisdiction clause nor a foreign arbitration clause, which is contained

on the reverse side of the bill of lading. However, the Court may uphold an arbitration clause if it was signed

by both parties and contained in a separate document (for example, a charterparty), and not just printed on the

reverse side of the bill of lading.

The UAE Courts will always set aside such jurisdiction or arbitration clause contained on the reverse of the bill

of lading as between carrier and consignee/endorsee, and apply the UAE rules of jurisdiction (as set out in UAE

Federal Law No. 11 of 1992 (‘the Civil Procedure Code”) to the dispute. An arbitration clause agreed to and

contained in the charterparty agreement, will, however be upheld provided that the charterparty agreement

incorporating such clause is signed by both parties.

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B. Cargo Claims under UAE Law

IS THERE ANY LIABILITY ON THE CARRIER TO CORRECTLY LOAD, STOW THE CARGO AND PLACE THE VESSEL IN

A SEAWORTHY CONDITION?

ARTICLE 272

1. The carrier must before setting sail and upon the commencement of a voyage use the necessary car to

put the vessel in a seaworthy condition and to fit it out, man it and provision it properly. He must pre

pare the holds and cold rooms and other parts of the vessel to receive, carry and preserve the goods.

2. The carrier must also use the necessary care in loading, stowing, stacking, arranging, carrying,

protecting, discharging and delivering the goods.

According to the Maritime Code, the carrier has a responsibility to place the vessel in a seaworthy

condition suitable for the carriage of the goods and also has the responsibility, unless agreed

otherwise, to stow and store the cargo within the hold of the vessel and to carry the same in good

safe condition from the port of loading to the port of discharge.

WHEN IS A CARRIER LIABLE FOR LOSS OR DAMAGE TO A CONSIGNEE/ENDORSEE?

According to Article 275 of the Maritime Code, the carrier will be liable for loss or damage in the following

circumstances:

ARTICLE 275

1. The carrier shall be responsible for loss or damage sustained by the goods during the period from the

time he takes delivery of the goods at the port of loading to the time he delivers the same to the

person having the right to them at the port of discharge unless it is proved that the said damage or

destruction arose out of one of the following causes:

a. Unseaworthiness of the vessel, but on condition that the carrier proves that he discharged the

obligations set out in Article 272;

b. Errors of navigation or in the management of the vessel on the part of the captain, crew, pilots or

other maritime workers;

c. Fire, unless the same occurred through the act or default of the carrier;

d. Perils of the sea or other navigable waters, or dangers or accidents thereof

e. Act of God;

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f. Perils of war;

g. Acts of public enemies;

h. Any detention or constraint by a power, state or people or judicial arrest;

i. Quarantine restrictions

j. Any strikes or layoffs or any other obstacle such as to prevent continuance of the work in whole or

in part;

k. Civil unrest and commotion;

l. Any act or omission on the part of the shipper or owner of the goods or his agent or representative;

m. Shortfall in bulk or weight or any other shortfall arising out of a latent defect or from the particular

nature of the goods or any defect inherent therein;

n. Insufficiency of packaging;

o. Insufficiency or imperfection of distinguishing marks for the goods;

p. Rescue or attempted rescue of persons or property at sea;

q. Latent defects not discoverable by ordinary examination;

r. Any deviation from course in the course of rescuing or attempting to rescue persons or property at

sea or any other deviation for reasonable cause;

s. Any other cause which does not arise out of the default of the carrier or those working under him or

his representative. The burden of proof shall be upon the person alleging such cause to sho that no

default of such persons was instrumental in causing the loss or damage.

2. It shall be permissible for the shipper in the circumstances set out above to prove that the loss or

damage arose out of the default of the carrier or the default of those working under him in a manner

unconnected with the navigation or management of the vessel.

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WOULD THE UAE COURTS UPHOLD AN ENDORSEMENT OF THE BILL OF LADING WITH THE WORDS ‘SHIPPER’S LOAD,STOW AND COUNT’ OR ‘SAID TO CONTAIN’ WHEN A CLAIM FOR DAMAGES IS BROUGHT AGAINST THE CARRIER?

UAE law generally exempts the carrier from any liability resulting from the fault or omission of the shipper or any

third party (see Article 275 (1) (1) of the Maritime Code). However, the courts in the UAE normally do not uphold

the words “Shipper’s Load, Stow and Count” or “Said to Contain” printed on the front of the bill of lading and

will hold the carrier liable for the damage to the contents of a container or for loss following short landing of the

contents of a container which was delivered sealed to the carrier. This is the case even if the seal was intact on

delivery to the consignee, and is based on the argument that a carrier, in issuing a clean bill of lading,

guarantees the contents of the container is as described in that bill of lading.

However, in cases where damage was caused due to bad stowage and packaging, and the stowage and

packaging can be shown to have been carried out by the shipper, some courts in the UAE may find the carrier

not liable for the damage caused by poor stowage or packaging (see Article 275 (1) (n)).

WOULD THE UAE COURTS RECOGNISE THE DAMAGES CAUSED BY “INHERENT VICE” OR “LATENT DEFECT” IN THE

CARGO?

UAE Courts recognise that a carrier is not liable for any “inherent vice” or “latent defect” in the goods provided

that proper evidence is provided to the court to prove that the damage was caused by a “latent defect” or

“inherent vice” (see Article 275 (q)). Such damage is understood as an exemption to the generally assumed

principle of carrier’s liability as set out in Article 275 (1) of the Maritime Code.

WOULD THE CARRIER BE LIABLE FOR DAMAGES CAUSED TO CARGO BY AN “ACT OF GOD” OR “FORCE MAJEURE”?

The carrier will not be liable for damage to the cargo caused by an “Act of God” or “Force Majeure” pursuant

to Articles 275 (1) (d) and (e) of the Maritime Code, unless the event could have been expected or it could have

been avoided or foreseen. In such circumstances, the carrier will be liable if he could have foreseen the event

and taken precautions to prevent damage, or could have taken steps to avoid the situation as he has a duty of

care to cargo interests in such circumstances. If the carrier wishes to allege that the damage was caused by an

“Act of God” due to heavy weather conditions, the carrier will need to obtain evidence of such, both in relation

to its severity as well as to the expectation as to the place where the vessel sailed at that time (as evidenced by

the submission of the vessel’s log).

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WILL THE UAE COURTS REVIEW WHETHER THE CONSIGNEE HAS ‘TITLE TO SUE”?

The UAE Courts acknowledge the fact that bill of ladings are made out to “the bearer” or “to the order of the

shipper”, or in the name of the consignee. In all instances, apart from the latter, there has to be proper

endorsement on the reverse of the bill of lading which has to be made to show that the claimant in any court

proceedings has “title to sue” or proper endorsement of the bill of lading in his favour.

“Title to sue” may be proven by an endorsement on the bill of lading or by any other document to prove that the

claimant has proper “title to sue” in the proceedings. eg. A letter from a bank saying that the bill of lading was

actually endorsed by the bank (provided of course that the bank is entitled to make such an endorsement).

WHEN WOULD A MARITIME CLAIM FOR DAMAGED CARGO BE TIME BARRED?

A maritime claim pursuant to a contract of carriage will be time barred after one year from the date on which

the goods were delivered or ought to have been delivered. Delivery of the goods is considered to be the time

when the goods pass through the port gates. Time stops running on the date the action is officially filed before

a UAE Court, which date is reflected on the court summons.

However, any recourse action against a third party by a person against whom a claim has been made will be

time barred after the expiry of 90 days from the date the claim was made or from the date on which the claim

was paid. This 90 days period does not apply to an insurer pursuant to the rights of subrogation.

There are also time bar provisions for other shipping activities within the Maritime Code, eg. a one year time-bar

in charterparty claims (Article 224), two years in pilotage and towage claims (Articles 314 and 317), two years

in marine collision claims (Article 326) and two years for marine insurance claims (Article 399).

WHAT IF DETAILS AND INFORMATION REGARDING THE CARGO PROVIDED BY THE SHIPPER ARE NOT CORRECT?

The carrier, when receiving the cargo, must put any “reservation” he may have on the front of the bill of lading

before accepting delivery of the goods at the port of loading. This is called “clausing” the bill of lading and any

“clause” should be supported by a separate written document from the shipper agreeing to the specific wording

of “the clause”. The carrier may also have a recourse action against the shipper for any false information

provided. However, the carrier may not argue vis-à-vis a third party consignee or endorsee that some of the

information provided was incorrect or incomplete if the bill of lading was issued clean and incorporated such

information.

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WHO WOULD BE ENTITLED TO TAKE DELIVERY OF THE GOODS?

A consignee or endorsee who holds an original bill of lading will be entitled to take delivery of the cargo at the

port of discharge. If the cargo is delivered to a party without presentation of the original bill of lading, the

carrier may be liable to the rightful owner of the cargo in contract, and third parties in tort for the value of the

cargo and/or damages.

WHAT IF THE TERMS AND CONDITIONS OF THE CHARTERPARTY AND BILL OF LADING DIFFER?

Where the charterparty and the bill of lading terms and conditions differ, the charterparty will prevail and

determine the relationship between the charterer and the owner. However, with regards to the relationship

between the charterer and the consignee/endorsee, the terms and conditions of the bill of lading will prevail,

unless a specific reference in the bill of lading was made to incorporate the terms of the charterparty.

WHAT IF THERE IS MORE THAN ONE PERSON HOLDING AN ORIGINAL BILL OF LADING AND EACH HAS SUBMITTED A

REQUEST TO TAKE DELIVERY OF THE CARGO?

Usually there is only one original bill of lading in the possession of the consignee/endorsee. However, in the

event that more than one bill of lading has been issued, preference will be given to the consignee who holds an

original bill of lading with a prior date of endorsement.

In the event that the dates of endorsement are the same, the Master may place the cargo in custody of a third

party, or in the custody of the UAE court, until the matter is resolved by the court. This would be a recommend-

ed course of action in circumstances where there are conflicting claimants holding original bills of lading, or if

the Master is notified of a possible fraud.

WHAT IF THE CONSIGNEE FAILS TO COME FORWARD TO TAKE DELIVERY OF THE CARGO WITHIN A REASONABLE PERIOD?

If the consignee fails to take delivery of the cargo despite having being notified by the carrier to take delivery,

the carrier may place the cargo in the custody of a third party, or in the custody of the local court after

obtaining a court order to that effect. The carrier may also apply to the court to obtain an order to sell the cargo

for the payment of any costs or freight payable in connection with the cargo.

The carrier also has the option of placing the consignee/endorsee on notice, and discharging the cargo in the

port authority’s custody until the cargo is auctioned. This is a popular course of action as there is no cost to the

carrier or his local agent. Sale of the cargo will occur six months from the date of arrival of the cargo at the port.

The carrier may, however, be liable for port charges if the value of the port charges exceeds the amount

recovered in the auction of the goods (this is not usually the case).

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WHAT IF DANGEROUS CARGO WAS SHIPPED ON BOARD OF A VESSEL?

If dangerous cargo is shipped on board of a vessel, the carrier may discharge all or part of the dangerous cargo,

or remove the danger at the shipper’s cost, or may request the shipper to compensate the carrier for any dam-

ages that the cargo may have caused had the carrier not been aware of the danger, or if the shipper failed to

declare the dangerous nature of the cargo.

CAN THE CARRIER CARRY THE CARGO ON THE DECK OF A VESSEL?

The carrier may not carry the cargo on deck unless specifically agreed in writing by the shipper, or unless the

voyage was for coastal carriage only.

IS THERE ANY LIMITATION OF LIABILITY ON THE CARRIER’S PART FOR CARGO CLAIMS?

The carrier’s limitation of liability is specified under Article 276 of the UAE Maritime Code which states:

ARTICLE 276

1 The liability of the carrier in all circumstances for loss or damage suffered by the goods shall be

limited to a sum not exceeding ten thousand dirhams for each package or unit taken as a basis in

computing the freight, or a sum not exceeding thirty dirhams per kilogram per gross weight of the

goods, whichever is the higher limit.

2. If packages or units are grouped in cases, boxes or other containers and the Bill of Lading states the

number of packages or units contained in each container, then each one shall be deemed to be a

package or unit in connection with the fixing of the upper limit of liability and if the container is

not owned or provided by the carrier and it is lost or destroyed it shall of itself be deemed to be an

independent package or unit.

3. It shall not be permissible for the carrier to limit his liability against the shipper if the shipper has

provided particulars, before the loading takes place, of the nature and value of the goods and the

particular importance attached to the preservation thereof and such particulars are set out on the Bill

of Lading. The said particulars shall be deemed to be proof of the accuracy of the value set out by the

shipper of the goods and it shall be permissible for the carrier to prove the contrary.

4. Special agreement may be reached between the shipper and the carrier or his representative to

specify an upper limit of liability of the carrier different from the limit set out in this Article but

provided that it may not be less than it.

5. In no cases shall the carrier be responsible for loss or damage sustained by the goods if the shipper

has deliberately stated false particulars on the Bill of Lading relating to the nature or value of the goods.

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In most circumstances, the carrier may limit his liability to the higher of Dhs 10,000 per package or

Dhs 30 per kilogram of gross weight of the goods. Court judgments have upheld the carrier’s right to limitation

of liability under Article 276.

WOULD AN AGREEMENT BETWEEN THE CARRIER AND THE SHIPPER TO EXEMPT THE CARRIER FROM ANY LIABILITY BE VALID

IN COURT?

According to UAE law, any agreement to exempt the carrier from liability or negligence for damage to the cargo

or to reduce any liability for the same will be null and void against the consignee/endorsee as holder of the

original bill of lading.

The carrier, however, may agree with the shipper to increase his liability provided such a condition is specified

in the bill of lading provided to the shipper.

However, there is an exception to the above (Article 280), where the shipment is in connection with coastal

shipment or the special circumstances of the carriage of a particular type of cargo justifies such an exemption.

For such an exemption to be valid, the following conditions must be satisfied:

a. It must not be contrary to a public order or policy.

b. It must not be related to the care which must be exercised by the employees or agents of the

carrier or their diligence in connection with the loading, storing, stocking, carrying, preservation and

care of the goods being carried at sea or in the discharge thereof (see also Article 272 and

Article 275).

c. A bill of lading should not be issued.

d. The agreement should be written on a non-negotiable receipt and particulars thereof should be

endorsed thereon.

SHOULD A CONSIGNEE GIVE NOTICE OF DAMAGE OR SHORT LANDING OF THE CARGO AFTER DELIVERY?

Notice of damage or loss should be given within three days from the date on which the cargo was received. If a joint survey

was carried out, no further notice is required.

Unless notice of the damage to the goods or the short landing of the cargo is given to the carrier after taking delivery of the

cargo, the cargo will be presumed to have been delivered in the same condition as specified on the bill of lading (see Article

281). However, the defendant may prove otherwise by evidence according to the Federal Law No. 10 of 1992, “Evidences in

Civil and Business Transactions Act (“the Evidence Law”).

WOULD THE CARRIER BE LIABLE FOR DELAY IN DELIVERY OF THE CARGO?

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ARTICLE 285

1 The carrier shall be responsible for delay in delivering the goods unless it is proved that the delay arises out of

one of the causes set out in Article 275.

2. The carrier shall be deemed to have made delay in delivering the goods if he does not deliver the goods at the

time agreed, and in the absence of such an agreement if he does not deliver them at the time at which an

ordinary carrier would deliver them in similar circumstances. The carrier will be liable for delay in

discharging the cargo unless he provides evidence that the delay was caused by one of the provisions of Article

275 (referred to the above). The consignee/endorsee will, of course, have to prove his actual loss by producing

evidence.

IF THE CARGO WAS SHIPPED BY MORE THAN ONE CARRIER CONSECUTIVELY, WHO WILL BE LIABLE FOR WHAT?

Should the first carrier have issued a “through” bill of lading, that carrier will be responsible for the cargo

throughout the voyage until the cargo is discharged and delivered in good condition to the

consignee. However, other consecutive carriers may also be liable to the consignee/endorsee in tort for

negligence, (but not in contract under the bill of lading), if their negligence in handling the cargo is shown to

have caused damage to the goods. Such action in tort carries a heavy burden of proof on the party alleging

negligence in UAE Law. The claimant needs to prove: (a) the loss or damage was incurred on that carrier’s leg

of the voyage; and (b) the cause of the loss or damage was directly caused by the negligence of that carrier.

A “through” bill of lading carrier may have a recourse claim in contract if the “through” bill of lading carrier was

found liable for loss or damage on the leg of the voyage under the responsibility of another carrier. It would,

however, be necessary to prove the contractual link between the carriers.

WOULD IT BE POSSIBLE FOR THE CONSIGNEE TO BRING AN ACTION AGAINST OWNERS AND CHARTERERS OF THE VESSEL

JOINTLY IN ONE SET OF PROCEEDINGS?

It is common in the UAE for a consignee to bring an action against both owners and charterers. It is also

possible to bring proceedings against owners, charterers and NVOC issuers of the bill of lading and / or “slot”

charterers. However, it is established in the UAE that the party who will be responsible to the claimant in the

proceedings is normally the party who contracted with the shipper to carry the goods, whether it was the

owners, the charterers or another party who issued the bill of lading.

Normally, the court takes into consideration the identity of the party who has issued the bill of lading and the

identity of the carrier shown in the bottom right segment of the bill of lading. The court may also look at the terms

on the reverse of the bill of lading to identify the carrier, but will not take any “identity of the carrier” clause on

the reverse into account if the same is against the interests of the consignee/endorsee. Therefore, on a number of

occasions, the court may discharge the action filed against the owners or charterers or both, as the case may be,

depending on who actually issued the bill of lading as carrier. Also, the court may find parties jointly and

severally liable in circumstances where it is not possible to tell who is the actual carrier is from the front of the

bill of lading.

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IS IT POSSIBLE FOR THE CONSIGNEE OR THE SHIPPER TO SUE THE SHIPPING AGENT JOINTLY WITH THE CARRIER?

Under UAE law, the shipping agent is not liable for any claim under the bill of lading, as the agent is not a party

to the contract of carriage. The only time a court will find the agent liable is if the agent can be shown

personally at fault, or negligent, which fault or negligence caused the damage to the goods. The agent’s

liability in such case will be negligence in its personal capacity, and not as agent.

IS THERE A SEPARATE ADMIRALTY COURT IN THE UAE TO HEAR MARITIME CASES?

Maritime cases are normally heard before the Civil Courts in the UAE. There are no specialized Admiralty Courts

in the UAE to hear shipping matters, although some of the individual judges do have significant shipping

experience.

Cases are conducted in Arabic and arguments are carried out by exchange of written pleadings and submission

of documents by either party before the case is reserved for judgment. Ex parte applications and objection

hearings do sometimes require verbal argument before the court or in the judge’s chambers.

WOULD THE LOCAL COURT DETAIN THE MASTER OR IMPOUND HIS PASSPORT IF THERE IS A CLAIM AGAINST THE OWNER

OF THE VESSEL?

The UAE court will not usually detain the Master or restrict him from leaving the country, nor will the court

impound his passport. During the vessel’s arrest, the crews’ passports and seamen books will be detained. The

Master will only be detained, or his passport impounded if there has been an allegation as to a crime in

accordance with the UAE Federal Law No. 3 of 1987 (“the Penal Code”) committed on board of the vessel, or

with regards to documents such as commercial fraud, damage caused by a collision involving another vessel or

to another party’s property, or in relation to an incident which results in serious pollution, or in relation to the

death or injury of a crew member on board the vessel.

If allegations are made against the Master of the vessel, the Master will be asked not to leave the UAE until the

criminal case is determined by a final judgment. This is not applicable to civil cases.

WOULD A CLAIM AGAINST THE OWNERS OR THE CHARTERERS OF A VESSEL BE CAPABLE OF BEING SERVED BY THE AGENT

OF THE VESSEL AND WOULD SUCH SERVICE BE CONSIDERED VALID SERVICE?

A claimant may serve a court summons on the owner of a vessel if they have a place of domicile inthe UAE or a place of business via their shipping agent. Service on the shipping agent acting on behalfof the owners or the charterers will he considered valid service for the purpose of UAE proceedings.

If, however, the owner or charterers have no representative in the UAE, service must be effected ontheir address in their country of domicile through diplomatic channels. Service through diplomaticchannels is extremely slow. In cases where the claimant has no knowledge of the address of the defendant or his whereabouts, he may request the court to give special permission to effect service byway of publication in a local newspaper which may or may not be accepted by the judge.

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WOULD THE COURT RELY ON AN EXPERT OPINION IN COURT CASES?

The court often considers expert opinions obtained by each party. Even if the survey or the expertopinion was not carried out jointly or by consent, the court will assess the respective expert opinionsand may rely on such opinions in giving judgment, if the court believes that the opinion is reasonableand justified. Surveyors should be prepared to attend court as witnesses to support their survey reportsif required, although in practice, surveyors are rarely called as witnesses. On many occasions, thecourt also refers cases to independent court experts registered with the court to evaluate the opinionsgiven by the respective parties’ experts or to assess the matter and provide the court with a technicalsummary of the case.

Court experts are only instructed by the court to deal with technical issues and facts and have no rightto give an opinion on the legal issues involved in the case.

HOW WOULD YOU DEFINE A “PREFERENTIAL DEBT” (I.E. PRIORITY CLAIM) ACCORDING TO THE UAE LAW?

According to Article 84 of the UAE Maritime Code, the following debts are considered to be preferential debts.

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ARTICLE 84

The following and only the following debts shall be priority debts:

a. Judicial costs incurred in protecting and selling the vessel, and distributing the proceeds thereof as well as load-

ing, lighthouse and port charges, and other dues and taxes of the same type, pilotage fees, compensation for

damage caused to port installations, dock and navigation lanes, the costs of removing obstacles to navigation

caused by the vessel, and costs of towing and maintenance of the vessel from the time of its arrival at the last

harbour.

b. Debts arising out of a contract for the employment of the master and crew, and other persons bound by a

contract of maritime employment on board the vessel.

c. Monies due for assistance and salvage, and the share of the vessel in general marine average.

d.Compensation due for collisions and other navigational accidents, compensation due for bodily injuries to the

passengers and crew, and compensation for loss or damage to goods and possessions.

e. Debts arising out of contracts made by the master, and operations carried out by him outside the port of

registration of the vessel within the scope of his lawful powers for an actual requirement dict ated by the main-

tenance of the vessel or the continuance of its voyage, whether or not the master is also the owner of the vessel,

or whether the debt is due to him, or to persons undertaking supply, or lenders, persons who have repaired the

vessel, or other contractors.

f Breakdowns and damage giving rise to a right of compensation in favour of the charterers of the vessel.

g. All premiums for insurance effected on the hult, equipment and fittings of the vessel due in respect of the last

insured voyage, in cases where the insurance was effected for that voyage, or for the last period of insurance if

the insurance was effected for a specified period, but provided that in either case the total doesnot exceed the

premiums for one year.

The above debts are set in order of preference and priority. However, there has been much speculation over the

meaning of Article 84 (e), particularly given that a mortgage ranks after the “priority debts” mentioned in Article

84 (a) (b) (c) (d) and (e). The reason for the speculation is the words “debts arising out of contracts made by

the Master”, and whether this incorporates all service requirements ordered by the owners, including agency

services and ship repair, or whether this simply means emergency measures taken by the Master for the

preservation of the vessel.

Preferential debts will, however, come to an end if the following conditions take place.

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ARTICLE 92

Priority rights over the vessel shall expire:

a . Upon the judicial sale of the vessel.

b. Upon the voluntary sale of the vessel if before the payment of the price, the purchaser has taken

the following steps:

i. he has registered the contract of sale on the Register of Ships.

ii. he has placed a notice on the notice board at the Registration Bureau of the vessel containing par

ticulars of the sale, the price, and the name and residence of the purchaser.

iii. he has published a resume of the contract of sale, mentioning the price, arid the name and

residence of the purchaser, which publication must be made twice with an interval of eight days, in a

widely circulating local newspaper.

Priority rights shall be transferred to the proceeds of sale if within thirty days of the last publication in the

newspapers, the priority creditors notify the old owner and the new owner of their objection to the payment of

the price. Nevertheless, the creditors’ priority shall remain in force as against the price unless it has been paid or

distributed.

WHEN WILL A PREFERENTIAL DEBT BE TIME BARRED?

According to Article 93 of the UAE Maritime Code, a preferential debt will be time barred pursuant to the

following conditions:

ARTICLE 93

1. Upon there being an objection, and in the absence of a lawful excuse, no claims shall be heard in respect of

priority rights against the vessel after the expiry of one year save claims relating to priority rights securing debts

for supplies referred to in subparagraph (e) of Article 84, which shall not be permitted after the expiry of six

months.

2. The period referred to in the foregoing subsection shall commence to run as follows -

a. In relation to priority rights securing payment for assistance and salvage, from the day the said oper

ations were terminated.

16 UAE Shipping Law

C. PRIORITY CLAIMS, ARREST AND JUDICIAL SALE.

b. In relation to priority rights securing compensation for collision and other accidents, and

bodily injuries, from the date the damage occurred.

c. In relation to a priority right relating to loss of or damage to goods and chattels, from the day the goods

or chattels were or should have been delivered

d. In relation to repairs, supplies and all other cases referred to in subparagraph (e) of Article 84, from the

date the debt arose.

In all other cases, the period shall commence from the day the debt falls due.

3. The fact of the master, the sailors and other persons bound by a contract of work on the

vessel being permitted to receive sums in advance or on account shall not result in the debts referred

to in subparagraph (b) of Article 84 being regarded as being due for payment before the time specified

therefor.

4. The periods herein set out shall be extended up to three years if it is not possible to

arrest the ship to which the priority right attaches in the territorial waters of the State in

which the claimant has his place of residence or head office. Only such persons may

benefit by this provision who are nationals of the State or who are nationals of a State

the legislation whereof contains a similar provision.

WHAT PRIORITY WOULD A MORTGAGEE HAVE?

ARTICLE 105

1. The mortgagee shall rank directly after the priority debts referred to in sub-paragraphs (a), (b), (c), (d),

and (e) of Article 84. Debts secured by a mortgage shall rank in order of the dates of registration

thereof.

2. If two or more mortgages stand over a vessel or a share in the vessel, they shall rank in order of

registration even if they were registered on the same day.

3. Registration shall result in the interest on the debt being secured for the last two years in addition to

the interest for the current year at the time of the auction, and such interest shall rank in the same order

as the principal sum of the debt.

IN WHAT CIRCUMSTANCES CAN A CLAIMANT ARREST A VESSEL IN THE UAE?

An arrest of a vessel will be granted by the relevant UAE Court in accordance with Article 115 of the UAE

Maritime Code subject to the following conditions:

UAE Shipping Law 17

ARTICLE 115

1. It shall be permissible to effect a preservatory arrest against a vessel by an order of the civil court

having jurisdiction. Such an arrest shall not be made save for the satisfaction of a maritime debt.

2. The expression “maritime debt” shall mean a claim in respect of a right arising out of any of the fo

lowing 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.

1. Supplies of products or equipment necessary for the utilization or maintenance of the vessel, in

whichever place the supply is made.

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 cont

ract 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.

18 UAE Shipping Law

WOULD THE UAE COURTS ARREST A VESSEL IF THE DEBTOR’S ONLY ASSET IS THE VESSEL AND THE DEBT IS NOT A

MARITIME DEBT?

The UAE Courts will not grant an arrest over the vessel if the debt is a not a “maritime debt” even if the vessel

was the only asset owned by the defendant unless the defendant is declared bankrupt or an order for bankrupt-

cy is obtained from the court.

WOULD IT BE POSSIBLE TO ARREST A SISTER VESSEL IN THE UAE?

Article 116 of the Maritime Code acknowledges the fact that a claimant may arrest a sister vessel owned by the

vessel owner who has incurred the debt, provided that the two vessels were owned by the same party at the time

when the debt arose. The claimant, however, is often requested by the UAE Courts to prove that both vessels

are owned by the same entity to obtain an order for arrest. A confirmation from Lloyds Register of Shipping is

generally considered accepted evidence for this purpose. Such an order will not be granted if the vessel is

managed by the same manager or if the registered owners are two different companies (even if they are

“associated” companies).

Further, the court will not grant an arrest on a sister vessel if the debt arose out of a dispute over the ownership

of the vessel or for money due as a result of investing in a vessel, or if the debt arose pursuant to a mortgage on

the vessel (Articles 115 (2) (m) (n) and (o).

If the vessel was under a demise charter, the claimant may arrest the same vessel operated by the charterer or

any other vessel owned by the charterer (Article 117). However, evidence of such link must be filed in court at

the time of the arrest application.

HOW WOULD AN APPLICATION FOR ARREST OF A VESSEL BE MADE IN THE UAE?

An application must be made to the relevant court requesting the arrest of the vessel and showing a “prima facie”

claim, the evidence that the debt is due and that such debt is a “maritime debt” (Article 115 (1)) which has not

been paid together with the following documents: -

a. A notarised and legalised Power of Attorney (“POA”), including subsequent consularisation from the

UAE Embassy where the POA originated, is required if it was signed in a foreign jurisdiction. Such POA

may he granted in favour of one or more local advocates.

b. All the relevant documents proving the debt, together with an Arabic translation of each document by

an authorized legal translator.

c. Evidence of the fact that the vessel is a sister vessel to that upon which the debt arose if an arrest is

requested against a sister vessel.

d. Payment of the appropriate court fees.

e. Guarantee against wrongful arrest, undertaking to pay any port dues and towage charges if they are

not recovered from the arrested vessel (This is only applicable in Dubai).

UAE Shipping Law 19

The arrest application supported by the relevant documents will then be put before the duty judge on the day inquestion, who will grant or refuse an order for the arrest of the vessel. Normally the arrest of the vessel will begranted or refused on the same day and can be enforced the same day the order is granted. Normally, in Dubai,a court bailiff will serve notice of the arrest on the Port Authority or the Marine Police at the Port Authority advis-ing them of the order to arrest the vessel, and detain the vessel. However, this procedure may vary in different emirates. In Fujairah for example, the coastguard is responsible for informing the vessel arrested and for confiscating the ship’s documents as a means of ensuring the vessel cannot leave from Fujairah Anchorage.Although the arrest order is served on the relevant authority on the same day, administrative delays do sometimes occur.

WOULD THE UAE COURTS ORDER THE ARREST OF A VESSEL IF THE VESSEL WAS OUTSIDE THE PORT?

It would be possible to obtain an order to arrest the vessel outside the port if the vessel was anchored outside theport. In some emirates however, a separate application may have to be made to the judge to write to the UAECoastguard in the emirate in question to assist in arresting the vessel. In such a case, the coastguard will assistthe relevant port authority with the arrest order, provided the vessel is within the 12 mile territorial limit of theUAE waters.

WOULD THE PLAINTIFF HAVE TO PUT UP SECURITY FOR OBTAINING AN ORDER FOR ARREST OF A VESSEL?

Since 1992, the UAE Courts do not normally require security from the claimant in the event of wrongful arrest.The court will consider the arrest on the merits based on the documents provided in support of the arrest application, and no security will usually be required to grant an order for arrest.

However, as security remains at the discretion of the judge, there have been some instances where a judge hasrequired some form of security before granting an order for arrest. Security in the form of a bank guarantee orletter of undertaking should only be filed if requested by the judge.

HOW WOULD THE OWNER OF A VESSEL BE ABLE TO OBTAIN THE RELEASE OF THE VESSEL THAT HAS BEEN ARRESTED BY

ORDER OF A UAE COURT?

The owner of a vessel, through his local agent, the vessel’s Master or his local advocate, may apply to the courtimmediately following the arrest objecting to the arrest proceedings. The court will then schedule a hearing on an urgent basis to hear the objection filed by the owner of the vessel. However, it will normally takeweeks (and sometimes several months) before a judgment is given by the court on the objection application filedby the owner against the arrest order. In the meantime, the vessel will be detained under arrest until a judgmentis given by the court on the objection filed or security provided for the release of the vessel. If the objection isdismissed and the arrest is upheld, the owner may appeal against the decision to the appeal court. However, ifthe arrest is lifted following the dismissal of the objection filed, the arrest will usually he lifted on the same dayeven if an appeal is filed by the claimant.

It is advisable on most occasions that the owner of a vessel prepare a bank guarantee or other acceptable security for the court to guarantee the claim in order to secure the immediate release of the vessel (Article 118(3). Even with a bank guarantee filed with the court, the owner of a vessel may object to the arrest proceedings.Filing a bank guarantee is advisable to secure immediate release of the vessel given the delays that can ensurein filing objection proceedings.

20 UAE Shipping Law

WOULD THE PLAINTIFF HAVE TO TAKE ANY FURTHER ACTION TO SECURE THE ARREST ORDER OBTAINED

FROM THE COURT?

It is required by law that within 8 days from the date on which the arrest is served on the vessel or port

authority detaining the vessel, the plaintiff file a “main action” or “substantive” proceedings before the court. If

the claimant fails to file a main action within 8 days, the arrest order will be null and void. In the main action,

the claimant will have to request a judgment for the amount claimed plus an order to uphold the attachment

proceedings as valid.

Court fees will be payable for the main action of 7.5% with a maximum of Dhs.30,000 in Dubai and Ras Al

Khaimah, and 5% with a maximum of Dhs.30,000 - in the Federal Courts that is, Abu Dhabi, Sharjah, Ajman,

Umm Al Quwain and Fujairah.

If no separate application objecting to the arrest proceedings is filed, the arrest (attachment) proceedings file will

be joined to the main action to be considered jointly. If judgment is delivered in favour of the claimant in the

main action, it is most likely that the attachment proceedings will be upheld and the vessel will stand as

security for payment of the amount judged as due in the main action. However, if the main action is dismissed,

the attachment proceedings will also be lifted.

WOULD THE UAE COURTS HAVE JURISDICTION TO GRANT AN ORDER FOR ARREST OF A VESSEL EVEN IF THE UAECOURTS HAVE NO JURISDICTION ON THE MERITS?

According to a decision of the Dubai Court of Cassation, it is possible to obtain an order for attachment even if

the UAE Courts have no jurisdiction on the merits, or if the party has agreed upon foreign arbitration in the

relevant contract. This is provided that, following the attachment, the plaintiff provides evidence that he has

initiated an action in the foreign jurisdiction or has proceeded with the arbitration proceedings according to the

parties’ agreement.

ARTICLE 22 OF THE CIVIL PROCEDURES LAWS PROVIDES:

The Courts shall have jurisdiction to determine the preliminary points and interrogatory application for the main

actions that fall within its jurisdiction, it shall also have the jurisdiction to determine any application that is con-

nected with the case and that good justice makes it a necessity to be considered therewith, further it shall have

jurisdiction to give the order for urgent application or for the preservary orders that of which being executed in

the country even if it did not have jurisdiction in the main action.

ARTICLE 38 OF THE CIVIL PROCEDURES LAWS PROVIDES:

1.In the cases which contained a request for a precautionary for an urgent procedure, the position shall be to the

preliminary court which has jurisdiction in which the defendant’s domicile or the court where the procedure

requested to be implemented.

2.In the urgent dispute relating to the execution of judgment and decree, jurisdiction shall be put to the court

where the execution has been effected.

UAE Shipping Law 21

Arrest Orders obtained for obtaining security pending judgment in foreign proceedings is possible under UAE

Civil Procedure Code, although it remains an uncertain area of law.

According to Article 122 of the UAE Maritime Code, the UAE Courts will have jurisdiction to arrest a vessel in

one of the following conditions:

a. If the claimant has its usual place of residence or head office in the state.

b. If the maritime debt arose in the state.

c. If the maritime debt arose on a voyage during which the arrest was effected on the vessel.

d. If the maritime debt arose out of a collision or assistance over which the court has jurisdiction.

e. If the debt was incurred by a maritime mortgage over the arrested vessel.

The above must be read in conjunction with the rules on international and domestic jurisdiction setout in the Civil Procedure Code 1992. .

WHO HAS TO PAY THE PORT CHARGES AND THE CREW WAGES WHEN A VESSEL IS ARRESTED?

Normally, the court will not make any order or request security for the port charges (with the excep-tion of Dubai) or the crew wages. Such charges will accumulate against the vessel and the owner willbe liable for the same during the time period of the arrest and the main action proceedings.

The port authority and the crew may then, in priority to other creditors under Articles 84 (a) and (b) ofthe Maritime Code, share any proceeds of any subsequent judicial sale from the vessel’s auction to sat-isfy a judgment delivered by the court following arrest proceedings.

WOULD IT BE POSSIBLE TO APPLY FOR THE JUDICIAL SALE OF A VESSEL?

It would not be possible to obtain an order for judicial sale of a vessel unless a final judgment is deliv-ered against the owner in connection with the main action filed and “execution” proceedings are filedby the claimant.

The judicial sale of a vessel is granted through the execution court. Execution court fees are payable.A court expert (usually a surveyor) will be appointed (at the claimant’s cost although recoverable fromthe sale proceeds) to submit a “base value” for the commencement of the judicial sale. At such timethe vessel has to be auctioned and bids from prospective buyers may be received.

Would it be possible to arrest a vessel in a different emirate if the main action is filed in another emirate?

22 UAE Shipping Law

It is possible in accordance with UAE law to arrest a vessel located in the port of one emirate if

another emirate has jurisdiction for the main action (substantive proceedings). For example, it is

possible to file a main action in Dubai if the Dubai Court has jurisdiction on the main action, and obtain an order

to arrest the vessel if the vessel is located in another port in the emirates, such as Sharjah or Abu Dhabi.

However, in such a case the arrest proceedings may take a few days to be enforced, taking into consideration

that a formal letter will have to be exchanged between the courts of the two emirates before enforcing the arrest

order. It is important for the lawyers involved to co-ordinate the correspondence between the courts of the

different emirates.

WOULD IT BE POSSIBLE TO OBTAIN AN ORDER FOR ARREST OF A VESSEL ON PRELIMINARY DOCUMENTS AND WITHOUT

A POWER OF ATTORNEY ESPECIALLY ON URGENT MATTERS?

It would not be possible to obtain an order for the arrest of a vessel in the UAE unless a Power of Attorney is

executed before a notary, and if the Power of Attorney is obtained from abroad, it must be signed before a

foreign notary (or other local equivalent), legalised by the country’s Ministry of Foreign Affairs and consularised

by the UAE Embassy. If there is no UAE Embassy in that country, the notarised and legalised document will need

to be consularised by another GCC country’s embassy, then sent to the GCC country’s embassy in the UAE for

further authentication. The last step is further authentication by the Ministry of Foreign Affairs in the UAE.

Similarly, all documents in support of an arrest application must he translated into Arabic, failing which, no order

for arrest may be granted in the UAE Courts.

Therefore, on occasions where an arrest needs to be obtained urgently, it may not be possible to obtain an order

for arrest before the vessel leaves the UAE Port because the translated documents or more usually, the Power of

Attorney, cannot be arranged on an urgent basis.

Similarly, the UAE Federal system does not allow an arrest to be obtained in the afternoon. An application for

arrest must be submitted to the court during the working hours of the court i.e. between 7.30 a.m and 2.30 p.m.

This is with the exception of the Dubai Court, where an application for arrest or release can he obtained and

enforced in the afternoon between 5.00 pm to 8.00 pm, Saturday to Wednesday. There is also no way of

obtaining an arrest order on a Friday or on public holidays in the UAE.

WOULD THE UAE COURTS ACCEPT AN UNDERTAKING FROM A P & I CLUB TO RELEASE A VESSEL?

The UAE Courts will not accept a letter of undertaking from a P & I Club or from a P & I Club correspondent

unless the claimant in the proceedings agrees to that form of security, in which case the matter of security can

be agreed out of court.

Article 118 (3) sets out the procedure for automatic release of a vessel upon submission of security. The UAE

Courts will only usually release a vessel if a bank guarantee is provided to the court, in acceptable wording from

a bank licensed in UAE to secure the release of the vessel and guarantee the claimant’s claim.

On rare occasions, the court may accept a personal or corporate guarantee if it is evident that the guarantor is

substantially wealthy or has good business standing in the UAE, Such situations however are extremely rare and

open to criticism. In such cases the court may also ask for the consent of the claimant.

UAE Shipping Law 23

WOULD IT BE POSSIBLE FOR THE OWNER TO CLAIM DAMAGES FOR WRONGFUL ARREST OR THE LEGAL COSTS OF AN

UNJUSTIFIED CLAIM?

It is not possible to claim legal costs for an action pursuant to a successful outcome even if the successful party

has spent extensive money on lawyers’ fees. Court fees and arrest fees however are recoverable by a successful

claimant. If an action is dismissed, a defendant may be awarded nominal costs by the court, but may not claim

damages.

Even in the case of wrongful arrest of a vessel, the owner of the vessel may not claim damages for wrongful arrest

unless he is able to prove to the court one or more of the following:

1. There is proof that the plaintiff intentionally intended to cause damage to the owner of the vessel by

arresting the vessel; or

2. The plaintiff violated UAE public order, UAE law or the Islamic Principles of Shariah by obtaining an

order of arrest against the vessel; or

3. The application and the arrest were “malicious” or obtained in “bad faith”, and intended solely to

cause damage to the owner of the vessel; or

4. The claim brought in court is insignificant in comparison with the damage caused to the owner of the

vessel.

The above principles are based on Article 283 (2) of the UAE Civil Code 1987 which states “if the harm is direct,

it must unconditionally be made good, and if it is consequential there must be a wrongful or deliberate element

and the act must have led to the damage”.

In general, the UAE courts usually take the view that seeking protection through the court system by filing an

application to the court for arrest or bringing an action is a general right of the public in the UAE. Therefore,

anyone seeking protection through the court will not be liable for damages if his action was dismissed or the

arrest was lifted in the normal course of action. Therefore, unless a claimant requesting damages proves one of

the conditions above (usually a “malicious” or “wrongful” element), the applicant will not be liable for damages

for seeking the protection and assistance of the UAE judicial system.

It is therefore difficult to obtain an order for damages for wrongful arrest of a vessel. This includes the costs of

port charges and crew wages which the owner or charterer will have to pay even if the arrest was lifted and the

action was dismissed.

IF THE VESSEL OWNER HAS NO PLACE OF BUSINESS OR REPRESENTATIVE IN THE UAE, WOULD IT BE POSSIBLE FOR THE

MASTER OR THE AGENT OF A VESSEL TO SIGN A POWER OF ATTORNEY IN FAVOUR OF A LOCAL ADVOCATE OR FIRM OF

ADVOCATES?

It is possible under UAE law for a local agent to sign a Power of Attorney on behalf of the vessel’s owners to

appoint local advocates provided that he provides a letter of confirmation from the local port authority that such

agent is actually the agent of the vessel. The notary will insist upon the same as evidence that such agent is

indeed agent for the vessel. The Master of the vessel, in the absence of an agent (or instead of an agent), may

also sign a Power of Attorney in favour of a local advocate to represent the interests of the vessel or its owners

in connection with any arrest and main action proceedings.

24 UAE Shipping Law

WOULD IT BE POSSIBLE TO DISCHARGE THE CARGO AFTER THE ARREST OF A VESSEL OR WOULD THE ARREST INCLUDE THE

ATTACHMENT OF THE CARGO ON BOARD?

Unless the arrest order specifically provides otherwise, the arrest order will usually operate to detain the vessel

from leaving the port but does not prevent the owner of the vessel from discharging a cargo or receiving

payment of freight. Such discharge however will require the consent of the local Port Authority, and may be

subject to their interpretation of the arrest order.

WOULD IT BE POSSIBLE FOR THE OWNER OF A VESSEL TO ATTACH THE CARGO OR REFUSE DELIVERY OF THE SAME?

ARTICLE 222

“It shall not be permissible for the disponent owner to detain goods on board the vessel by reason of

non-payment of freight upon arrival but it shall be permissible to apply to the relevant civil court to deposit the

same with a third party until such time as the freight on the vessel is paid and to apply to the court for the sale

of the same or part thereof unless security for payment is put up”.

ARTICLE 223

1 “The disponent owner shall have a lien over goods loaded on board the vessel and such lien shall include the

freight of the vessel and appurtenances. The lien shall remain in force for a period of fifteen days after delivery

of the goods unless a third party acting in good faith has acquired a right in rem against the same.

2. “The lien, shall remain in force even though the goods may have become mixed with others of the same type”.

Owners or charterers may refuse the delivery of the cargo pending payment of the freight payable in connection

with the cargo. This is, however, provided that the cargo was not discharged from the vessel and is owned by

the party liable for freight. If the cargo was discharged, the owners or the charterers may not be able to exercise

their lien over the cargo without a UAE court order enforcing the same.

Owners, may apply for a court order for an attachment against the cargo after discharge from the vessel provid-

ed that the title of the goods has not passed to an innocent third party. If, however, the title to the cargo passes

to an innocent third party, it will not be possible for the owner to obtain attachment against the cargo even if the

freight was not paid.

If the court orders attachment of the cargo on board the vessel (or part of the cargo on board a vessel), the court

is likely to order the arrest of the vessel itself as the only physical means of ensuring the attached cargo remains

in place.

Conclusion

The above is a brief summary of some of the relevant points for cargo claims, arrest and judicial sale under UAE

law. Whilst we believe the information set out above to be correct at the time of writing, this brochure is a sum-

mary of often complex legal issues, and Al Tamimi & Company cannot be held responsible for any party relying

on the same. Further, UAE law changes regularly in its interpretation and can vary between the Dubai and

Federal systems. Any specific questions of law should he referred to Al Tamimi & Company’s offices.

UAE Shipping Law 25

ABOUT AL TAMIMI & COMPANY OFFICES

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